Eurocadres supports the Women on Boards Directive: It is time to move forward
A proposal for an EU Directive on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures was submitted in 2012 but has been stagnant in the EU Council already for ten years. The European Commission’s president Ursula von der Leyen has made a clear statement, that the proposal for a directive should be unlocked and pushed forward within the year 2022.
One reason for that delay has been strongly differing views whether the matter should be dealt with at a national level or at the EU level. The proposed directive sets a target for 40% of non-executive directors in listed companies to be women, with the possibility of a lower 33% objective for single-tier management systems.
In this 10-year period, there has been progress and many of the member states have introduced regulation intended to facilitate women’s access to boards. Yet, in all member states, men make up the majority of board directors and women are underrepresented. New gender quotas for boards have been implemented in 9 member states and in 18 member states Corporate Governance Codes have been amended with recommendations for the representation of women on boards. Despite the progress very few boards are gender balanced in a way that men and women each make up between 40% and 60% of members.
The outcomes of several studies clearly show that gender quotas are an effective policy for increasing the share of women on corporate boards. The presence of women on boards reinforces a company’s culture and public image of diversity and inclusion, thus allowing companies to retain and cultivate their best talent at all levels. Even though the progress of the last decade is positive, the EU and its member states should effectively promote gender equality in decision making with the directive for women on boards.
Gender equality is a fundamental EU value. Aging of the population and therewith demographic changes will require the inclusion of all human potentials and we need to enable the potentials of society. As one of the three recognized European cross-sectoral social partners Eurocadres represents six million professionals and mangers and strongly promotes gender equality and women in leadership. The women on board directive is an essential instrument, and Eurocadres requires strong action and commitment to enforce the directive.
This underrepresentation of women on boards is one of the key gender gaps in the European Union. Without closing this gender gap in board representation, gender equality in economic decision making cannot be reached. The proposed EU level gender quota directive is as an effective instrument for achieving gender equality in economic decision-making.