During a debate to improve the number of women in top positions, EU ministers gave the green light to Commission vice-president Viviane Reding “to do something” to boost gender balance, which is "good for business."
“Everyone agreed that there is a problem in women’s participation at the top level of companies. There was unanimity that we need to do something,” said Viviane Reding in a statement after the meeting of European ministers for employment and social affairs on Friday (17 February).
The discussion took place just a few weeks before the European Commission is due to take stock of the progress – or non progress -- made towards the targets that Reding set last year, after she made an appeal to companies for ‘credibile’ initiatives aiming to reach parity and promised legal action should this not be forthcoming.
The Commission vice-presidnet asked CEOs to sign the "Women on the Board Pledge for Europe". Under the pledge, women's presence on corporate boards would rise to 30% in 2015 and 40% in 2020.
Although they are half of the population and 60% of university graduates, women are still severely under-represented at every level of decision-making across sectors.
Only one in ten board members of Europe's top listed companies are women, according to figures published by the European Commission. The representation of women among CEOs of the biggest companies is even lower, at 3%. This is despite recent studies show that a higher presence of women in top jobs has a positive impact on economic growth.
“This is a serious democratic deficit and social loss,” said Cécile Gréboval, secretary-general of the European Women’s Lobby.
The number of women in European corporate boardrooms is currently increasing by only half a percentage point per year. Brussels estimates that at this slow rate it will take another 50 years before European corporate boardrooms contain at least 40% of each gender.
“Women in top management really mean business. There is no longer anyone challenging the facts. I have seen an evolution of the debate,” Reding said.
A McKinsey study found that gender-balanced companies have a 56% higher operating profit compared to male-only companies.
Another research by Ernst and Young looked at the 290 largest publicly listed companies. They found that the earnings at companies with at least one woman on the board were significantly higher than in those that had no female board member.
The commissioner pointed out that one year ago when she launched the debate many companies were still saying that they could not find women for top jobs and that increasing women’s participation was not an issue. This debate is not obsolete and there is awareness that women mean business and this is big progress, Reding underscored.
A few member states have followed the example of Norway and introduced binding legislation, such as Spain, but others have adopted non-binding targets or encouraged self-regulation, which some say is not enough.
To reach the goal of a more balanced EU job market, Commissioner Reding could use a new instrument introduced by the Lisbon Treaty, which provides for "incentive measures" to be applied in the field of anti-discrimination (Article 19 of the Treaty on the Functioning of the EU).
One of these incentive measures could be a directive, which requires national transposition or a regulation which would be immediately applicable across all 27 EU member states.
Since the introduction of quotas on company boards in Norway, the number of women has reached 40% as required by law.
But if quotas are imposed, these should not come without sanctions. “The successful implementation of the quota was mainly due to sanctions, the toughest of which was the forced dissolution of non-compliant companies,” said Gunn Karin Gjul, member of the Norwegian Parliament in charge of the family and cultural committee, during a conference earlier this month.