(BRUSSELS) — In October, the European Parliament, in an unprecedented move, rejected a male candidate’s nomination for the European Central Bank (ECB) executive board because of … gender balance. Parliamentarians argued that Eurozone finance ministers should have nominated two candidates — a man and a woman — and accused them of gender bias. Although the European Parliament has only […]
(BRUSSELS) — In October, the European Parliament, in an unprecedented move, rejected a male candidate’s nomination for the European Central Bank (ECB) executive board because of … gender balance. Parliamentarians argued that Eurozone finance ministers should have nominated two candidates — a man and a woman — and accused them of gender bias.
Although the European Parliament has only consultative powers over ECB appointments and member states are likely to press on with the appointment regardless, the vote nevertheless sends a strong signal to the EU governments that they cannot continue to ignore the exclusion of women from the Eurozone’s highest decision making bodies. The appointment of yet another male candidate would mean that there is no woman at the European Central Bank top table.
The move was all the more outstanding that it came as Commissioner for Justice and Fundamental Rights Viviane Reding was trying to have a new draft law adopted by her colleagues at the Commission. The proposal aims at forcing publicly listed EU firms to increase the representation of women on their boards. Sanctions, including fines, would be left to member states to decide and impose.
But when she presented her paper to the other commissioners, President Barroso saw enough opposition around the table to decline, calling a simple majority vote. If the result of the vote had been negative, the draft law would have gone straight to the bin. Instead, the commissioners decided to hold fresh talks on Nov. 14, after reviewing some details of the text.
The initiative seems to be long overdue: Figures released by Reding’s office say 86 percent of board members and 97.5 percent of board chairs in the EU are men! The EU itself does not practice what it preaches: Reding noted that there are 27 percent women in senior management posts in the Commission and 33 percent in the College of Commissioners. The ECB has about 40 percent female staff overall but less than 20 percent of its top 80-or-so directors are women.
Women on boards pledge for Europe
Back in March 2011, Commissioner Viviane Reding urgently enlisted companies to sign a voluntary commitment entitled the “Women on boards pledge for Europe,” calling on large companies to increase women present at their board level. She promised to consider legislative action if the self-regulatory initiative did not yield results by March 2012. When the year was over, only 24 companies had signed the pledge. To Reding, the message rang crystal clear: “Self-regulation on its own has not and will not produce results.”
She kept her promise. Frustrated by what she calls “the lack of reaction to the pledge,” she took a legal initiative. But it now looks like she is facing an uphill fight. The text, calling for an increase of women at the board level to 30 percent by 2015 and 40 percent by 2020, has to be adopted by the College of Commissioners to become an official draft law that then goes to the European Parliament and to the Council of Ministers for formal approval.
Defending her paper, Reding explained, “Today, more women than men graduate from universities: 60 percent of university graduates are women. On average, women account for close to 60 percent of the workforce across the EU.” Hence, she argued, “It is now clear that women and men cannot be discriminated against on grounds of gender. Be it in employment and occupation, vocational training, social security or access to goods and services: women and men have to be treated equally.”
In one area — economic decision-making — reality is particularly disappointing. Gender diversity in the boardrooms of European companies is showing no signs of improvement. Across the EU, according to the commissioner, “Company boards are dominated by one gender: 86.5 percent of board members are men while women represent just 13.5 percent. 97.5 percent of the chairpersons are men and only 2.5 percent are women. If you compare this to the 60 percent of female university graduates, you understand that something is profoundly wrong.”
Not only that: Reding also believes there is a solid business case for equal representation of women and men on company boards. She argues that “numerous studies – by Crédit Suisse, McKinsey, Deutsche Bank and others – show that companies with more women in top management enjoy better governance and financial performance. The McKinsey study has, for instance, shown that companies with women on their boards outperform their men only rivals with a 42 percent higher return in sales, 66 percent higher return on invested capital and 53 percent higher return on equity. Or take the Crédit Suisse study which shows that, over the past six years, companies with at least one female board member significantly outperformed those with no women on the board in terms of share price performance.”
Discussions around the theme are fast becoming passionate or ideological. The commissioner for justice and fundamental rights faces opposition from pro-business commissioners and some of the member states, who, although claiming to support the general goal, do not want mandatory targets imposed on companies. Strong reluctance has also come from some of the nine other female commissioners who are opposed to the quotas for ideological reasons.
Quotas: Good or bad?
The issue of quotas has always been a tricky one. While some women appear to consider them as necessary, at least during a certain period of time, in order to put an end to the discrimination they face, others clearly oppose them because they say mandatory quotas might actually do them a disservice. They want to be judged on their own merits and they have the feeling that being chosen for a job because they are women would mean giving priority to gender over merit. They find it offensive to be given a job just because they are a woman.
There is a concern that the appointments would look “tokenistic,” leading to a devaluation of female achievements. Their vision is one of an ideal society based on the concept of “meritocracy” where people are given a job according to their qualification and talent, regardless of their gender, religion or skin-color. In fact, whenever there is talk about “affirmative action” measures, the same arguments — in favor or against — keep coming up, whatever the reason for the action, be it discrimination against blacks, migrants or … women.
However controversial mandatory quotas may be, it is difficult to quibble with the results in the countries that have introduced them. In Norway, which passed a law giving companies two years to implement a 40 percent quota for women in the boards – the first country in the world to do so – the number of women on supervisory boards rose from 25 percent in 2004 to over 40 percent today. In France, after adopting a legal quota in January 2011, the number of women on boards increased by 10 percentage points, jumping from 12 to 22 percent in the space of a year.
Quotas can help us achieve a breakthrough. But they should be transitional and a measure of last resort. “This mechanism is certainly not the ideal one,” says Alessandra Zocca, from Professional Women International-Belgium, a multi-national networking forum for women in business. “But quotas can help improve gender equality, create awareness of the imbalance and make companies reflect on the talent loss by losing female leadership. In any event, they are meant to be temporary.”
It is undeniable that decision-making positions are still widely dominated by men and changes to put an end to unjust male-centric working practices are long overdue. In an ideal world, businesses would achieve this voluntarily. But then, in an ideal world, there would be no sexism. So who in their right mind really believes sexism can be ended on a voluntary basis? Good laws are certainly indispensable, but there should also be a more general and constant promotion of a more equal and open culture. The media can contribute to eradicating a culture which is still strongly based on old stereotypes and traditions. The road to effective equality remains long and full of obstacles.