Women on Boards: Commission proposes 40% objective
Official European Commission page http://ec.europa.eu/justice/newsroom/gender-equality/news/121114_en.htm#Press
Date: 14/11/2012
Today the European Commission has taken
action to break the glass ceiling that continues to bar female talent
from top positions in Europe’s biggest companies. The Commission has
proposed legislation with the aim of attaining a 40% objective of the
under-represented sex in non-executive board-member positions in
publicly listed companies, with the exception of small and medium
enterprises. Currently, boards are dominated by one gender: 85% of
non-executive board members and 91.1% of executive board members are
men, while women make up 15% and 8.9% respectively.
Press Pack
- Press Release: Women on Boards: Commission proposes 40% objective
- Memo: Questions and Answers: Proposal on increasing Gender Equality in the Boardrooms of Listed Companies
- Communication: Gender balance in business leadership: a contribution to smart, sustainable and inclusive growth(168 KB)
- Proposal for a Directive of the European Parliament and of the Council on improving the gender balance among non-executive directories of companies listed on stock exchanges and related measures
- Impact Assesment(416 KB) , Annexes(796 KB) , Executive Summary(87 KB)
- Consultation on Gender imbalance in corporate boards in the EU
- Eurobarometer: Women in decision-making positions
- Press conference recording
General Factsheets
- The economic arguments(410 KB)
- Gender equality in the Member States(399 KB)
- Legal aspects(96 KB)
- Gender equality in the European Commission(148 KB)
Country Specific Factsheets
Press Release
Despite an intense
public debate and some voluntary initiatives at national and European
level, the situation has not changed significantly in recent years: an
incremental average increase of the number of women on boards of just
0.6 percentage points per year has been recorded since 2003.
It is for this reason that the Commission is
today proposing EU legislation to accelerate progress towards a better
gender balance on the corporate boards of European companies. The
proposal was presented jointly by Vice-President Viviane Reding
(Justice, Fundamental Rights and Citizenship), Vice-President Antonio
Tajani (Industry and Entrepreneurship), Vice-President Joaquín Almunia
(Competition), Vice-President Olli Rehn (Economic and Monetary Affairs),
Commissioner Michel Barnier (Internal Market and Services) and
Commissioner László Andor (Employment and Social Affairs).
The Commission is today responding to the
calls from the European Parliament which, with an overwhelming majority,
has repeatedly called for legislation on equality between women and men
in business leadership, notably in its resolutions of 6 July 2011 and 13 March 2012.
The proposed Directive sets an objective of a
40% presence of the under-represented sex among non-executive directors
of companies listed on stock exchanges. Companies which have a lower
share (less than 40%) of the under-represented sex among the
non-executive directors will be required to make appointments to those
positions on the basis of a comparative analysis of the qualifications
of each candidate, by applying clear, gender-neutral and unambiguous
criteria. Given equal qualification, priority shall be given to the
under-represented sex. The objective of attaining at least 40%
membership of the under-represented sex for the non-executive positions
should thus be met by 2020 while public undertakings – over which public
authorities exercise a dominant influence – will have two years less,
until 2018. The proposal is expected to apply to around 5 000 listed
companies in the European Union. It does not apply to small and
medium-sized enterprises (companies with less than 250 employees and an
annual worldwide turnover not exceeding 50 million EUR) or non-listed
companies.
José Manuel Barroso, President of the
European Commission, said: "Today, with this proposal, the European
Commission is answering the strong call of the European Parliament for
EU action to bring about gender equality in corporate boardrooms. Today,
we are asking large listed companies across Europe to show that they
are serious when it comes to gender equality in economic
decision-making. At my initiative, the Commission has significantly
strengthened the presence of female Commissioners among its members,
with one third of Commissioners being women."
Vice-President Viviane Reding, the EU's
Justice Commissioner, added: "The European Union has been successfully
promoting gender equality for over 50 years. However, there is one place
where we have not seen any progress: company boardrooms. The example
set by countries such as Belgium, France and Italy, who have recently
adopted legislation and are starting to show progress, clearly
demonstrates that time-limited regulatory intervention can make all the
difference. The Commission's proposal will make sure that in the
selection procedure for non-executive board members priority is given to
female candidates – provided they are under-represented and equally
qualified as their male counterparts."
"I am indebted to the numerous members of the
European Parliament who have fought tirelessly for this cause and who
have been instrumental in helping me get this proposal on the table."
Slow progress has led to fragmented action in 11 Member States
Just 1 in 7 board members (13.7%) at Europe’s
top companies is a woman. This is only a slight improvement from 11.8%
in 2010. At this slow rate of progress it would still take around 40
years to even get close to gender balance in boardrooms (at least 40% of
both sexes).
As a consequence, several EU Member States
have started to introduce different types of laws for company boards. 11
Member States (Belgium, France, Italy, the Netherlands, Spain,
Portugal, Denmark, Finland, Greece, Austria and Slovenia) have
introduced legal instruments to promote gender quality on company
boards. In eight of these countries, legislation covers public
undertakings (see factsheet with country-specific overview). Meanwhile, a
further 11 EU countries have neither self-regulation measures nor
legislation in place. This legally fragmented approach risks hampering
the functioning of Europe's Single Market, as different company law
rules and sanctions for not complying with gender balance laws can lead
to complications for businesses and have a deterrent effect on
companies’ cross-border investments. This is why today's proposal seeks
to create an EU-wide framework for such positive action rules.
Main elements of the proposal:
- The Directive sets a minimum objective of 40% by 2020 for members of the under-represented sex for non-executive members of the boards of publicly listed companies in Europe, or 2018 for listed public undertakings.
- The proposal also includes, as a complementary measure, a "flexi quota": an obligation for listed companies to set themselves individual, self-regulatory targets regarding the representation of both sexes among executive directors to be met by 2020 (or 2018 in case of public undertakings). Companies will have to report annually on the progress made.
- Qualification and merit will remain the key criteria for a job on the board. The directive establishes a minimum harmonisation of corporate governance requirements, as appointment decisions will have to be based on objective qualifications criteria. Inbuilt safeguards will make sure that there is no unconditional, automatic promotion of the under-represented sex. In line with the European Court of Justice's case law on positive action, preference shall be given to the equally qualified under-represented sex, unless an objective assessment taking into account all criteria specific to the individual candidates tilts the balance in favour of the candidate of the other sex. Member States that already have an effective system in place will be able to keep it provided it is equally efficient as the proposed system in attaining the objective of a presence of 40% of the under-represented sex among non-executive directors by 2020. And Member States remain free to introduce measures that go beyond the proposed system.
- Member States will have to lay down appropriate and dissuasive sanctions for companies in breach of the Directive.
- Subsidiarity and Proportionality of the proposal: The 40% objective applies to publicly listed companies, due to their economic importance and high visibility. The proposal does not apply to small and medium enterprises. The 40% objective is focused on non-executive director posts. In line with better regulation principles, the Directive is a temporary measure and is set to expire in 2028.
"This measure is there to swiftly bring
about gender equality in Europe's corporate boardrooms. It will no
longer be needed once progress in this area has been achieved," added
Vice-President Viviane Reding.
Background
The EU's competence to legislate in gender equality matters dates back to 1957 (see SPEECH/12/702 ).
Council Recommendations on promoting the balanced participation of men
and women in the decision-making process date back to 1984 and 1996. In
addition, the European Parliament has called for legally binding quotas
at EU level in several Resolutions.
Promoting more equality in decision-making is one of the goals in the European Women's Charter (see IP/10/237 ),
which was initiated by President José Manuel Barroso and Vice-President
Viviane Reding in March 2010. The Commission followed through on these
commitments by adopting a Strategy for Equality between Women and Men in
September 2010 for the next five years (see IP/10/1149 and MEMO/10/430 ).
A report by the Commission(385 KB)
in March 2012 showed that, across the EU, company boards are currently
dominated by one gender. There are also big differences between
countries, with women making up 27% of board members in the largest
Finnish companies and 26% in Latvia, but only 3% in Malta and 4% in
Cyprus.
Progress in improving the gender balance in
Europe's boardrooms over the past year has been the best it has been for
a long time (a 1.9 percentage point increase from October 2010 to
January 2012, compared to a long-term average rise over the last decade
of 0.6 percentage points per year). This increase can be attributed to
calls from the Commission and the European Parliament (MEMO/11/487 )
and a number of national legislative initiatives in the Member States.
But overall, change remains stubbornly slow. The number of women
chairing major company boards has even declined, falling to 3.2% in
January 2012 from 3.4% in 2010.
Tangible progress is the exception and not
the rule. Progress is only visible in countries that have introduced
legally binding laws for company boards. France, which introduced a
legal quota in January 2011, accounts alone for more than 40% of the
total EU-wide change recorded between October 2010 and January 2012.
In March 2011, EU Justice Commissioner
Viviane Reding challenged publicly-listed companies in Europe to
voluntarily increase the number of women in their boardrooms by signing
the 'Women on the Board Pledge for Europe' (MEMO/11/124 ).
The pledge called on companies to commit to raising female
representation on their boards to 30% by 2015 and 40% by 2020. However,
after a year, only 24 companies across Europe had signed the Pledge.
To identify appropriate measures for
addressing the persistent lack of gender diversity in boardrooms of
listed companies in Europe, the Commission launched a public consultation (see IP/12/213 ).
Following a large number of responses, the Commission then assessed the
different policy options for addressing the situation.
A growing number of studies suggest gender
balanced boards have the potential to improve the financial performance
of companies. Having more women in top jobs can contribute to a more
productive and innovative working environment and improved company
performance overall. This is mainly due to a more diverse and collective
mind-set which incorporates a wider range of perspectives and therefore
reaches more balanced decisions. In addition, women account for 60% of
new university graduates but only few make it to the top of companies.
Opening the door to senior positions will act as an incentive for women
to enter and stay in the workforce, helping to raise female employment
rates. Having more women in the workforce will help achieve the target
set by the Europe 2020 Strategy – the EU's growth strategy – to raise the employment rate for women and men aged 20-64 to 75% by 2020.
Δεν υπάρχουν σχόλια:
Δημοσίευση σχολίου