Europe’s public companies are not moving quickly enough to make boards more gender balanced, hurtng their own financial performance and hindering economic growth. European Commission Vice-President Viviane Reding, the EU’s Justice Commissioner and a co-chair of DLDwomen, a conference taking place in Munich July 11 and 12, tells Informilo that she wants action.
On 1 March 2011, Reding met top executives at publicly-listed companies to point out the under-representation of women. She challenged all publicly-listed companies to commit voluntarily to increasing women’s participation on corporate boards to 30% by 2015 and to 40% by 2020. Response has been tepid so Reding is considering legislation to make adding more women mandatory.
On 19 June Reding met with deans of some of Europe’s leading business schools and senior executive womenfrom across Europe who are involved in an initiative to curate a list of women who are “board-ready.” The chairs of Europe’s Industrial and Employee Associationswere also invited, with an eye to making further progress ongender diversity on Europe’s corporate boards. After the June meeting Vice-President Reding responded to questions from Informilo about why she feels quotas may be necessary
Q: Why do you think it is necessary to draft a law to mandate a minimum number of women on boards?
A: I am not a fan of quotas, but I do like the results they bring. At the present rate of progress, it would take decades to reach something approaching gender balance on company boards in Europe, that is to say at least 40% of women. In these difficult economic times when we are facing the challenges of an ageing population and skills shortages Europe cannot afford to waste time and precious human capital. It is more important than ever to take advantage of everyone’s skills: both female and male.
Q: Why involve Europe’s business schools?
A: Business schools play a crucial role in equipping young women for a career in business and helping them to reach the top. They are helping women to prepare for professional careers through seminars, training programs and providing networking opportunities.I do not accept the argument that there aren’t enough qualified women to fill supervisory boards. You just need to look at the list of 7,000 board-ready women that European Business schools published a few months ago to see that there are. All of these women fulfill stringent criteria for corporate governance as defined by publicly-listed companies, are well qualified and ready to go on the boards as of tomorrow. The pool of talent is there – companies should now make use of it.
Q: What sort of feedback did you get from the public consultation and how will this help shape any future law?
A:The number of responses received shows the great interest in this matter: the Commission received responses from almost 500 individuals, companies, organizations and governments from all over Europe. We are now analyzing all the responses and preparing an economic analysis. You will see the result of our assessment in the legal instrument which I will present in October.
Q: When would the proposed law be put into action?
A:The Commission’s Legislative Work Program for 2012 announces a legislative initiative on improving the gender balance in companies listed on stock exchanges. Any proposal would then have to be agreed in the normal legislative procedure by the European Parliament and Member States, represented by the Council of the EU. A lot will therefore depend on the speed of negotiation of the two legislators.
Q: Why did you meet with the Federation of Industries in Brussels and what sort of feedback did you get from them?
A: It is very important that businesses play an active role in the debate and that they help us shape any future proposal that will apply to them. During our three months consultation the European Commission received many contributions from businesses and industry associations to the consultation – which shows their interest in the debate. From all my discussions one thing has become clear: businesses are taking the matter seriously. They are accelerating their efforts to get more women on their boards because they have realized that women do not mean costs but additional benefits. Women mean business.
Q: What do you think the impact will be on European businesses? Will there be a trickle-down effect — i.e., will we see more women in C-suite positions?
A: At present, the relatively low number of successful female role models tends to compound stereotypes and reinforce perceived difficulties among women in rising up the corporate ladder. So conversely, I believe having more women in leadership positions in companies will indeed have a positive effect in encouraging more women to actually put themselves forward for those positions. We need more than just the one token woman on the board – then we will manage to trigger a real change in the predominantly male world of today — a change in corporate culture and in society as a whole.