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Summaries of EU Legislation

Gender balance in business leadership

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Gender balance in business leadership

Across the EU, women are noticeably under-represented in leadership positions in business. After several attempts to encourage self-regulation as a means to address this issue, and not having observed widespread results, the European Commission, in 2012, issued a communication and proposal for a new law.

SUMMARY

In January 2012, only 14 % of board members of major EU publicly listed companies and just 3 % of the chairpersons of these companies were women.

Although on the EU's political agenda for many years, there is a renewed impetus in the promotion of gender equality on the boards of the largest listed companies. In 2010, the European Commission adopted its own strategy for equality between women and men. This was followed, in 2011, by its launch of the ‘Women on the board pledge for Europe’ which called on publicly listed companies in Europe to voluntarily commit to increasing women's presence-on their boards to 30 % by 2015 and 40 % by 2020.

Not having noted much progress, except in a few countries which had introduced laws (or had considered doing so), in 2012 the Commission issued a communication outlining the state of play in the field, accompanied by a proposal for an EU-wide law setting procedural quotas.

The communication looks at the reasons why women are under-represented in business leadership positions and the main obstacles to their career progression.

  • Traditional gender roles: the division of labour, different educational choices (few women in sciences, technology, engineering and mathematics) and concentration of women in a few occupational sectors.
  • Lack of support to balance care responsibilities with work, which has an unbalanced impact on women’s and men’s work patterns.
  • Glass ceiling: women need to overcome preconceptions about requirements for leadership positions, discrimination or stereotyping. ‘Subtle’ barriers may exist such as the perception that women are either not interested or incapable of performing certain tasks or that these posts are ‘male’ jobs.
  • Lack of transparency in recruitment and promotion practice: the lack of women in senior positions influences companies’ decisions, including their attitude towards gender equality and the appointment of more female board members. Appointments to boards rely heavily on personal and professional contacts of current board members.

It is anticipated that opening the door to senior positions will encourage women to enter and stay in the workforce, thus helping to meet the employment target of 75 % set by the EU’s Europe 2020 strategy for smart, sustainable and inclusive growth.

The communication suggests complementing the proposed law with a comprehensive approach that would combine policy measures and financial support to improve women’s participation in the labour market and in leadership positions. Examples of actions that will be supported are as follows:

  • initiatives to combat stereotyped representations of roles in society, labour market and leadership;
  • creation of a social, economic and business environment supportive of balanced participation in leadership positions;
  • promotion of the business and economic case for gender equality and balanced representation in decision making;
  • support for and monitoring of progress towards balanced participation of women and men in decision-making positions across the EU.

BACKGROUND

ACT

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions — Gender balance in business leadership: a contribution to smart, sustainable and inclusive growth (COM(2012) 615 final of 14.11.2012)

RELATED ACTS

Proposal for a Directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures (COM(2012) 614 final of 14.11.2012).

last update 30.10.2015

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