Gender quotas: Bad for business or a ‘necessary evil’?

As Europe marks International Women's Day, politicians remain divided over a European Commission proposal to impose a 40% quota for women sitting on company boards.

The European Parliament yesterday (7 March) organised a debate on ‘Women’s Responses to the Crisis’.

The event bore significance as European politicians remain divided over a proposal concerning quotas for women on non-executive company boards.

The legislation, proposed in November 2012 by Justice Commissioner Viviane Reding, would apply to publicly traded companies in the 27 member states with more than 250 employees or annual revenues exceeding €50 million. The companies would have until 2020 to comply of face sanctions.

Gender quotas have long divided European opinion. Some politicians and MEPs believe that quotas remain a "necessary evil" to accelerate progress towards a better gender balance on the corporate boards of European companies.

“I used to be against quotas, but we need to reflect reality. And reality is that not merely enough women are in high positions across Europe today. Maybe you could say that it’s a necessary evil,” said Elisabeth Morin-Chartier, chair of the Parliament's Committee on Women’s Rights and gender Equality.

France is seen as a model with national legislation introduced in 2010, which increased the share of women on publicly listed boards. The estimated percentage of females jumped from 12.3% in 2010 to 22.3% in 2012, according to the European Commission.

Women: A national issue?

Not all countries are enthusiastic about gender legislation.

German Foreign Minister Guido Westerwelle noted said on Wednesday that Berlin would oppose any EU proposal to introduce mandatory quotas for women on boards of private companies.

“Germany will not only not accept such a directive, but we will work actively against it,” said Westerwelle.

Lithuanian President Dalia Grybauskait? believes gender quotas could be useful but "only as a last resort" option.

"Most importantly is to ensure equal opportunities," she told EURACTIV in an interview. "Of course, it depends on the specific situation of every country. Sometimes positive discrimination is necessary due to the traditional and cultural background of a specific society."

These national differences have led several European countries to believe that any decision on quotas should be made at the national, not EU, level.

But Morin-Chartier, a French centre-right MEP, believes there is value in taking action at European level.

“It’s a false argument to say that these issues need to be tackled at a national level, as they fully concern all Europeans and are based on the fundamental principles of justice and equal rights. That can’t be up for debate,” she told EURACTIV in an interview.

“It should also be remembered that the EU is based around being a model for one another. Some countries might be against it because they already implement it nationally, but not everyone is like this. We need to serve as an image for others”.

Naming and shaming

Opponents however, argue against the very principle of quotas, saying they won't help women's cause.

Marina Yannakoudakis, a British Conservative MEP, referred to it as a "trophy style" system, which doesn’t benefit women. “It’s a fact that we need more women, but we can’t just catapult them into non-executive positions,” she told EURACTIV.

“Quotas are bad for business and it’s important to take the voluntary approach. That’s why we need to encourage more women while giving them a choice,” she said. “In the UK we have seen a rise in women throughout boardroom between 2011 and 20012, based on techniques like naming and shaming, as well as the voluntary approach which encourages big companies to make the right choices”.

Speaking at the inter-parliamentary event yesterday, British Baroness Detta O’Cathain also expressed concern about women quotas implemented at a EU levels.

O’Cathain noted that women would be better represented in the work sector through other methods than quotas, like "naming and shaming", referring to initiatives taken by British companies that motivate companies to increase their number of female board members.

“Today one forth of FTSE companies in the UK have hit their 25% targets. Only seven remain that are all male dominated and they are being names and shamed,” said O’Cathain, who has served on the boards of several corporations.

‘Leaving out half of the population’

Beyond the gender representation on company boards, there is also a difference between how much men and women doing comparable jobs are paid.

According to the latest figures released by the European Commission, the gender pay gap in the EU lies at 16.2%, accounting for the precise difference between salaries calculated on the basis of gender.

Data provided by the Confederation of Family Organisations in the EU (COFACE) also shows that while women reduce their working hours after the first child, men tend to work longer hours once they have children. Post-birth salaries for women decrease by 12%, while the gender gap continues widening significantly after each child, according COFACE.

“Its high time! It’s a question of justice and equal treatment. You can’t leave out half of the population.” said MEP Evelyn Regner, an Austrian S&D member of the EP.

“It will be challenging, but having a board with at least 30% women is needed in order to change the whole way of working and the way we look at things. We should remain flexible . . . but these figures gives us something to aim for, which is good.”