Conference of the European Commission about Equality between women and men – session on equality in decision-making

Last 19th and 20th of September several representatives of European gender related organisations came to Brussels to participate at the European Commission’s Conference: “Equality between Women and Men”.

Mrs. Mª Helena de Felipe, as President of AFAEMME and member of the European Commission’s Network of Women in Decision-Making in Politics and the Economy, took part in the plenary session "Equality in decision-making: diverse approaches for gender balanced corporate boards", which has been chaired by Mrs. Lowri Evans. Equality in decision-making is one of the five priority areas in both the Women’s Charter and the European Commission’s Strategy for Equality between Women and Men 2010-2015.

With regard to this issue, it is important to point out that, despite their growing presence in the labour force in the EU, women are still seriously underrepresented in economic decision making positions, especially in senior management functions and on corporate boards. The growth rate of women in the board seats of Europe’s largest listed companies is half a percentage point per year- this means that it will take another 50 years before a reasonable gender balance on board will be achieved. Moreover, women are almost completely absent in the leadership positions, as CEO’s and Chairpersons. Finally, there are significant variations in the current representation and the rate of change of women on boards across Europe: Norway is leading the way with almost 40% women on boards as a result of the quota legislation that came into force in 2008.

With all this data as a boost for action, it has been the Commission’s intention to stimulate the corporate sector to voluntarily take action to achieve more gender-balanced boards: after some crucial meetings, Vice-President Mrs. Viviane Reding called in her “Women on the Board Pledge for Europe” upon CEOs and/or Chairs of listed companies to commit to having at least 30% female board members by 2015 and 40% by 2020. FES Consulting Empresarial - a Spanish business consultancy which is co-owned by AFAEMME’s President – has been one of the first two companies which signed up to the voluntary Pledge. In March 2012 the European Commission will evaluate the impact of this Pledge and the measures taken by companies. If the progress is insufficient the Commission will consider implementing other measures at EU-level.

Gender equality in economic decision-making is not a “women’s issue” but a business imperative. The prevailing arguments are:

1. There is a positive correlation between a higher share of women at top levels and a company’s organizational and financial performance
2. Diversity may improve the quality of decision-making
3. There is a positive correlation between relatively high shares of women on boards with the quality of corporate governance and ethical behaviour
4. With more than half of the students (nearly 60%) graduating from Europe’s higher educational institutes being women, there would be a better utilization of the talent pool
5. Companies that can relate to customers’ needs with a balanced leadership team stand to gain market share and create better products and services for female consumers needs
6. A company’s diverse workforce and innovation strategy differentiates it from its competitors and enables to access new customer groups

The major categories of instruments and initiatives which have been developed across Europe to address the underrepresentation of women in senior management positions are:

• Individual company’s programs, such as developing the business case, setting targets and developing tools like mentoring and training programs;
• Cross-company or sector initiatives, like Prizes, Awards and Charters;
• Industry self-regulation instruments, like corporate governance codes:
  This tool relies on peer pressure within organizations in combination with outside pressures from stakeholders and the media instead of introducing and enforcing concrete or legal penalties. When the codes apply the principle of “comply or explain” a company is obliged to explain non-adherence to any part of the code in its annual report, first of all to its stakeholders and in general to society- this creates transparency and puts further pressure on companies to comply.
• Government legislative and policy initiatives, like quota laws:
  
  The introduction of quota legislation for the minimum representation of each gender on corporate boards in Norway has sparked wide-spread debate on action across the EU.
  
  In Spain the “Law on Effective Equality between women and men” (2007) recommended that companies with more than 250 employees and listed companies (IBEX 35) have to gradually appoint women on their boards until a proportion of between 40% and 60% of each gender has been reached by 2015. When companies apply for the equality label, public subsidies or state administration contracts, (non-)compliance with the law might be taken into account in the awarding process.
  
  In France listed companies and companies with at least 500 employees and revenues over € 50 million are obliged to appoint at least 20% women on their boards within 3 years (2015) and 40% within 6 years. The appointment of a board member who does not meet the gender criteria will be invalid and he/she will not receive the (financial) benefits attached to the position.
  
  The Netherlands adopted a legal target to achieve a minimum representation of 30% of each gender on boards (executive and supervisory) for large companies (over 250 employees, both listed and not listed) per January 2016. (Non-) compliance and action plans to achieve the target must be included in the annual report. The law is a temporary measure and relevant articles will be automatically deleted in 2016.
  
  Italy introduced quotas of one third of each gender by 2015 for boards of directors and statutory auditors’ boards of listed companies and state-owned companies. Sanctions are progressively a warning, followed by fines and ultimately forfeiture of the offices of all members of the board.
  
  Belgium adopted a law imposing one third of each gender in management boards of state and publicly listed companies. State companies will be granted one year to comply, listed companies five years and small to medium-sized (listed) firms eight years. Sanction for non-compliance is the loss of benefits by board members until the quota law has been complied with.

Outside the EU, the Norwegian Gender Equality Act (1981) required that 40% of each gender should be represented on publicly appointed boards, councils and committees. In 2004 the requirements were extended to boards of publicly owned enterprises and in 2006 (in effect as from 2008) to large joint stock companies in the private sector. It led to a dramatic and fast increase from 6% women on boards of public limited companies in 2002 to 36% in 2008.

CONCLUSIONS:

• A. The many initiatives taken to date have created AWARENESS and increased PRESSURE on companies and governments to improve women’s access to the decision-making power in the corporate world. However, progress has been glacially slow and more action is needed to reach gender balance in economic decision-making positions.
• B. By far the most effective instrument has been the Norwegian QUOTA LAW, but other relatively effective strategies can be found in Finland and Sweden.
• C. The major challenge in most countries is how to overcome RESISTANCE from the public and the corporate sector against quantified voluntary targets and legal quotas for board positions.
• D. Successful EU Member State strategies to achieve gender balanced boards may include these elements:
  • An ACTIVE ROLE OF THE GOVERNMENT in leading the change
  • Implementation of POLICIES ADRESSING THE CURRENT OBSTACLES for women to reach top positions (reconcile work, family and private life for both women and men; fight against gender stereotypes in education and the labour market; engage men)
  • A MONITORING & MEASURING SYSTEM at country level (data collection, reporting, publication of results)
  • The introduction of an adequate SYSTEM OF POSITIVE ENCOURAGEMENT and the use of CORPORATE GOVERNANCE CODES including a requirement to “comply or explain”, could further enhance accountability and put pressure.
  • ACTIVE PARTICIPATION OF ALL STAKEHOLDERS to develop and implement measures and initiatives, and exchange of GOOD PRACTICES between all actors involved.

SOME COMMENTS:

Mrs. Monika Queisser, Head of the Social Policy Division of the Organisation for Economic Co-operation and Development, made some very interesting recommendations:

• Generally involve men in the gender equality debate
• Establish financial incentives to stimulate fathers to take the parental leave
• Greater flexibility in the use of the parental leave
• Make the leave payments conditional on the return to work
• Provide financial support to childcare and out school hours
• Support the careers of those who take care of old people or children (training and psychological support)
• Prefer flexible full-time in stead of part-time because the latter is part of the wage-gap

Mrs. Queisser also highlighted that she would not recommend using at the same time the maternal and the parental leaves because this could lead to abuses.

Mr. Jonathan Rees, Director General of the Equality Office of the UK Government, pointed out that we have to be careful with imposing quotas because it is a problem if equality is not well constructed in the society; he thinks that the country has to be prepared and that it is necessary to first give a time to voluntarily achieve the requirements.

At the contrary, Mrs. Arni Hole, Director General of the Norwegian Ministry of Children, Equality and Social Inclusion, says clearly YES to the quota instrument. She thinks that it is not necessary to wait until a society or a country is prepared and that the best example is Norway -which was not prepared and where there has been a lot of criticism-: a country with very positive results in terms of gender equality.

A final interesting comment made during the Conference has been that the SMEs and the cooperation between employers’ federations, trade unions and Governments are the clue of the economic and financial crisis.

2010 Corporate Women Directors International Report

During the V Meeting of the European Network of Women in Decision-making in Politics and the Economy, held in Brussels (Belgium) on April 26th, Corporate Women Directors International (CWDI) presented the following country overview on the quota-instrument:

More women in top jobs key to economic growth, says EU report

Only one in 10 board members of Europe's biggest listed companies is a woman and all central bank governors in the EU are male. The economy would benefit by having full representation of both men and women in top positions, says a new report presented by the European Commission today. It comes ahead of a new strategy for gender equality that will be adopted by the European Commission later this year.

"If Europe is serious about getting out of the crisis and becoming a competitive economy through smart and inclusive growth then we have to make better use of women's talents and skills. Gender equality is therefore at the heart of our Europe 2020 strategy: getting women into work will help us get out of the crisis," said Viviane Reding, EU Commissioner for Justice, Fundamental Rights and Citizenship and Vice-President of the European Commission. "Studies have shown that companies where women are well represented also perform best financially. I call on companies and governments to work hard to make sure gender balance in senior positions becomes a reality. I also encourage talented women to take on the challenge of board membership and to apply as candidates for top jobs."

The report, "More women in senior positions – key to economic stability and growth," shows that women continue to be severely under-represented in economic decision-making. In the corporate world, men account for nearly 89% of the board members in Europe's biggest listed companies. The disparity is widest at the very top where only 3% of such companies have a woman in charge. Norway stands out as the only country with anything approaching gender balance: 42% women and 58% men on the boards of the largest listed companies – a result of a legal quota.

At the same time several studies have now shown that gender diversity pays off and that there is a positive correlation between the share of women in senior positions and company performance. For example, a study conducted in Finland found that firms with a gender-balanced board are on average 10% more profitable than those with an all-male board.

In political decision-making, the European Parliament is now at its most gender-balanced level since its inception in 1979, with 35% women and 65% men. The proportion of women members of national parliaments (single/lower house) across Europe as a whole has risen from 16% in 1997 to 24% in 2009. However, it is still well below the so-called critical mass of 30% deemed necessary for women to exert meaningful influence in politics. In national governments, the situation is improving steadily with the share of women senior ministers in EU governments at 27%. The European Commission counts nine women Commissioners (33%) and eighteen men (67%), the best gender balance yet – up from 5.6% in 1994/1995.

Over half (55%) of the Europeans polled in a recent Eurobarometer survey thought that the female/male ratio in parliaments should be addressed "urgently". With the worldwide economic crisis, women's role in businesses is increasingly important. For companies to survive and manage during the crisis, they need to have the best governance and attract the best talent possible. According to a study conducted under the Swedish EU Presidency in 2009, eliminating gender gaps in employment in the EU Member States could lead to a potential 15% - 45% increase in GDP (see Annex).

Rapid progress is therefore needed to achieve more equal representation of women and men in senior positions in all fields and at all levels. With the presentation of a "Women's Charter" on 5 March (IP/10/237), the Commission reaffirmed its commitment to stronger gender equality in all EU policies. The Charter will be implemented through a new strategy for gender equality to be adopted by the Commission later this year. One of the core priorities of this strategy will be promoting equality in decision-making.

Measures to improve gender balance in decision-making can include the establishment of gender equality plans, the definition of targets and regular monitoring, better provision for work-life balance, the promotion of women role models, mentoring programmes and networking.

Women and men in decision-making: highlights (First quarter 2010)

A quarterly update of the political domain of the European Commission's database on women and men in decision-making has just been completed.

Data were collected between 23rd February and 12th March 2010 and cover the results of national and regional elections that have taken place since autumn 2009 and any recent changes in the composition of governments.

Selected developments in terms of the gender balance include:

• The new college of Commissioners, which was approved by the European Parliament on 9 February 2010, includes nine women – one third of the twenty-seven members.
• On 10 February 2010, the Committee of the Regions (CoR) elected Ms Mercedes Bresso as its first ever woman president. The current membership of the CoR is made up of 20% women and 80% men.
• A number of government reshuffles have occurred across Europe since autumn 2009 and several had a positive impact on the gender balance:
  • In Norway, a reorganisation of the government at the end of October 2009 resulted in a parity cabinet with equal numbers of men and women.
  • In the Netherlands a caretaker government is in place following the collapse of the coalition government in mid-February and the interim cabinet includes 25% women ministers – slightly more than before.
  • In Denmark, the government reshuffle at the end of February 2010 resulted in one additional female member of the cabinet so that there are now nine women amongst the nineteen members (47% compared to 42% previously)
  • The governments of Belgium, Cyprus and Austria also each have one more woman in the cabinet than before.
• On the other hand, other government changes resulted in a decline in the representation of women:
  • In Germany, the sixteen member cabinet appointed at the end of October 2009 includes six women (38%), one fewer than the previous one.
  • In Romania, the cabinet appointed towards the end of December 2009 following a spell of political turmoil includes just one woman so that the male predominance has risen from 82% to 94%.
• At regional level, elections have taken place in Denmark and Slovakia.
  • In Denmark, the gender balance amongst elected members of regional assemblies improved in three of the five regions, with the region of Hovedstaden effectively achieving parity representation (49% women, 51% men). However, nationwide the share of women members rose by just one percentage point to 35%.
  • oIn Slovakia there were mixed results across the country and the overall share of women on regional assemblies was unchanged at 15%. The best results were in the regions of Bratislavski and Trenciansky where 24% women were elected, but in both cases the share is down from that in the previous assembly (25% and 33% respectively).

European Commission strengthens its commitment to equality between women and men

Ahead of International Women's Day, the European Commission strengthened and deepened its commitment to equality between women and men with a Women's Charter. This political declaration sets out five key areas for action and commits the Commission to building a gender perspective into all its policies for the next five years while taking specific measures to promote equality (see also IP/10/236 and MEMO/10/65 ).

"This Charter represents the commitment of the Commission to making gender equality a reality in the EU. Women and men still face widespread inequalities, with serious repercussions for economic and social cohesion, sustainable growth and competitiveness, and the ageing of Europe's population. It is therefore important to include a strong gender dimension in the future Europe 2020 strategy that the Commission will develop in the next five years. Especially in times of crisis, we need to incorporate the gender dimension in all of our policies, for the benefit of both women and men," said President José Manuel Barroso.

The Charter presents a series of commitments based on agreed principles of equality between women and men. It aims to promote:

• equality in the labour market and equal economic independence for women and men, namely through the Europe 2020 strategy;
• equal pay for equal work and work of equal value by working with Member States to reduce significantly the gender pay gap over the next five years;
• equality in decision-making through EU incentive measures;
• dignity, integrity and an end to gender-based violence through a comprehensive policy framework;
• gender equality beyond the EU by pursuing the issue in external relations and with international organisations.

The Charter responds in particular to the European Parliament's request to step up action to tackle violence. "I am particularly proud to be in charge of putting in place a comprehensive and effective policy framework to combat gender-based violence. Gender-based violence is a violation of fundamental rights, in particular human dignity, the right to life and the right to the integrity of the person. I will ensure that strong measures on the eradication of female genital mutilation are part of the strategy," said Viviane Reding, Commissioner for Justice, Fundamental Rights and Citizenship and Vice-President of the European Commission.

A new Eurobarometer survey on gender equality also released today shows that 62% of Europeans believe that gender inequality still exists in many areas of society. The survey also reveals that Europeans' top two priorities for action in this field are tackling violence against women and closing the gender pay gap (respectively 92% and 82% of respondents believe these issues should be addressed urgently). In addition, 61% believe that decisions at EU level have an important role to play in the fight against gender inequality.

The Charter will be followed by a new strategy for gender equality to be adopted by the Commission in mid-2010. The strategy will provide a coordinated framework for action across all EU policies.

The initiative comes 15 years after the Beijing Platform for Action agreed at the United Nations' Fourth Conference for Women. It follows a commitment made by President Barroso to establish a Women's Charter in his speech to the European Parliament on 5 September 2009.

European Conference on how and why gender equality should be viewed as an important factor in achieving long-term sustainable economic growth in the EU.

Last October 15th to 16th the European Commission’s Employment , Social Affairs and Equal Opportunities DG sponsored a conference in Stockholm (Sweden) on how and why gender equality should be viewed as an important factor in achieving long-term sustainable economic growth in the EU.

The conference aimed to explain how the links between high levels of economic activity (GDP per capita) and higher labour market participation by women and men works and which gender equality policy initiatives are required to create virtuous circles in the economy. Furthermore it discussed how a setback to gender equality can be prevented in times of deep economic crisis.

In connection with the conference there has been presented a study on the role of gender equality policy in economic growth and increased employment in member states and the EU. This study served as a basis for experience exchange and strategy discussions among participants.