Women on boards: an asset for Europe – by MEP Rodi KRATSA

The time has come to measure the importance of women’s potential in the business and economic decision making process. It is high time to implement the adequate conditions that will allow women to access boards of large companies, where they remain under-represented. The European Parliament and the European Commission have undertaken brave and realistic initiatives, committing themselves to finally break the glass ceiling. It is now urgent for Member States to take their responsibilities.
Since the Treaty establishing the European Economic Community, signed in Rome in 1957, women’s advancement in the labour market has been associated to matters of fairness and antidiscrimination. EU legislation is extensive in that respect. Over the years, from equal pay to workplace rights, the European Parliament has been at the forefront of progress in the field of equality between men and women in the labour market.
Enhanced gender equality is reflected in the figures: nowadays, women across the EU make up 60% of university graduates and their presence in the labour market has risen steadily to 62%, up from 55% in 1997.
Sadly, progress remains uneven and women remain poorly represented at high-management level within companies, both in managing roles as such and on various types of decision bodies. Women currently represent 16.6% of board members and 3% of the boardroom chairs of large listed companies in the EU. This is particularly worrying as European companies must make full use of all human talent in order to remain competitive in a globalised economy, and fully benefit from the internal market, favouring the free movement of goods and workers. Furthermore, global financial and economic crisis has given new urgency to the necessity for business to capitalise on the contributions women can make with their talents and skills.
Specific studies in Europe and the United States launched as of 2004 have shown that when women are present and well integrated into business decision bodies, including at the highest level, those companies tend to perform better, in terms of efficiency, turnover and profits. Over the years, the studies on this issue have multiplied. A study of McKinsey concludes companies with many women among the managerial positions achieve corporate profits which were 56% higher than those that had only men at the top ladder of hierarchy. Hence it is a matter of profitable management. Furthermore, companies with a larger number of women in their boards have witnessed better performance in terms of innovation, auditing, monitoring and risk management compared to the ones that have only men in their boards.
Even though initiatives have been undertaken by companies in order to tackle gender inequality in company boardrooms, it has become clear that they have failed to provide tangible results whereas results were triggered in Member States that had recently adopted binding measures, such as Belgium, Italy, France and Denmark. However, even though some progress has been noted, it remains uneven amongst companies. Moreover, the possibilities for women to evolve within companies and access top jobs vary from one Member State to another. This situation hampers the functioning of the internal market which has a negative impact both on companies and the human capital. Hence, we are aware that addressing at European level the issue of gender imbalance on company boards and a binding procedure with specific targets is necessary in order to efficiently tackle gender equality in boards. This is the message underpinning my initiative report on “Women and Business Leadership” adopted by the European Parliament in July 2011. For this reason, the European Parliament welcomed the Commission proposal on a “Directive of the European Parliament and Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures”. In my capacity of co-rapporteur of the legislative report, I passionately strived towards guaranteeing greater equality in decision-making positions for women and men in large sized listed European companies.
The resolution on the proposed directive, as amended and adopted by a large majority in the European Parliament on Wednesday 20 November 2013, calls for a transparent, open and meritocratic recruitment procedure guaranteeing equal access to both men and women on non-executive positions on boards of EU listed large companies and further promoting women’s participation. EU-listed companies should aim to ensure that at least 40% of their non-executive board members are women. Listed companies would have until 2020 to reach the target while public ones should do so by 2018.
Certainly, European companies cannot work towards meeting that objective at the same rhythm as they have different starting points. Women’s participation on boards of large companies listed on the stock exchange varies from 3% in Malta to 27% in Finland. For this reason, the European Parliament resolution proposes that companies should be sanctioned if they fail to comply with the obligation of implementing open and transparent procedures allowing both women and men who are equally qualified to be appointed or elected to non-executive board positions.
We have to welcome this proposed directive as an opportunity for Europe. We need to trust visionary companies with the implementation of the requirements set by the directive, and rest assured that companies will be able to adapt themselves to the necessary changes. Furthermore, we need to trust women’s skills and acknowledge their potential.
By adopting this legislative report the European Parliament sent out a clear and strong message to the Member States and European societies highlighting its commitment and determination. The Council now needs to match this ambition. This is imposed by European values for equality, companies’ requirements and economy’s needs. The Greek Presidency of the Council of the EU is striving towards achieving this important initiative for Europe. However Member States will need to be willing to further collaborate in order to guarantee the successful outcome of this proposal, key to enhanced equality and greater development.

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