4th January 2013

EU's women on board plans a 'door opener' for gender equality

Commission Vice-President Viviane Reding says the controversy surrounding the EU's women on board proposals has helped to shine a spotlight on tackling a "real problem within society".

Reding told an audience of EU policymakers and stakeholders that her women on board proposals would ensure that there are no more "excuses" based on arguments that there are not enough suitable female candidates for company top positions.

The event, organised by the Parliament Magazine in association with Aviva, discussed the next steps for the Luxembourgish official's proposals aimed at increasing female board representation, following a somewhat turbulent adoption process within the college of EU Commissioners.

Reding, the EU's justice Commissioner, told those attending the event that, "Something has now started which cannot be stopped anymore."

The proposal, which was initially postponed in October, has featured widely in the media.

"The issue of women on boards is very much en vogue these days. This is good as it puts a spotlight on a real problem in our society," Reding said, adding, "Everyone seems to be for or against, even if they haven't actually read the full proposal."

The directive, which was finally adopted by the College of Commissioners on November 14, will introduce a legally binding quota of 40 per cent of women on non-executive boards of public listed companies by 2020.

State owned companies will have to implement the quotas two years earlier, by 2018, said Reding, "because they should lead by example".

Executive boards will be left to set themselves self-regulatory "flexi quota" targets. However companies will then be obliged to report annually on the progress they have made on opening up their boards to women.

"Nobody will get a job just because they are female," Reding said, "but no woman will be denied a job just because they are a woman".

Despite the initial setback on announcing her plans in October, Reding said that support within the European commission was strong. "The fact that the proposal was co-signed by all the commissioners with an economic portfolio - Antonio Tajani, Olli Rehn, Joaquín Almunia, Michel Barnier and László Andor - reflects the proposal's economic importance."

"Economic and social objectives are two sides of the same coin when it comes to gender equality."

She went on to say that the proposal will also include an obligation for member states to introduce effective and dissuasive penalties against companies with less than 40 per cent women on their board that fail to introduce fair and transparent selection procedures that gives preference to qualified women. "A law that cannot be enforced is not a law. That's why we have given this proposal teeth. There will be sanctions for those companies in breach of the directive."

"Companies will have to establish a fair, transparent and open appointment procedure or else face sanctions."

Penalties will range from fines to the cancellation of new non-executive director appointments. However, she said that this will be left open and will depend on each member state as some already have their own sanctions in place.

"If a company does not have 40 per cent of women on its supervisory board, priority must be given to the qualified female candidates."

Reding explained that although 60 per cent of university graduates are women, only 15 per cent of those on supervisory boards are female.

"This is a shocking waste of talent…and this is why the commission is taking action.

Reding also unveiled that that on December 12 business schools across Europe, the United States and Asia will publish a searchable database for the benefit of companies, detailing around 8000 board-ready women that are, "well qualified and ready to start on the boards as of tomorrow".

"I know that there are those who argue that these rules would be nice to have but will not work because there aren't enough qualified women for these posts. Well, the pool of talent is there, so there shouldn’t be any excuses anymore that we can't find suitable women."

"Women are not only good for bringing a little colour, but they are also good for business," she added. "Studies show that company performance improves with female and male talent together, It allows for a more diverse and collective mind."

Reding went on to explain that she would be taking her plans to the European Council this week to explain the text, which she warned would be where the real fight to deliver her proposals would take place.

"I know the European Parliament is not the problem, the European Parliament is the solution," Reding said as she acknowledged MEPs' support in driving the issue forward.

"I foresee that if things go smoothly from now on, there will be lots of female appointments in 2013, even before the proposal is made into law," she added.

Amanda Mackenzie, Aviva's chief marketing and communications officer, congratulated Reding on her proposals, agreeing with the commissioner that "what we all want to see is balance across boards".

Mackenzie who is also a member of Lord Davies' women on board steering group in the UK, that provided a voluntary code of conduct aimed at increasing the number of women in boardrooms, said, "Five years ago, I was the first woman on the Aviva executive board. I've now been joined by three other women."

"It's fair to say that while change historically has been incremental, in less than 10 years we will be operating with a balanced leadership."

"This issue is about much more than quotas and it would be a shame if it ended just there. She added that the, "compound effect of a series of measure has got us to a place where 49 per cent of new FTSE 100 non executive directorships since March this year had been secured by women."

Mackenzie said that the measures taken by Aviva were the result of having the right leadership in place. "It's a top down issue, the right leaders can make this happen."

"We need a culture that is conducive to nurturing and keeping women in these positions and delivering directors for the future. But this won't happen without sustained effort and momentum. This starts in the classroom and ends in the boardroom."

Greens/EFA MEP Marije Cornelissen said she was also pleased with the directive's progress, and was grateful that commissioner Reding had "stuck by her proposal".