On June 12 2012, Caroline Wunnerlich, Managing Director of Fleishman-Hillard in Brussels, was invited to bring her European expertise to a panel discussion on improving the gender balance on corporate boards in the UK and across Europe. The discussion was hosted by the British organisation ‘The 30% Club’, a group of Chairmen voluntarily committed to bringing more women onto UK corporate boards, in conjunction with one of the world’s leading international fashion houses, Louis Vuitton.
The discussion was particularly timely considering the recent European Commission consultation on increasing women’s participation on corporate boards. The outcome of the consultation will impact the Commission’s decision on whether it will take mandatory legislative measures to increase female participation, including binding quotas. The consultation, which ended on 28 May 2012, received over 400 replies from corporations, the public and private sector, business associations and women’s associations, demonstrating just how important this issue is to a range of people and organisations.
This consultation followed the launch of the ‘Women on the Board Pledge for Europe’ by European Commissioner for Justice, Viviane Reding, in March 2011. The initiative calls for publically listed companies in Europe to sign a voluntary agreement to raise female representation on their boards to 30% by 2015 and 40% by 2020. Despite the promise of self-regulation only 24 companies have signed the pledge, a disappointing statistic. To add insult to injury, between 2010 and 2012, the percentage of female board members in the largest companies listed in the EU only increased by a fraction, from 11.8% to 13.7%. It would appear that despite encouragement, company chairmen have not assumed full responsibility for the issue by taking proactive steps to generate a change long overdue. At the time of the launch of the ‘Women on the Board Pledge for Europe’, Viviane Reding alerted the European business world to count on her ‘regulatory creativity’, if significant progress had not been made to enhance women’s participation in decision-making.
The debate on increasing female participation has revealed a wide diversion of views. While a majority of stakeholders agree that increased female participation is desirable, there is a disagreement on whether binding quotas are appropriate or necessary to achieve this goal. During the summer of 2011, the European Parliament adopted a resolution supporting binding quotas if voluntary measures proved to be ineffective. The use of mandatory gender quotas is of course a heated debate and many corporations participating in the discussions, as well as a number of MEPs, have warned against such measures. However, the Commission, whilst analysing the responses to the discussed consultation, is also assessing the success of gender quotas that are already in place in Norway and across a range of Member States including France, Spain, the Netherlands, Belgium and Italy.
Norway was the first out of these countries to introduce mandatory gender quotas, which have been in place for the board of publically listed companies in Norway since 2003. Companies in this country were called to fill 40% of the seats of their corporate supervisory boards with women. As does all regulation, the implementation of the quotas faced criticism. A particularly interesting denigration is that of the ‘Golden Skirt’ theory. This suggests that a powerful clique of women were provoked into collecting supervisory appointments, often holding 10 or more positions at a time. Whilst I envy any human-being who can successfully hold that many positions of responsibility, despite such suggestions, these quotas have actually achieved results. In Norway, before 2003, 7% of seats on supervisory boards were filled by women, today that figure is 40%. More than double the European average.
If mandatory legislative measures are to be introduced, they can be expected in the latter part of this year. Despite the controversy surrounding such actions, one thing is clear, at present self-regulation is not going far enough, fast enough. To this end, alternative options, regulatory or not, must be explored.
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November 4, 2022