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Europe this week
As a matter of fact
Women account for 60% of university graduates but only few women make it to the boardrooms of companies. In January 2012, women made up just one in seven board members at Europe's top firms (13.7%). This is a slight improvement from 11.8% in 2010. Moreover, only 3,2% of chairpersons are female compared to 3.4% in 2010. These are the main findings of the progress report "Women in economic decision-making in the EU" that the Commission published this week. The figures show slow progress for women's advancement. Instead, the "glass ceiling" still prevents too many qualified women from getting to the top floors of Europe's companies.
More women mean better business performance and economic gains. For example, a report by the consulting firm McKinsey found that gender-balanced companies have a 56% higher operating profit compared to companies that are only managed by men. The firm Ernst & Young analysed the 290 largest publicly-listed companies. They found that the earnings of companies with at least one woman on the board were significantly higher than those companies that do not have any female board member at all.
Opening the door to senior positions acts as an incentive for women to enter and stay in the workforce, helping to raise female employment rates and making better use of women's potential as human resources. It will also help achieve the target set by the Europe 2020 Strategy – the European Union's growth strategy, which aims at having 75% of 20 to 64 year olds in employment by 2020.
The European Union has the power to make laws on matters of gender equality in employment and self-employment (Art. 157 TFEU). The Commission is reviewing options to make use of this power in order to increase the number of women in senior economic decision-making positions across the EU.
With this aim in mind, the Commission has launched a consultation to seek the views of the public on which actions to take at EU level.
According to a Eurobarometer survey published this week, 88% of EU citizens say that – given equal competences – women should be equally represented in the top jobs of businesses.
76% of Europeans believe women have the necessary skills to make a career. 75% of those asked are in favour of legislation on gender balance on company boards. The relative majority of respondents (49%) think that monetary fines would be the most appropriate mechanism to enforce such legislation.
There are big differences between the 27 EU Member States in terms of female representation on the boards of publicly listed companies: In Finland and Latvia, women make up more than one quarter of the company boards (27% and 26%, respectively), but in Malta and Cyprus only 3 and 4, respectively, out of 100 board members are female. (See annex for share of women on the boards in the companies of EU's Member States.)
To increase the number of women on the top floors of companies, a number of Member States have adopted legislative measures in 2011 that establish quotas or targets for gender representation on company boards at national level:
France, Italy and Belgium have enacted binding quota legislation for company boards that includes sanctions. These countries followed the example of Norway, which has seen rapid progress and comprehensive compliance with a 40% quota passed in 2003.
The Netherlands and Spain have also adopted legislation, but the rules are not binding. In the Netherlands, big companies are to strive for a 30% representation of each sex among board members. The Spanish legislation adopted in 2007 encourages large companies to alter the membership of their boards gradually until each sex makes up at least 40% of board membership by 2015.
In Austria, Belgium, Denmark, Finland, France, Germany, Luxembourg, the Netherlands, Poland, Spain, Sweden and the UK no legislation is in place. Instead, corporate governance codes encourage a balanced representation of women and men on company boards.
The report "Women in economic decision-making in the EU" and the launch of the public consultation come one year after Commission Vice-President Viviane Reding, the EU’s Justice Commissioner, had challenged publicly-listed companies in Europe. Vice-President Reding had invited companies to voluntarily increase the number of women in their boardrooms by signing the 'Women on the Board Pledge for Europe'. By signing this pledge, companies were asked to commit themselves to raise the representation of women on their boards to 30% by 2015 and 40% by 2020. However, during the past 12 months, only 24 companies across Europe committed to this form of self-regulation.
The public consultation will run until 28 May 2012. Member States, business and industry organisations, individual companies, citizens, civil society organisations, trade unions, equality bodies and any other organisations are invited to participate in the consultation. The results of the consultation will feed into the Commission's decision on what steps to take further in order to increase the number of women in economic decision-making.
Homepage of Vice-President Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship: http://ec.europa.eu/reding
Progress report: Women in economic decision-making in the EU: http://ec.europa.eu/justice/gender-equality/files/women-on-boards_en.pdf
Public consultation: Gender imbalance in corporate boards in the EU http://ec.europa.eu/justice/newsroom/gender-equality/opinion/120528_en.htm
Eurobarometer on Women in Decision-Making positions http://ec.europa.eu/public_opinion/archives/ebs/ebs_376_en.pdf (direct link to English version)
Share of women on the boards of the largest publicly listed companies, 2010-2012
Source: European Commission database on women and men in decision-making: http://ec.europa.eu/justice/gender-equality/gender-decision-making/database/index_en.htm