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Women’s corporate roles still lag in EU

Mandatory quotas being considered

The EU’s Viviane Reding says firms with equal representation of women on their boards outperform other companies.
The EU’s Viviane Reding says firms with equal representation of women on their boards outperform other companies. (Yves Logghe/Associated Press)

BRUSSELS - The European Union is moving closer to introducing mandatory quotas for the number of women on company boards after businesses failed to make sufficient progress in gender equality over the past year.

The EU’s justice commissioner, Viviane Reding, said Monday that at the current rate it would take more than 40 years for women to hold 40 percent of board positions in Europe’s publicly traded companies.

“One year ago, I asked companies to voluntarily increase women’s presence on corporate boards,’’ Reding said. “However, I regret to see that despite our calls, self-regulation so far has not brought about satisfactory results.’’

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The European Commission, the EU’s executive arm, said that over the past 12 months only 24 companies had signed a pledge to ensure that 30 percent of their board positions are held by women by 2015. By 2020, that figure should increase to 40 percent.

At the moment, only one in seven - or less than 14 percent - of board members at Europe’s biggest companies are women, the commission said. That is up only slightly from just under 12 percent in 2010, despite the fact that 60 percent of university graduates are women.

The percentage of women chairing major European companies even fell slightly over the past two years, to 3.2 percent from 3.4 percent in January 2010.

The commission says that the low number of women in decision-making positions in big companies is not only a sign of gender inequality, but also hurts companies’ results.

“Women do not mean cost for companies. Women mean a benefit. Women mean business,’’ Reding said, citing studies that firms with equal representation of women on their boards had 56 percent higher operating profit compared with companies with all-male boards.

Women ask more questions; are less likely to make decisions with high short-term risks; and, because they make the majority of spending decisions in households, have better feelers for changes in consumer demand, Reding said.

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The commission is asking companies and citizens whether they believe quotas are necessary, as well as what targets and potential sanctions should be set. It said legislation on gender equality - including quotas - could come later this year based on that consultation.

“I am not fond of quotas,’’ Reding said. “But I very much like what quotas do.’’

Several EU states - including Belgium, France, Italy, the Netherlands, and Spain - have already adopted gender quotas for companies, while others have minimum levels for women in state enterprises.

Reding said that national legislation, or even the prospect of national legislation, helped lift more women into powerful posts.

France alone was responsible for half the EU-wide increase, Reding said, bringing its own percentage to 24 percent from just 12 percent a year earlier.