Gender equality at the top of large companies remains dire. So the EU is proposing a rule to get 40% of senior posts filled by women
The European Union has a long history of promoting equality between women and men, and Europe can be proud of the progress it has made over the past few decades. Under EU laws, women no longer have to face discrimination because of their sex. EU rules also guarantee common minimum rights to family leave; 60% of new university graduates across the EU are female. And in spite of the economic crisis, the employment rate for women is 62%, up from 55% in 1997.
However, at the top levels of companies, many women continue to face a glass ceiling hindering their progression up the career ladder. Currently, company boards are dominated by one gender: 86.3% of board members and 96.8% of the boardroom chairs are men, while women make up 13.7% and 3.2% respectively. In the UK, 16% of board members are women – this is above the EU average of 13.7%.
Despite intense public debate and a few voluntary initiatives at national and European level, the situation has not changed significantly. A recent European commission study showed an increase of only 1.9 percentage points between October 2010 and January 2012. This compares with a long-term average rise over the past decade of just 0.6 percentage points per year. Tangible progress is the exception and not the rule. Progress is only visible in countries where quota laws were introduced. At this rate, it would take around 40 more years to even get close to at least 40% of both genders in boardrooms.
Now is the time to finish what we started 50 years ago with EU initiatives on gender equality and culminate this action by tackling the issue head on. In these difficult economic times – when we are facing the challenges of an ageing population and skills shortages, in addition to the financial crisis – it is more important than ever to take advantage of everyone's skills: both female and male.
Eleven EU member states (Belgium, France, Italy, the Netherlands, Spain, Portugal, Denmark, Finland, Greece, Austria and Slovenia) have recognised this and have already started to act by introducing different types of rules to advance gender equality on company boards. However, a piecemeal approach on such an important social and economic issue can hamper our single market. Companies need a coherent, reliable legal framework, especially when they want to do business in the EU's single market. Our proposal therefore aims to create an EU-wide framework for positive action rules that gives direction to national policymakers and legal certainty to businesses.
But this is not only about businesses. It is also about citizens who agree that today's situation should be changed. A recent Eurobarometer survey shows that 88% of Europeans and 90% of UK respondents believe that, given equal competences, women should be equally represented in the top jobs in business.
The key word here is "competences". We have taken great care when drafting our proposal because, on the one hand, we want to promote gender equality in boardrooms by specific measures in favour of the under-represented gender. Yet on the other hand, we must not and will not discriminate against individual candidates competing for a particular position in a company. Under our rules, qualification and merit will remain the key criteria for a job on the board. And of course, EU legislation promoting gender equality on the boards of companies has to be limited in time: measures in favour of the under-represented gender can only be possible if there is under-representation, otherwise this would lead to further inequality.
The new rules we are proposing strike the right balance. The new European 40%-rule will only apply to publicly listed companies while excluding small- and medium-sized businesses with less than 250 employees. It focuses on the non-executive director posts in order to send the right signal to the highest levels of companies. And it will have at its heart a transparent selection process aiming to reach a 40% representation of the under-represented sex by 2020 – based on clear criteria and a comparison of the candidates' skills and qualifications.
The time has come to break the glass ceiling that continues to bar female talent from getting to the top. The European commission has been promoting gender equality since 1957. Continuing along this path is not a revolution but a natural evolution. It started 50 years ago with guaranteeing equal pay for equal work and it continues today by guaranteeing equal opportunities in decision-making positions for women and men.
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