Today the European Commission has taken action to break the glass ceiling that continues to bar female talent from top positions in Europe’s biggest companies. The Commission has proposed legislation with the aim of attaining a 40% objective of the under-represented sex in non-executive board-member positions in publicly listed companies, with the exception of small and medium enterprises. Currently, boards are dominated by one gender: 85% of non-executive board members and 91.1% of executive board members are men, while women make up 15% and 8.9% respectively. Despite an intense public debate and some voluntary initiatives at national and European level, the situation has not changed significantly in recent years: an incremental average increase of the number of women on boards of just 0.6 percentage points per year has been recorded since 2003.
It is for this reason that the Commission is today proposing EU legislation to accelerate progress towards a better gender balance on the corporate boards of European companies. The proposal was presented jointly by Vice-President Viviane Reding (Justice, Fundamental Rights and Citizenship), Vice-President Antonio Tajani (Industry and Entrepreneurship), Vice-President Joaquín Almunia (Competition), Vice-President Olli Rehn (Economic and Monetary Affairs), Commissioner Michel Barnier (Internal Market and Services) and Commissioner László Andor (Employment and Social Affairs).
The Commission is today responding to the calls from the European Parliament which, with an overwhelming majority, has repeatedly called for legislation on equality between women and men in business leadership, notably in its resolutions of 6 July 2011 and 13 March 2012.
The proposed Directive sets an objective of a 40% presence of the under-represented sex among non-executive directors of companies listed on stock exchanges. 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 qualification, 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 have two years less, until 2018. The proposal is expected to apply to around 5 000 listed companies in the European Union. It does not apply to small and medium-sized enterprises (companies with less than 250 employees and an annual worldwide turnover not exceeding 50 million EUR) or non-listed companies.
José Manuel Barroso, President of the European Commission, said: "Today, with this proposal, the European Commission is answering the strong call of the European Parliament for EU action to bring about gender equality in corporate boardrooms. Today, we are asking large listed companies across Europe to show that they are serious when it comes to gender equality in economic decision-making. At my initiative, the Commission has significantly strengthened the presence of female Commissioners among its members, with one third of Commissioners being women."
Vice-President Viviane Reding, the EU's Justice Commissioner, added: "The European Union has been successfully promoting gender equality for over 50 years. However, there is one place where we have not seen any progress: company boardrooms. The example set by countries such as Belgium, France and Italy, who have recently adopted legislation and are starting to show progress, clearly demonstrates that time-limited regulatory intervention can make all the difference. The Commission's proposal will make sure that in the selection procedure for non-executive board members priority is given to female candidates – provided they are under-represented and equally qualified as their male counterparts."
"I am indebted to the numerous members of the European Parliament who have fought tirelessly for this cause and who have been instrumental in helping me get this proposal on the table."