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SPEECH/11/604

Viviane Reding

Vice-President of the European Commission, EU Justice Commissioner

Investing in tomorrow’s boardrooms

Meeting of European Business Schools and Executive Women on Boards

Brussels, 26 September 2011

Ladies and Gentlemen,

It is good to be here today. I want to thank our hosts for welcoming us here. And I want to recognise and pay tribute to Candace Johnson for her leadership, continued dedication and commitment in promoting the role of women in business. Thank you Candace for your example; for showing us that there is no top, for showing us that there are always new heights to reach when you are a leader combining vision with action. Thank you also for giving back and investing so much in making the women on boards’ initiative happen.

Last Thursday I was in Berlin at a meeting on women in leadership held by the media group Bertelsmann where the Vice-Chair of the supervisory board of Bertelsmann – Mrs Liz Mohn – was introducing the Bertelsmann's initiative for a Business Women school to offer women training for management positions. This is an example of how companies are starting to understand that success in business does not happen by accident. It requires hard work, great precision and planning. Like building a house you have to get the right plan: to dig out the land and remove the big rocks of prejudice and the debris of old-style management practices. Then you lay firm foundations using the right mixing tools to ensure that all elements of your firm or corporation are put to the best use. Or else the concrete would have no shape and no purpose and the house would risk crumbling down.

This is why initiatives such as the one by Bertelsmann are needed to make a meaningful impact and get more women in business leadership. We need to start from the 'bottom'; we need to ensure that women get the best training from the start so they too can climb up the ladder, reach for opportunities and grow within the company.

One side of the coin is self-regulation: pleading companies to increase their efforts to get more women in economic decision-making positions. The other side of the coin is training and education which are key factors for having a pool of highly qualified women ready to take on the challenge of a top position in the company.

Business schools play a central role in the whole process of helping to increase the number of female leaders. Business schools are shaping the minds of the future leading generation. It is here that young women and men get the training for their future business career – they acquire the tools but also the inspiration for their future jobs.

It is therefore important to provide young women with role models, proving that a woman's career can be at least as successful as those of men.

Reaching the top of any profession requires a combination of hard work, determination and talent. But first of all, we have to make sure that female talent takes this route!

In my previous mandate, I took action to correct the lack of women in ICT careers. Together with major companies, I launched the "shadowing days" that help young women to choose a career in a key sector for Europe's competitiveness.

Greater participation of young women in all key economic sectors should be all the more natural as young women have all they need to do it: they record a higher level of educational attainment than men and around 60% of university graduates in Europe are women. This impressive figure is however not reflected in the working environment: the female employment rate is at around 62%, compared to around 75% of men. Women still represent only 12% of board members in Europe's biggest listed companies. And they represent only 3% of board presidents. Women seem to disappear when climbing up the corporate ladder. They may be pushed out by the group-thinking complex of homogeneous male-only boards. Some could say that they are pushed out by the male quota.

But in times of economic crises, of demographic decline and skills shortages, women represent an untapped potential that we need to draw on. We need more women at the top in the corporate sector to increase Europe's competitiveness and companies' profits. I am sure that our colleagues from McKinsey can give us some figures later on which illustrate how female skills are directly linked to a company's economic performance. The simple truth is that there is a business case, not just an equality case, for putting more women on corporate boards.

The European Commission has been very active in advancing gender equality. Last year in March, the Commission committed to a Women's Charter to strengthen gender equality throughout all our policies. It was a year ago to the week that we presented a Strategy for Equality between Women and Men – a five-year programme to implement the principles of the Women’s Charter, in which increasing the number of women in decision-making positions in the economy is one of the top priorities. And in March this year I brought together CEOs and Board Chairs of big publicly listed companies to discuss possible ways forward for increasing the representation of women in corporate boards.

The goal is clear: I want to give self-regulation a last chance and encourage companies to develop credible self-regulatory initiatives to make significant progress. I have called on European publicly listed companies to sign the "Women on the Board Pledge for Europe", a voluntary commitment to increase women's presence on corporate boards to 30% by 2015 and to 40% by 2020.

In March next year, I will look at the figures and ask: Has there been significant progress? Can we see any credible commitments? If sufficient progress has not been made with self-regulation in the corporate sector, the European Commission will explore policy options and will be ready to take targeted measures to correct the imbalance between men and women, thus enhancing female participation in economic decision-making. Some, mostly men, say self-regulation and soft measures will suffice. I would say that if you want anything said, you should ask a man; but if you want something done, you have to ask a woman. For me, what counts is the end result. We know what it will take for women to make it to the top and I am not interested in the possibility of defeat.

But self-regulation alone is not the solution. We need to create a pool of talented women, a pool of the next generation of female leaders. That is why I am glad to see all of you here together to discuss how to encourage more young women to follow a career in business.

Business schools hold the key to obtaining more women in the corporate boardrooms of Europe. You have an important 'eco-system’ that brings together many constituencies:

  • Alumni whom you have educated, know well, and to whom you continue to be a reference throughout their careers as part of the Biz School Network,

  • Senior Women Faculties who are well respected in their fields and by corporations,

  • Corporations that support business schools are often donors of chairs, sponsor programmes, institutes, etc. Very often the CEO’s of these corporations sit on the Board of the Business School. They can avail themselves of the senior executive women talent in the wider eco-system of the school.

Moreover, business schools have the necessary resources and framework to identify, train, qualify, label and recommend senior executive women for Boardroom directorships.

And I want to say that a number of good initiatives are already up and running – I mentioned the Bertelsmann example earlier on.

Other initiatives have been launched either by the Business Schools in Europe or their Alumni. To name just a few:

  • The St. Gallen’s “Female Board Pool” which holds regular gatherings on corporate governance and maintains a data bank of qualified senior women board candidates and publishes annual rating of Swiss Companies that achieve gender equality in their boardrooms and those who have not;

  • Alumni at both London Business School (Women in Business) and HEC (Hautes Études Commerciales au féminin) have created professional organisations to ensure better opportunities for their constituencies;

  • The international leading business school IMD has set up an entire programme to prepare senior executive women for Board membership and has paired up with the European Professional Women’s Network (EPWN) to set up the first European Professional Women’s Network/IMD boardroom roundtable;

  • EDHEC, represented here today, has set up a new Ethics Board addressing this very issue,

  • Even the Financial Times, which publishes the highly-regarded annual business school rankings, has now set up its own Non-Executive Director’s club with online curriculum to ensure diversity in the Board-Room.

I welcome these initiatives and I am confident that they will strengthen the link between education and a career in business. I hope that today's meeting will provide an opportunity to explore further initiatives for unlocking the gridlock of getting more senior executive women on corporate boards throughout Europe.

Initiatives which help to pro-actively identify, prepare, qualify, and label senior executive women in your eco-systems as “board ready” and then linking these female executives to the corporations in their spheres of influence – be it on their own boards, donors of chairs, or corporate partnerships.

Business school ranking and accreditation bodies should start including these factors in their rankings.

Corporations working or partnering with European Business Schools should include in all programmes that they sponsor or endow a requirement of 'return on investment' – which means specifying what type of executive women candidates they need, so that European Business Schools can match this demand. And we certainly need more professional corporate governance organisations promoting equal chances for men and women to include and partner with the European Business Schools in their initiatives.

These are some ideas to kick-start the debate and I am sure you have many more. I am looking forward to hearing all of them.

Conclusion

Ladies and Gentlemen;

High-level commitment and effective action from governments, political parties, social partners and businesses are crucial to tackle the under-representation of women in decision-making positions and on the boards of listed companies.

I am especially glad to see European business schools involved in this process. We need to plant, nurture and grow young leaders from the very beginning to find them again at the very top – and your work is central to ensure that they do get to the top!

Businesses throughout Europe will have to work closely with you. They have to understand that they will harvest what you are planting. And they should know that European Business Schools are encouraging innovation and planting the seeds that will grow into tomorrow’s leaders.

It reassures me that the business education sector is so strongly committed to helping talented women to reach top positions in companies. I am encouraged by your example and strongly support your efforts.

I am convinced that by working together we will break down the barriers that stand in the way of success and make gender equality a reality for those young women and men going to your business schools.

Thank you very much for your attention.

For more information

See IP/11/1073

Women on the Board Pledge for Europe:

http://ec.europa.eu/commission_2010-2014/reding/womenpledge/index_en.htm

Gender Equality:

http://ec.europa.eu/justice/gender-equality/index_en.htm


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