Proposal sets targets for Europe’s largest companies to achieve gender equality on their boards.
Ensuring women have a clear path to top positions is not only fair, but good for Europe’s economic competitiveness. Studies have found that companies with a more equitable balance outperform their rivals.
But change at the top has been slow. For example, women make up around 14% of the boards of the EU’s biggest publicly listed companies – compared with 12% in 2010. At this rate it would take around 40 years before companies come close to a balance.
Europeans agree something must be done. Almost 9 out of 10 say women should be equally represented in the top jobs in business (given equal qualifications). And about 3 in 4 favour legislation on gender balance on company boards.
In response the Commission is proposing measures to right the imbalance. The measures would set a minimum target of 40% for the under-represented sex for non-executive board members of the largest companies listed on Europe’s stock exchanges.
The measures would only apply to listed companies with 250 or more employees and with over €50 million in annual worldwide turnover – around 5 000 companies in total.
State-owned companies or those in which governments have a significant financial stake (and influence) would have to meet the target by 2018.
Companies under the 40% target would be required to apply clear, gender-neutral standards and choose candidates on their qualifications and merit. If 2 candidates are equally qualified, priority should be given to the under-represented sex – which in most cases would be a woman.
The measures would be temporary – automatically expiring in 2028 when gender balance is expected to have been achieved.
Companies would also be required to set their own targets for achieving balanced gender representation for executive directors by 2020 (2018 for state-owned companies). These are board members who simultaneously hold key positions in the day-to-day running of a company.
Governments would be responsible for setting sanctions for companies in breach of EU standards.
Countries with effective systems in place for achieving gender equality would be able to keep them in place. They may also introduce measures that go further than EU measures.
Belgium, France, Italy, the Netherlands, Spain, Portugal, Denmark, Finland, Greece, Austria and Slovenia already have rules to promote gender balance on company boards.
Providing an example
Opening the doors to senior positions will encourage more of them to enter and stay in the workforce, helping to raise women employment rates and making full use of their skills.
The proposal will now pass to EU governments and the European Parliament (which has repeatedly called for legislation).