In November 2012, the European Commission proposed a directive that would set a goal to increase the percentage of women in non-executive board positions to 40%. Companies which have a lower share (less than 40%) of the under-represented sex among the non-executive directors will be required to make appointments to those positions on the basis of a comparative analysis of the qualifications of each candidate, by applying clear, gender-neutral and unambiguous criteria. Given equal qualifications, priority shall be given to the under-represented sex. The objective of attaining at least 40% membership of the under-represented sex for the non-executive positions should thus be met by 2020 while public undertakings – over which public authorities exercise a dominant influence – will be at this level by 2018.
Although the proposal is not yet law, it is already having an effect. The share of women on boards in publicly listed companies is on the rise; women represented on average 16% of board room members in October 2012, up from 11.8% two years earlier. The new figure represents a 4.2% increase, which is the highest year-to-year change yet recorded. An increase in the share of women on boards has been recorded in all but four EU countries.
According to Vice-President Reding, gender equality in employment is not a women’s issue, but a business and economic imperative. Today, women still only represent 16% of board members in Europe – a shocking waste of talent given that 60% of university graduates are female. Making use of female talent can improve companies’ performance. A number of studies suggest that companies with a higher share of women at top levels deliver stronger organizational and financial performance. According to Reding, the question is simply how to get there – and the answer is simple: time-limited regulatory intervention. The push for gender balance on boards is gaining steam. The glass ceiling is starting to crack. The increase in the share of women on boards in Europe over the past year has been the highest yet recorded. It has been greatest in countries such as France, Italy and Denmark, which have recently introduced legislation on this matter. They are the first motors of change.