Gender-Balanced Company Boards in the EU

RENFORCE Seminar Series
Gender-Balanced Company Boards in the EU


The role of private actors vis-à-vis public authorities in ensuring
gender equality in corporate management


9 December 2015, Utrecht University, Dep. of Law
Achter Sint Pieter 200
Raadzaal

From the very foundation of the European Union, the principle of equality and of equal treatment of men and women is one of the legal cornerstones of its underlying system of core values, yet the unequal representation of women in decision-making is still a huge problem throughout the EU these days. While women make up for at least half of the population, their share in the exercise of political and economic power has remained at a very low level even in the 21st century.

Scope of the issue

For nearly 30 years, a more equal participation and representation of men and women in decision-making bodies, including company boards, has been on the agenda of the European Union. In various recommendations the Council has called upon the Member States to take the necessary action to make progress on this. Clearly, these measures have not been effective enough, as the EU average for women in top management positions of large listed company boards is still at the very low figure of 17.8 %, while there are significant cross-country differences, the lowest figure concerning Malta (2.1%) and the highest being that in Finland (29.8%), other countries ranging in-between such as Greece (8.4%), Belgium (16.7%) and Germany (21.5%). Non-EU country Norway shows the highest figure; 42%. At CEO level, the figures are even far lower; less than three out of hundred of the largest listed companies in Europe is a woman. In past years the average annual increase of women on company boards was found to be merely at a 0.6% rate.

Convergence of minds
From a special Eurobarometer poll conducted in 2011, there appears to be a quite large societal consensus in Europe that this is problematic and that women, given equal competence, should be equally represented in company leadership positions. In a European community of states that is seriously committed to the principle of equal treatment and equal opportunities of men and women, as expressed now in a number of articles of the TEU, TFEU and the Charter of Fundamental Rights, this very slow progress is problematic indeed and an important driver for action. But more gender-balanced company boards is not simply a matter of individual fairness and social justice, as it can also bring important benefits to the companies themselves.

Divergence of approaches
Yet, there are quite diverging views as to the methods and instruments to be applied for achieving a (more) balanced representation of women and men. According to the mentioned Eurobarometer poll, only 8% of the European citizens deem that no action is needed because balance is not needed, while 15% does not know what action should be taken. 31% has a preference for self-regulation, 26% for binding legal measures and 20% for voluntary measures such as non-binding Corporate Governance Codes and Charters. Such variation is in fact also visible in the national legal and regulatory systems of the Union’s Member States, reflecting non-alignment or disagreement as to the ways in which this problem should be dealt with (if at all) and by whom. Action thus ranges from different forms of self – and co-regulation to soft public policies and hard legal quota regimes. So far eleven countries have stayed away from taking any legal action. Clearly, the introduction in Norway in 2006 of a hard law quota regime for bringing about gender balance in the boardroom has triggered the debate in quite a number of EU Member States and led to important legislative changes in some of them, including Belgium, France, Italy and Germany. On the EU-level as well, the European Commission has been shifting its soft law approach to a hard law approach, by putting forward a proposal for a directive on this topic in 2012, leading to a – still ongoing – vibrant and heated discussion. The Commissioner responsible for gender equality, Vera Jourova, has announced to make adoption of the Directive a priority for 2015.

Focus of the seminar
Against this background and recent studies that have been carried out by researchers from Utrecht University and by the Centre for Inclusive Leadership (see www.womeninmanagement.eu), a seminar is being organized that seeks to bring together views from industry, policymakers and academia as to the pros and cons of different regulatory and enforcement approaches as well as best practices to effectively deal with the lack of progress. Among the issues to be discussed are:

  • what is the scope and nature of the problem of underrepresentation of women on company boards in Europe and why does it need to be addressed;
  • what role has been assigned to or taken up by companies and what are the reasons or incentives underlying this role and in particular why has there been a preference for private regulation or enforcement over public law arrangements in a number of Member States;
  • regarding the different public law approaches, what is the impact thereof on company’s daily operations and how to ensure that appropriate actions will be taken, preventing ‘lip service’;
  • regarding self- or co-regulatory approaches, how can these be best framed with a view to ensuring:
      • sufficient trust and credibility with stakeholders;
      • ‘internalization’ of the set rules and therewith support and compliance;
      • flexibility and evaluation so as to ensure also longterm benefits?
  • can one single out certain factors for determining the optimal mix of
    regulation and enforcement arrangements for realizing the goal of a more balanced gender representation on company boards;
  • does target setting (in any way) for representation of women at supervisory board level address the root cause of the issue, that is the underrepresentation of women in executive positions within companies;
  • what role plays the interaction between the European and national dimension in relation to the aforementioned issues and how to assess the Commission’s proposal?

In what way does the argumentation of the legislative approaches play a role in having companies accept and implement fundamental changes to their operating procedures? The arguments used by governments and EU vary from the human and women’s rights perspective, to more business oriented arguments like the business case, full use of all talents available and increased economic growth potential. Especially the business case and economic arguments are proving to be the most successful arguments to convince business leaders.

RENFORCE Seminar Series
This seminar is also part of the RENFORCE Seminar Series on the role of private actors in regulation and enforcement in Europe. Each seminar in this series is focused on a specific sector or theme and involves speakers and discussants from the sector or industry and possibly other involved organisations, academia and national and European policymakers. Seminars so far have addressed media regulation, specifically the protection of minors on the Internet, and wildlife trade.
The findings from the various seminars will be published on the RENFORCE website (www.renforce.rebo.uu.nl) and included in the academic publication marking the conclusion of the project.

 
Share: