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More Efforts Needed to Improve Gender Equality in Corporate Governance in the EU

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Abstract

The workforce in the EU is decreasing significantly compared to the US and Japan. This problem can to some extent be solved by having more women at the workplace. The European Commission is currently contemplating the introduction of obligatory quotas for women in the boardroom of private companies. In order to have a better understanding of the controversial and currently highly debated issue of obligatory gender diversity programmes in corporate governance, the Commission released a Green Paper on the EU Corporate Governance Framework in April 2011. By means of this Green Paper, the Commission invites all interested parties to submit their views on some important questions such as: should recruitment policies be more specific about the profile of directors to ensure that the board is suitably diverse? If so, how could that be best achieved and at what level of governance, i.e., national, EU or international? The present paper seeks to give an answer to these questions of the Commission. It examines at what level of governance gender diversity in the boardroom can be best achieved and also studies the effectiveness of obligatory and voluntary gender quotas in corporate governance as a tool to increase gender diversity in the boardroom.

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  27. Arts. 2(1) and 5(1) Directive 76/207/EEC, supra n. 28.

  28. Article 141(1) Treaty of Amsterdam: ‘Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied; (2) For the purpose of this article, “pay” means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer. Equal pay without discrimination based on sex means: (a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement; (b) that pay for work at time rates shall be the same for the same job; (3) The Council, acting in accordance with the procedure referred to in Article 251, and after consulting the Economic and Social Committee, shall adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value; (4) With a view to ensuring full equality in practice between men and women in working life, the principle of equal treatment shall not prevent any Member State from maintaining or adopting measures providing for specific advantages in order to make it easier for the underrepresented sex to pursue a vocational activity or to prevent or compensate for disadvantages in professional careers.’

  29. Article 141(3) Treaty of Amsterdam: ‘The Council, acting in accordance with the procedure referred to in Article 251, and after consulting the Economic and Social Committee, shall adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value.’ Directive 2006/54/EU of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, OJ L 204 of 26 July 2006, pp. 23–36: this Directive repeals Council Directive 75/117/EEC of 10 February 1975 on the approximation of the laws of the Member States relating to the application of the principle of equal pay for men and women and Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions.

  30. Article 141(4) Treaty of Amsterdam: ‘With a view to ensuring full equality in practice between men and women in working life, the principle of equal treatment shall not prevent any Member State from maintaining or adopting measures providing for specific advantages in order to make it easier for the underrepresented sex to pursue a vocational activity or to prevent or compensate for disadvantages in professional careers.’ See also the Preamble to Directive 2006/54/EC, supra n. 32.

  31. Article 13(1) Treaty of Amsterdam: ‘Without prejudice to the other provisions of this Treaty and within the limits of the powers conferred by it upon the Community, the Council, acting unanimously on a proposal from the Commission and after consulting the European Parliament, may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.’

  32. Council Directive 2000/78/EU of 27 November 2000 establishing a general framework for equal treatment in employment and occupation, OJ L 303 of 2 December 2000, pp. 16–22, and Directive 2004/113/EU of 13 December 2004 implementing the principle of equal treatment between men and women in the access to and supply of goods and services, OJ L 373/37 of 21 December 2004, p. 37.

  33. Art. 3(1) Directive 2000/78/EU.

  34. For the consolidated versions of the TEU and TFEU, see OJ C 115/1 of 9.5.2008.

  35. Art. 157(1) TFEU: ‘Each Member State shall ensure that the principle of equal pay for male and female workers for equal work or work of equal value is applied; (2) For the purpose of this Article, “pay” means the ordinary basic or minimum wage or salary and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly, in respect of his employment, from his employer. Equal pay without discrimination based on sex means: (a) that pay for the same work at piece rates shall be calculated on the basis of the same unit of measurement; (b) that pay for work at time rates shall be the same for the same job; (3) The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, and after consulting the Economic and Social Committee, shall adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value; (4) With a view to ensuring full equality in practice between men and women in working life, the principle of equal treatment shall not prevent any Member State from maintaining or adopting measures providing for specific advantages in order to make it easier for the underrepresented sex to pursue a vocational activity or to prevent or compensate for disadvantages in professional careers.’

  36. Article 3 TEU 3: ‘The Union … shall combat social exclusion and discrimination, and shall promote social justice and protection, equality between women and men, solidarity between generations and protection of the rights of the child…’.

  37. OJ C 83/389 of 30.03.2010.

  38. Article 19(1) TFEU: ‘Without prejudice to the other provisions of the Treaties and within the limits of the powers conferred by them upon the Union, the Council, acting unanimously in accordance with a special legislative procedure and after obtaining the consent of the European Parliament, may take appropriate action to combat discrimination based on sex, racial or ethnic origin, religion or belief, disability, age or sexual orientation.’

  39. Article 19(2) TFEU: ‘By way of derogation from paragraph 1, the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, may adopt the basic principles of Union incentive measures, excluding any harmonisation of the laws and regulations of the Member States, to support action taken by the Member States in order to contribute to the achievement of the objectives referred to in paragraph 1.’

  40. Study on Non-Legislative Initiatives for Companies to Promote Gender Equality at the Workplace on Behalf of the European Commission, Austrian Institute for SME Research in cooperation with Euracle sprl, the European Institute for Managing Diversity, the Centre for Creative Leadership Europe and the European Network for Social and Economic Research (March 2010), at p. 6.

  41. Ibid., at pp. 107–107.

  42. Commission Staff Working Document, background document accompanying the Communication from the Commission about the Strategy for Equality between Women and Men 2010–2015, supra n. 26, at p. 20.

  43. Dezso and Ross, supra n. 18.

  44. Ibid., at p. 10; for a study about women in academic science, see Ackers, supra n. 7.

  45. Report on Progress and Equality between Women and Men in 2010, supra n. 15, at p. 12.

  46. For the Female Board Index, see: <http://www.toezichtencompliance.nl/nieuws?cID=929>; De Volkskrant, 13 September 2010, pp. 1 and 21, and NRC Handelsblad, September 2011.

  47. European Gender Equality Law Review, No. 2/2009, at p. 94.

  48. European Commission, Report on Progress on Equality between Women and Men in 2010: The Gender Balance in Business Leadership (2011), available at: <http://gbaforwomen.wordpress.com/2011/03/08/eu-report-on-progress-on-equality-between-women-and-men-in-2010-the-gender-balance-in-business-leadership>, at p. 59.

  49. ‘In Germany, a Quota for Female Managers’, Time, 22 March 2010, available at: <http://www.time.com/time/business/article/0,8599,1974109,00.html#g>.

  50. See Directive 2009/109/EC of the European Parliament and of the Council of 16 September 2009 amending Council Directives 77/91/EEC, 78/855/EEC and 82/891/EEC, and Directive 2005/56/EC as regards reporting and documentation requirements in the case of mergers and divisions; Directive 2007/63/EC of the European Parliament and of the Council of 13 November 2007 amending Council Directives 78/855/EEC and 82/891/EEC as regards the requirement of an independent expert’s report on the occasion of merger or division of public limited liability companies; Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies; Directive 2006/68/EC of the European Parliament and of the Council of 6 September 2006 amending Council Directive 77/91/EEC as regards the formation of public limited liability companies and the maintenance and alteration of their capital; Directive 2005/56/EC of the European Parliament and of the Council of 26 October 2005 on cross-border mergers of limited liability companies; Directive 2004/25/EC of 21 April 2004 on takeover bids; Directive 2003/58/EC of 15 July 2003 amending Council Directive 68/151/EEC as regards disclosure requirements in respect of certain types of companies; Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees; Directive 2009/102/EC of the European Parliament and of the Council of 16 September 2009 in the area of company law on single-member private limited liability companies; Eleventh Council Directive 89/666/EEC of 21 December 1989 concerning disclosure requirements in respect of branches opened in a Member State by certain types of company governed by the law of another State; Eighth Council Directive 84/253/EEC of 10 April 1984 based on Article 54(3)(g) of the Treaty on the approval of persons responsible for carrying out the statutory audits of accounting documents; Seventh Council Directive 83/349/EEC of 13 June 1983 based on the Article 54(3)(g) of the Treaty on consolidated accounts; Sixth Council Directive 82/891/EEC of 17 December 1982 based on Article 54(3)(g) of the Treaty, concerning the division of public limited liability companies; Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies; Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards; Directive 2009/101/EC of the European Parliament and of the Council of 16 September 2009 on coordination of safeguards; Council Regulation (EC) 2157/2001 of 8 August 2001 on the Statute for a European company (SE); and Council Regulation (EEC) 2137/85 of25 July 1985 on the European Economic Interest Grouping (EEIG).

  51. Communication from the Commission to the Council and the European Parliament, ‘Modernising Company Law and Enhancing Corporate Governance in the European Union — A Plan to Move Forward’, COM/2003/0284 final.

  52. Feedback Statement, Summary of Responses to the Commission Green Paper on the EU Corporate Governance Framework of 15 November 2011, D(2011), Question 6, at p. 8.

  53. Green Paper: The EU Corporate Governance Framework, supra n. 24.

  54. Cf. supra section 3: An assessment of regulatory EU intervention to stimulate the career of women.

  55. ‘Imposing Quotas for Women in Boardrooms Tackles a Symptom of Discrimination, Not the Cause’, The Economist, 11 March 2010.

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  57. Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions of 21 September 2010, ‘Strategy for Equality between Women and Men 2010–2015’, COM(2010) 491 final.

  58. At the moment, Sweden is the world leader in terms of the number of women in political decision-making bodies at national, regional and local level. However, only 3.1 per cent of the board members in large private enterprises are women. The gender distribution in public companies is more balanced, with 46 per cent of the seats occupied by women.

  59. See Strategy for Equality between Women and Men 2010–2015, supra n. 60.

  60. The ‘My Family Matters’ package includes: cover for up to a maximum of 20 days’ emergency childcare costs; maximum allowance of 18 weeks of full maternity pay extended to a larger number of staff (those with four years’ service or more); one-stop-shop website providing information and details on available support; mentoring site to bring together parents and new mothers; comfort rooms for pregnant women; first-aid classes available for parents with very young children; coaching and training workshops on legislation, parenthood and work-life balance issues.

  61. See <http://www.wheretowork.com/kpmg/Women_in_KPMG.pdf>. au65_See <http://www.siemens.com/sustainability/en/core-topics/employees/references/index.php>.

  62. See <http://www.dp-dhl.com/en/career/graduates/whydpdhl/worklife.html>.

  63. See <http://www.generali.com/Generali-Group/Sustainability/employees/work-life-balance>; <http://www.henkeldiversity.com>; <http://www.tui-group.com/en/sustainability/employees/health_family_/family>.

  64. See <http://careers.accenture.com/Microsites/uk-graduate-joiners-consulting/whats-in-it-for-me/Pages/gender.aspx>.

  65. Cf. supra section 3: An assessment of regulatory EU intervention to stimulate the career of women.

  66. See ‘Female Future — Mobilizing Talents — A Business Perspective’, at p. 2, available at: <http://www.nho.no/files/Female_Future_English_Summary.pdf>.

  67. Report on Progress on Equality between Women and Men in 2010, supra n. 51, at p. 58, note 21.

  68. B. Corcoran, ‘Failing Well’, in L. Coughlin, E. Wingard and K. Hollihan, eds., Enlightened Power: How Women Are Transforming the Practice of Leadership (Jossey-Bass A Wiley Imprint 2005).

  69. Cf. supra section 3: An assessment of regulatory EU intervention to stimulate the career of women.

  70. The Commission has recently taken pro-active steps to stimulate female presence in the boardroom in the Strategy for Equality between Women and Men 2010–2015, supra n. 60. In this Communication, the Commission states that cooperation with the Member States should be improved through an annual report on gender equality identifying the good practices of Member States; an annual Gender Equality Dialogue involving the Parliament, the Council and key stakeholders; a high-level group on gender mainstreaming involving the Member States; and an advisory committee which advises the Commission on policy and legislative initiatives.

  71. In 2002, the European Parliament and the Council took incentive measures in the field of employment and asked the Member States to mainstream the principle of gender equality, in particular for men and women in employment and labour markets and to take actions to reconcile working and family life, see Decision No. 1145/2002/EC of the European Parliament and of the Council of 10 June 2002 on Community incentive measures in the field of employment — Statement by the Commission, OJ L 170, 29.6.2002, pp. 1–6.

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  1. T.M.C. Asser Institute, Hague, The Netherlands

    Karolien Pieters (Senior Researcher in European Law)

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Pieters, K. More Efforts Needed to Improve Gender Equality in Corporate Governance in the EU. Eur Bus Org Law Rev 13, 475–496 (2012). https://doi.org/10.1017/S1566752912000316

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