Low representation of women on company boards

Denmark currently has one of Europe’s highest female employment rates and Danish women are among those countries with the highest educational qualifications in Europe. However, this relative success is not reflected in the number of female managers and representatives on company boards. According to recent statistics from Eurostat and the Nordic Council, this represents an area in which Denmark lags behind most European countries. The Danish gender pay gap is also relatively high, despite the country’s highly qualified female workforce.

Women’s participation in employment and education

A well-educated female workforce and a high female employment rate make Denmark one of the EU’s good practice examples. With a female employment rate of 71.9% for those aged 15–64 years, Denmark exceeds by far the EU’s female employment target of 60% by 2010. Relatively few European countries – mostly the Nordic countries – have such a high number of women in the workforce. However, women in the other Nordic countries, particularly mothers, are more likely to work part time than Danish mothers and European women in general. According to the 2005 EU Labour Force Survey results (136Kb PDF) published by Eurostat in the autumn of 2006, 23.3% of Danish women aged 15–64 years work part time compared with 26.6% of women in Sweden, 29.7% in Iceland and 31.5% in Norway.

Moreover, within the area of education, Denmark is often regarded as having model policies. Like most European welfare states, a larger number of Danish women than men aged 25–64 years tend to participate in education or training. In 2005, 31% of Danish women in this age group participated in education or training compared with 39.7% of women in Sweden and 33.9% of women in the UK – the only two EU Member States with a higher number of female and male students than Denmark, according to the Eurostat Labour Force Survey. Denmark is also among the European countries with the most women in third-level education. In March 2006, a Eurostat news release (66.3Kb PDF) revealed that, in 2003, 57.9% of Danish women were enrolled as university students or in equivalent courses compared with the EU25 average of 54.6%.

However, the relative success within the area of female employment and education in Denmark is not matched by equal pay and representation of women on company boards and committees.

Wide gender pay gaps and few women in leading posts

Women across Europe tend to be paid less than men, although statistics from the Eurostat survey show that they hold equivalent, if not higher, educational qualifications than men. Denmark is no exception and even belongs to the group of EU Member States with the highest gender pay gaps in Europe. The March 2006 Eurostat news release also reveals that, in 2004, Denmark recorded a gender pay gap of 17 percentage points, which was higher than the EU25 average of 15 percentage points and than that of most southern and eastern European Member States, where the gender pay gap was often less than 10 percentage points.

Furthermore, according to the Eurostat news release, the proportion of female managers is also relatively low in Denmark at 23% compared with the EU25 average of 32.1%. However, the 2005 survey shows that a large proportion of Danish women (45.2%) are employed in highly skilled, non-manual jobs.

A recent study on corporate board diversity (793Kb PDF), published in November 2006 by the Nordic Council, based on 500 case studies of the largest companies in Denmark, Norway and Sweden, confirms that Denmark lags behind the other Nordic countries in relation to female representation on company boards. In 2005, a total of 7.2% of women in Denmark were represented on corporate boards compared with 24.2% in Norway and 15.1% in Sweden.

Danish women are not only underrepresented in managerial posts in the private sector. A report revealing facts of gender equality (237Kb PDF), published by the Department of Gender Equality (Ligestillingsafdelingen) in December 2006, also reveals that the proportion of women in government roles fell from 43% in 2001 to only 26% in 2005, while the number of women working in local government remained unchanged at 27%. Once again, these figures confirm that Denmark is falling behind other European Member States in terms of the number of female managers and representatives on company boards, despite the fact that Denmark has one of Europe’s highest female employment rates and belongs to the countries where educational attainment is highest among women.

National initiatives to address pay gap

In 2006, in an effort to address the gender pay gap, the Danish government adopted a new law compelling private sector companies with at least 35 employees and with at least 10 female and 10 male employees carrying out similar job tasks to develop [gender-specific statistics on pay (in Danish, 711Kb PDF)](http://www.loli.dk/upload/loli/akurser/kurser 2007/ligeloen_vejledning_sa5_3.pdf). Legislation on gender-specific statistics on pay is already in place in the public sector and applies to all public institutions with at least three female and three male employees carrying out similar job functions.

The Danish government has no intention of following the Norwegian, Spanish and Swedish initiatives of introducing a law to address the low levels of women on company boards. In 2003, Norway introduced a new law stipulating that 40% of members on company boards must be women. In a similar move in 2006, just before leaving office, the former Swedish government also proposed a law on board diversity, similar to the Norwegian initiative for company boards and state-run boards, with the intention of bringing it into force in 2008.

Danish social partners have initiated different initiatives to increase the number of women on company boards and eliminate the gender pay gap. The Confederation of Danish Industries (Dansk Industri, DI) has, for instance, in collaboration with the Danish Centre for Information on Women and Gender (Center for information om kvinde- og k¢nsforskning, KVINFO), launched a database entitled Women on board (in Danish), which helps companies to find female candidates for their governing boards. Another initiative aimed at reducing the Danish gender pay gap is a tripartite project set up by the government, the Danish Confederation of Trade Unions (Landsorganisationen i Danmark, LO) and the Confederation of Danish Employers (Dansk Arbejdsgiverforening, DA). On 12 February 2007, these parties published guidelines (in Danish) for good practice on equal pay.

Reaction of social partners

The social partners have shown mixed reactions to the new law on gender-specific statistics on pay and the Norwegian, Spanish and Swedish initiatives on regulating gender equality on company boards. LO and the Confederation of Salaried Employees and Civil Servants in Denmark (Funktionærernes og Tjenestemændenes Fællesråd, FTF) welcome the law on gender-specific statistics on pay, but call for more extensive rules, as the law excludes two thirds of the labour market.

Employer organisations are also critical of the new law. DA has argued that the law creates unnecessary red tape for employers, as the gender-specific statistics on pay will be unable to paint a clear picture of the gender pay gap and the underlying factors influencing wage differences.

The Danish trade unions and employer organisations oppose the idea of regulating female representation on company boards through legislation, as they argue that women need to be elected as managers or board members based on their qualifications and not on their gender. Instead of legislation, the Danish Association of Managers and Executives (Ledernes Hovedorganisation, Lederne) calls for further research to examine the reasons why women fail to reach managerial positions. However, Lederne did not deny that, if Denmark continues to fall behind the rest of Europe in this regard and if the Norwegian initiative turns out to be a success over the next three years, it may have to accept the necessity of legislation on female representation on company boards.

DI, the largest Danish employer organisation, opposes any form of political interference and obligation regarding the representation of women on company boards. DI also argues that more women, in general, need to inform their employer if they are interested in a board member position, while company boards, on the other hand, need to adopt a more innovative approach and employ more women in managerial positions.

Commentary

Denmark’s extensive and highly qualified female workforce, contrasted with the relatively low level of women in managerial positions and a wide gender pay gap, imply that the country is losing out in one way or another. However, the current debate indicates that the government and social partners have, to some extent, started to address the problems related to the wide gender pay gap and the issue of fewer women on company boards.

Trine P. Larsen, FAOS