Women on Board - The state of art of quotas regulation in Europe
Women on Board The state of art of quotas regula4on in Europe Isabella Lenarduzzi
JUMP www.jump.eu.com • JUMP oﬀers women prac4cal tools to help them realise their professional and personal aspira4ons • JUMP supports companies and organisa4ons that wish to promote beEer gender diversity within their management.
The gender Diversity Ecosystem by McKinsey and the correspondent JUMP ini4a4ves
Norway • Norway was the ﬁrst country in the world to implement board quotas • Numbers of women on corporate boards have risen from only 6% in 2002 to over 44% today. • "By not u(lising the full talent pool I knew Norway as a na(on was missing out. My ambi(on as a Minister was to force companies to rethink their board recrui:ng prac:ces. I believe we succeeded," Ansgar Gabrielsen (Former Minister of Trade) • “We have invested billions educa(ng our daughters as much as our sons,” Gabrielsen said. “Their ongoing exclusion from corporate boards, which are an important part of our society just doesn’t make economic sense”
Norway, the law • The law demands that public shareholder-‐owned corpora4ons (called ASAs in Norway) must have an average of at least 40% women and 40% men on their boards or face dissolu+on. • The law came into force in 2008 and related to 7,000 seats on boards. The compulsory percentage of gender diversity varies according to the number of seats concerned: 1 in 2 or 3 seats; 38% of 8 seats; and 40% of more than 8 seats.
Norway, the results • Posi+on: Only 3% of chairs are held by women. • Age: Women are younger than men on boards. The majority are less than 50. The older men on boards were not replaced by women but when recrui4ng new members they recruted women. • Educa+on: Women tend to be beEer educated than men. There are fewer of them with science and technology degrees but more with law degrees. • Experience: More women than men are managers in companies or come from academia but more men than women are business owners. • Recruitment: Women were recruited in the same manner as men, mostly through professional networks. The phenomena of the concentra4on of power and the so-‐called “golden skirts”, which deﬁnes a number of women who serve on several diﬀerent boards at the same 4me, is a very common idea. The research proved that golden skirts was a men’s wear with 62% holding only one board posi4on instead of 79% of Women!
Norway, the results • The more visible and skilled the women the more advantages they had. For example, as the research suggests, these women always choose the biggest companies. • Sixty percent of male board members said there had been no major changes to board opera+ons since the law took eﬀect but there were some improvements: “more discussions” and “new perspec+ves”. • Several top Norwegian business leaders said they were “opposed in principle” to quotas and s4ll are, but believed the law has been eﬀec4ve. Fears of not ﬁnding enough qualiﬁed women to ﬁll board seats proved unfounded. “I’m in principle against quotas,” said Harald Norvik, chairman of Telenor and former CEO of Statoil. “But I’m happy with the result,” he added.
Norway, the results Adverse consequences • Since the law on quota, the number of public-‐listed companies has fallen. The research highlighted that 33% of companies choosing not to list on the stock exchange did so to evade the quota regula4on. • Since the law was enforced, there has been no further debate on gender diversity in Norway but the balance is s4ll far oﬀ: the quota law did not change the number of women CEOs (2%) or their presence in the Execu4ve CommiEee (10%). The private limited companies that didn’t have to comply with the law saw an increase of women on their boards from 15% in 2004 to 17% in 2009!
France, the law • Law adopted in January 2011 • 2014 to get to 20% and 2018 to get to 40% of women • To be applied to large listed companies with more than 500 employees and more than 50 million € revenues • Penalty: no validity of board decisions • First results : from 8% in 2008 to 22% in 2012
Belgium, the law • Law adopted 30 June 2011 • 30% to be reached for each sex in … -‐ One year for public owned companies -‐ Six years for listed companies -‐ Eight years for SMEs • Penalty : no revenues of any kind for board members
Ini4a4ves With the legisla4on on equality in Belgium, the propor4on of women in parliaments has risen more than 20% in ten years
Italy, the law • The law was adopted on the 29th of June 2011 • Objec4ve : 20% from 2012 and 33% from 2015 • Only for listed companies • Penalty : several steps from warning to ﬁnancial sanc4on (up to 1 million€) and decay from boards
Netherlands, the law • The law was adopted in May 2011 • First to be implemented in both boards and exec – 30% of women • Validity of 3 years (2012 – 2015)! • No penalty – only explana4on of eﬀorts undertaken
Spain, the law • Law adopted in 2007 • Objec4ve of 40% of each sex by 2015 • No penalty – but taken into account for public subsidies or state administra4on contract • Results: 4% in 2006 to 11% in 2010
The European Commission • 14% of board members at Europe’s top ﬁrms are women, up from 11.8% in 2010. • «Ce qui compte pour moi, c’est le résultat. Mon objec+f est de porter la présence des femmes au sein des conseils d’entreprises des principales sociétés cotées en bourse en Europe à 30 % d’ici à 2015 et à 40 % d’ici à 2020.» • Failure of the charter for corporate commitment • 9 countries are opposed to the ini4a4ve (UK and Nl) + Germany
Conclusions (2) 5. Mid-‐term targets help to meet long-‐term goals 6. Progress towards equal representa4on for women and men is slower for execu4ve board posi4ons 7. Quota legisla4on does not increase the number of female CEOs 8. Awareness raising and promo4ng women help reaching targets
Conclusions 1. Interven4on makes a diﬀerence in progressing towards equality on boards 2. Self regula4on builds ground for legisla4on 3. Quota legisla4on is most eﬀec4ve when endorsed by sanc4ons 4. Eﬀec4ve self-‐regula4on requires targets, deadlines and state-‐endorsed monitoring
Quotas are not a scandal – what is a shame is that we need it!
Conclusion Women’s energy and talent are the most untapped renewable sources of energy in the world!
Isabella Lenarduzzi Founder and Managing Director of JUMP firstname.lastname@example.org +32 3 346 32 00 email@example.com jump.eu.com www.jump.eu.com