Women still underrepresented in top jobs in companies

Women holding top-level positions continue to be scarce in Austria’s largest establishments, accounting for only 5%–6% of top management positions, according to a Chamber of Labour (AK) study conducted in February 2010. As a consequence, AK is demanding tighter legal regulations to increase substantially the proportion of women on companies’ management and supervisory boards, including a quota system; however, employers are opposed to these plans.

A study (Frauen in Geschäftsführung und Aufsichtsrat (210Kb PDF)) carried out by the Vienna Chamber of Labour (Arbeiterkammer Wien, AK Wien) looked at the proportion of women on the governing bodies of Austria’s largest enterprises, as of February 2010. The study covers the country’s 200 largest joint-stock and private limited companies, including all of the companies quoted on the Vienna Stock Exchange (Wiener Börse). It underlines the continuing predominance of men within the companies’ governing bodies, although the persisting substantial gender imbalances have slightly alleviated during the past few years (see also AT0511201N).

Study findings

In about one third of the companies examined, management and supervisory boards are composed exclusively of men. In only 18 of the 200 largest companies, at least one woman is represented in both management and supervisory boards. Only 33 out of 627 (5.3%) management board members are women, while 141 out of the 1,454 (9.7%) mandates for the supervisory boards are held by women. Strikingly, of these 141 female supervisory board members, more than half (79) are mandated by the respective works councils – even though workplace representation bodies have been established in only about three quarters of the companies and, where they exist, they may hold only one third of the company’s supervisory board mandates at most.

In contrast, employer representatives assign only 6% of the supervisory board mandates to women. This means that it is the employee representatives rather than the employer side who essentially contribute to gender diversity in the supervisory boards of the country’s largest enterprises. Looking only at the companies that are listed on the Vienna Stock Exchange, women’s top-level representation tends to be even lower: only 4.7% and 3% of the top management positions among all of the companies listed and among those quoted on the prime market, respectively, are held by women. The respective figures for the supervisory boards are 7.8% and 7%, and thus lie clearly below the corresponding averages of all top 200 companies.

European standards

By European standards, this exclusion of women from many governing bodies of the country’s establishments is quite pronounced in Austria. Whereas in many other European countries, the proportion of women in these bodies has increased significantly during the past few years, Austria still belongs to the group of countries where the proportion of women occupying such positions is below 10%. Countries such as Denmark, Finland, Norway, Spain and Sweden have either set up a binding regulatory framework – this is the case in Norway and, with regard to enterprises with at least partial state ownership, also in Denmark and Finland – or at least introduced tight guidelines for reserving a minimum share of mandates for women.

Norway is particularly noteworthy in this respect, with legislation committing companies listed on the Norwegian stock exchange to reserve at least 40% of the mandates for governing bodies for women. In 2009, women’s share of governing body positions stood at 42% on average. By contrast, in countries with no or only ineffective regulation concerning positive action with regard to women’s participation in business positions, the proportion of women within the establishments’ governing bodies has remained very low. Aside from Austria, this holds true, in particular, of Belgium, Greece, Ireland, Italy, Luxembourg and Portugal, where the proportion of women on supervisory boards and similar bodies is below 10%.

AK demands

Against the background of such discrimination against women in Austria, AK – in line with the Austrian Trade Union Federation (Österreichischer Gewerkschaftsbund, ÖGB) – is calling for a series of legal initiatives to increase significantly women’s share of executive and supervisory board positions. In particular, AK is demanding the following measures:

  • a legal provision should be introduced aiming to guarantee a minimum share of supervisory board mandates reserved for women, similar to the Norwegian legislation (see above). The legal implementation of this provision should be realised by amendments to both the Stock Corporation Act (Aktiengesetz) and the Limited Liability Companies’ Act (GmbH-Gesetz). AK proposes a transitional period of three years for implementation by the companies. At a first stage, all companies listed on the stock exchange should be covered, as well as enterprises of public interest and establishments owned by the state. Subsequently, all other large corporations should be subject to this legislation. In the case of non-compliance, sanctions should be imposed, in particular severe fines and an entry in the commercial register;
  • an immediate amendment should be made to the Austrian ‘Corporate Governance Code’ (AT0502204F), with the aim of achieving a balanced composition of the supervisory boards of the country’s establishments. The existing provisions, based on the principle of voluntary self-commitment, should be replaced by binding ‘comply or explain’ regulations, as are common in several other European countries. This rule means that, in the case of non-compliance with a quota provision, the failure of fulfilling the obligation has to be justified. The current significant underrepresentation of women within the governing bodies among the companies listed on the Vienna Stock Exchange indicates the ineffectiveness of the code in its present form;
  • a database of highly skilled women should be established to allocate them to top-level business positions. This database should be certified, publicly accessible and operated by an authority. It should list highly qualified women who have declared their availability for activities in relation to supervisory boards and who have been recommended by this authority. This database would provide a pool of competent women for companies when it comes to the appointment of supervisory board members. Thus far, organised business has always justified the substantial underrepresentation of women by pointing to an alleged shortage of appropriate female candidates.

Negative employer response

Although the Federal Minister for Women and Civil Service, Gabriele Heinisch-Hosek, has signalled her willingness to support the AK initiative, the Austrian Federal Economic Chamber (Wirtschaftskammer Österreich, WKO) and some individual employers have raised some objections. A legally binding obligation to meet a female staffing quota would be problematic for many companies, particularly in business branches where technical occupations prevail, WKO claims. Instead of threatening penalties for companies that often do not have the opportunity to recruit qualified female staff to top-level business positions, the responsible ministries should further improve the institutional framework for business women with regard to the reconciliation of family and working life, the chamber argues.

WKO believes that a carefully targeted promotion of individual business women would be far more promising than an abstract staffing quota. Given this adverse position of WKO towards the AK proposals, the latter appear to be unlikely to be realised in the foreseeable future. This is because, under Austria’s system of extensive social partnership, measures immediately involving the core interests of business normally need to be agreed by each of the two sides of industry before their adoption.

Georg Adam, Department of Industrial Sociology, University of Vienna

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