Too few women in leadership positions across the EU

A new report from the European Commission looks at the number of women in leadership positions in the European Union. While the Commission points to the evidence that more women are reaching top positions, it underlines the fact that more needs to be done to tackle a significant disparity across EU Member States. It says the under-representation of women in corporate decision-making represents a significant economic cost to companies and to the economy as a whole. Regulation at EU level may be the only way to solve the problem.

Background

The European Commission (EC) has published a report, Women and men in leadership positions in the European Union 2013 (1.26 MB PDF). Drawing on data up to the end of June 2013, it reviews the current situation and reports on recent progress.

The report notes that equality between women and men is a fundamental principle of the European Union (EU) and one of its main objectives. However, despite good progress over the past few decades, gender inequalities in leadership positions remain and the pace of change in some Member States is relatively slow. The EC has made gender equality in decision-making one of five priority areas in the Commission’s Women’s Charter (20.3 KB PDF) and the EU’s Strategy for Equality between Women and Men 2010–2015 (55.6 KB PDF).

Content of report

The report contributes to the debate by providing data on the proportions of women and men in leadership positions in the EU. It focuses on participation on the boards of major public companies, the composition of governments and elected assemblies in Member States and EU institutions, the gender balance in public administrations and in the judiciary.

It states that it is, as far as possible, based on quantitative analysis, with the majority of data drawn from the European Commission database on women and men in decision-making positions. The information includes comparable data for EU Member States from 2003 onwards. Where relevant, 2003 is used as the starting point for analysis of developments over the following ten years.

The report was compiled and all data collected before the accession of Croatia on 1 July 2013. This means that all EU aggregates refer to the EU27 and, where relevant, data for Croatia are grouped with those for other countries from outside the EU.

Participation on company boards

The report notes that many Member States have taken positive steps to promote gender equality on company boards, but progress is fragmented. This is why the Commission proposed in November 2012 to introduce a Directive on compulsory quotas for women on company boards (EU1211021I).

Overall, women account for 16.6% of board members in the largest publicly listed companies in the EU. The highest levels of female representation on boards are in Finland (29.1%) and Latvia (29%), followed by France (26.8%) and Sweden (26.5%). The Netherlands, Denmark, Germany and Slovenia are the only other EU Member States to have at least 20% women on boards.

In six Member States – Romania, Cyprus, Estonia, Greece, Portugal and Malta – women hold fewer than one in 10 positions on company boards.

The report states:

The fact that not one EU Member State is close to the EU’s 40% objective and that more than two thirds are not even halfway to meeting it, supports the case that binding measures are crucial to bring about effective change. Indeed, of the 33 European countries covered by the Commission database, the only two that have achieved gender balanced boards are Iceland and Norway, both of which have adopted legislative quotas.

The report acknowledges, however, that women were better represented in non-executive positions, accounting for 17.6% of non-executive directors in the EU.

Progress to date

There has been overall progress in recent years. In April 2013, 77% of companies had at least one woman on their board and 48% had more than one, compared to the 2010 figures of 66% and 34% respectively.

Nevertheless, the report also reveals that there are still very few large companies with a female Chair or Chief Executive Officer. Of the 587 EU companies covered by the Commission database, only 26 are chaired by a woman (4.4%) and only 16 (2.7%) have a female CEO.

In 14 EU Member States, no companies in the sample have a female chair and a similar number (though not the same countries) have no companies with a female CEO.

Economic cost of under-representation

The report concludes that:

…the under-representation of women in corporate decision-making represents a significant economic cost to companies and to the economy as a whole, this at a time when Europe needs to fully exploit the talents of all parts of the workforce in order to ensure growth and ensure competitiveness.

It notes further that the Commission remains committed to monitoring progress and supporting Member States in their efforts to bring about change. In particular, it is counting on support from the European Parliament and Member States to adopt its 2012 proposal for a Directive to improve gender balance on boards.

The Commission states its belief that the proposal is balanced, leaving companies with the necessary flexibility to make their appointment decisions, while at the same time pushing them to consider a wider base of candidates.

Andrea Broughton, Institute for Employment Studies