EP hearing: Europe back on top with 50/50: Can gender parity present a cure for the crisis?

"I am convinced that improved gender equality has significant advantages – not only ethical but also economic ones. Decision-making at its best is based on views expressed by representatives of both genders with various cultural backgrounds. In these economically challenging times we should turn every stone to make full use of our talents in order to create value and to help European companies perform as well as possible."

Keynote speech by Vice-President Olli Rehn

Ladies and Gentlemen,

Thank you for the invitation to speak here today at this hearing on the very important topic of gender equality. Kofi Annan, former Secretary-General of the United Nations hit the nail on the head when he said:

"Gender equality is more than a goal in itself. It is a precondition for meeting the challenge of reducing poverty, promoting sustainable development and building good governance."

I could not agree more. To my mind, gender equality should not be seen as something isolated or separate from other policy areas. Anti-discrimination on any grounds and the promotion of equal opportunities are inherent themes in all policies, including economic policy.

There are a number of studies pointing to the significant gains of improved gender equality. There are advantages to be gained both in purely economic terms, such as substantial increases in GDP thanks to a more complete use of our economic and human potential, but also in terms of the stability, efficiency and functioning of societies as a whole.

Research commissioned by the Swedish presidency of the EU in 2009 concluded that labour market equality could in an optimistic scenario boost the GDP of Member States by an average of 27%, particularly if women reach the same rate of labour market participation as men. In the same vein, the Global Gender Gap Index 2011 shows that countries with more gender equality in general have higher GDP per capita.

The figures speak for themselves. Improving gender equality is of crucial importance and is without a doubt a central element in overcoming the economic crisis. However, as with other key challenges in this crisis, there is no silver bullet by which the challenges could be solved overnight. Actions are needed in several areas.

First and foremost, we need structural reforms that enable and support gender equality in education and in the labour markets.

Second, we need incentives and clear objectives to work towards.

Third, we need a change in mindset and attitudes in order to actually practice what we preach.   

Let me begin with the first set of challenges. The basis of equality in general and development lies in ensuring equal access to education around the world. It does not however stop there. In Europe we have done very well when it comes to education. The number of women in tertiary education outnumbers that of men in almost all countries. Despite this, women still earn less and are largely outnumbered by men in positions of responsibility in politics and business. This is where the structural aspects come into play.

The biological differences that follow from child bearing require appropriate policy measures. There must be appropriate mechanisms in place to ensure that the care of the child can be shared between the parents and that there are child-care facilities which are affordable and accessible for all. Work life must also enable family life, something which is promoted by for example part-time work and flexibility arrangements. This should however not impair career advancement opportunities.

Looking at the structures from an economic standpoint, it should always be more profitable to work than to stay at home. Therefore, such taxes that are disincentives to work should be looked over. This is something that we have underlined in context of the European Semester.

For instance, we recommend to Germany: "The low full-time participation of women in the labour force is a concern. Fiscal disincentives for second earners and the lack of full-time childcare facilities and all-day schools hinder female labour market participation."  Increasing the participation of women in the labour force would have a substantial job boosting effect, both directly and in-directly through employment opportunities opening up in for example the child care sector.

This brings me to the second aspect, which is finding the right set of incentives and objectives to improve gender equality.

Across the EU, women are still largely outnumbered by men in top positions in all fields, but particularly at the highest levels in politics and business. [In national parliaments, less than one in four members is a woman (with major differences across the EU). Here in the European Parliament, three in ten members are women.]

The situation is worst in business with, on average, one out of ten female members of boards in Europe's largest publicly quoted companies and only 3% of board chairpersons.

The European Commission has long recognized the need to promote gender balance in decision-making processes and positions. We have encouraged measures by various voluntary means. Unfortunately, our calls for actions have not delivered a satisfactory result and the situation has not changed significantly in recent years.

Therefore, in November we proposed legislation with the aim of reaching a 40% objective of the under-represented sex in non-executive board-member positions. This would concern publicly listed companies, with the exception of small and medium enterprises. The aim of this new legislation is to accelerate progress towards a better gender balance on the corporate boards of European companies.

 This proposal clearly set outs the objective, but you might ask yourself, where is the incentive? The way I see it, the incentive lies in improved decision-making, legitimacy and performance.

Gender-diverse companies are proved to perform economically better and are also respected by various stakeholders for showing commitment to equality and good corporate governance. In various assessments of the high-risk gambling in the financial sector leading up to the crisis, there are signs of in particular male employees being responsible for the majority of the unhealthy risk-taking. It has been suggested that more female employees would have prevented such excessive risk-taking.

Regardless of whether or not this claim can be fully substantiated, I am convinced that improved gender equality has significant advantages – not only ethical but also economic ones. Decision-making at its best is based on views expressed by representatives of both genders with various cultural backgrounds. In these economically challenging times we should turn every stone to make full use of our talents in order to create value and to help European companies perform as well as possible.

Our proposal for improved gender balance is now a subject of intense discussions by the co-legislators, and it is too early to say what will be the outcome. The Commission has given its seal to a strong legal instrument and a political signal that it is time to move from words to deeds in the field of gender equality.

The current proposal is proportionate and fair. It is a contribution towards creating a business and economic environment which is more equally balanced and offers women role models at the highest level, easing the way to recruit more women at different levels in the future. I do hope that the proposal will get the support of the co-legislators.

Finally, the third aspect that needs to be addressed in this context is that of attitudes. Business schools that follow their alumni's careers find that men are promoted on their potential but women on their performance, which tends to translate into slower advancement for women. In too many work places, working from home or leaving the office early in order to pick up the kids is seen as hampering productivity.

This is a problem - we need to change the mind-set, both between and within the sexes. We need to encourage young women to believe in themselves and pursue careers also in male-dominated sectors, such as for instance finance and technology. We need to ensure equal representation and equal pay for equal work. We need to make it possible to combine work and family life without impairing career advancement.

But above all, each and every one of us needs to start practicing what we preach. We can keep on putting forward legislative proposals on various aspects of gender equality. But in the end of the day, they will not do the trick unless the attitudes are changed and equality is seen as something inherent in our societies in all its' dimensions. Legislation sets the framework and the goals, but only as individuals can we make this a true reality.

Thank you.

Last update: 29/07/2014 |  Top