The gender imbalance on EU corporate boards

A recent European Commission report[1] highlights the limited progress made one year after EU Commissioner for Justice, Fundamental Rights and Citizenship, Viviane Reding, called for publicly listed companies to voluntarily increase women’s presence on corporate boards[2].

The EU’s response has been the launch of an EU public consultation seeking views on possible action at EU level, including legislative initiatives, to improve the gender balance in the boards of companies listed on stock exchanges. The consultation will be open until 28 May 2012 and the Commission will take a decision on further action later this year. The proposals will eventually change the corporate landscape (in my view for the better), and solicitors should take the time to review the key initiatives of other member states– summarised below – to ensure that they are best prepared to advise their corporate clients.

The call for action in 2011 sparked an EU wide dialogue on the issue, and it is fascinating to review the action (or inaction in many cases) of member states. Several countries– specifically France, the Netherlands, Italy and Belgium – enacted legislation aimed at improving the gender balance on company boards.

The EU report sets out the many advantages of having more gender diversity on boards, and underscores some shocking statistics which highlight that in some member states the pace of change is moving at the speed of a snail with a broken shell:

  • Of around 600 of the largest companies listed in the EU, the number of women occupying the position of chairperson or president has fallen (albeit slightly) from 20 in October 2011, to a paltry 19 in January 2012 – just 3.2%
  • Women make up 27% of boards in the largest Finnish companies, but only 3% in Malta;
  • The proportion of women on the boards of French companies in the CAC 40 index in January 2012 increased by 10 percentage points to 22.3%;
  • In Romania, Hungary and Slovakia, the proportion of women on boards declined;
  • In January 2012 the average number of female board members in the largest companies in the EU was a mere 13.7 %.

Initiatives taken by Member states

The initiatives taken by EU member states can be divided into legislative measures, and voluntary initiatives (which include corporate governance codes, charters, training, mentoring and networking programmes).

France, Italy and Belgium have enacted fully-fledged quota legislation for company boards that include varying degrees of sanctions, following the pioneering example of Norway which has seen rapid progress since issuing a voluntary “target” of 40% representation of both genders among board members way back in December 2003. Those targets became obligatory in January 2006.


Under the new law[3] in France companies will have to ensure that members of each sex occupy at least 20 % of boardroom seats by 2014 and 40 % by 2017. These requirements apply to companies listed on the stock exchange and non-listed companies with at least 500 workers and with revenues of over €50 million over the previous three consecutive years. The new law does have some bite in that non-compliant companies face nullification of their board elections; although the decisions adopted by the board remain valid


The new laws[4] in Italy are applicable to companies listed on the stock-exchange and state-owned companies, and provide for at least one-third representation of each sex among members of the management board and the supervisory board by 2015.

For listed companies the enforcement of the rules is ensured by the National Securities and Exchange Commission which will apply progressively the following sanctions in case of non-compliance:

  • a warning to apply the quota system within four months; followed by,
  • a fine from €100,000 to €1,000,000 (from €20,000 to €200,000 in the case of supervisory boards) together with a second warning that the quota system be accomplished within three months; followed by,
  • forfeiture of the offices of elected members of the board which does not comply with the quota.

The Netherlands

The Netherlands has passed soft, I would say toothless, legislation which is not binding or tied to any sanctions of significance. The amended Civil Code obliges public limited companies and private limited companies to strive for a balanced representation (defined as having at least 30 % representation of each sex) on the company’s management board and on the supervisory board.

If a larger company does not reach at least 30 % of each sex on its board, it must explain in the annual report to the shareholders why the balanced representation has not been achieved, which measures have been taken to achieve it and what measures the company plans to introduce to achieve it in the future – commonly referred to as the ‘comply or explain’ mechanism. There are no sanctions for not reaching the 30 % norm. The Netherlands has also introduced a separate charter, “Talent to the Top”, which requires companies to establish quantitative goals for the representation of women in senior management measure their achievement and report annually.

In Austria, Belgium, Denmark, Finland, France, Germany, Luxembourg, the Netherlands, Poland, Spain, Sweden and the UK, the national corporate governance codes[5] encourage, to a different extent, gender diversity on company boards.

Are we doing enough in the UK?

In the UK the headhunting industry agreed a voluntary code on diversity, launched in July 2011, which lays out specific steps for search firms to follow across the search process. The voluntary code is being promoted, and reviewed, by the excellent 30 % Club[6]. In addition the “FTSE 100 Cross-Company Mentoring Scheme” has been designed to support board membership of senior female managers.

Clearly there is much more work that needs to be done in the UK and across the EU as a whole to encourage greater gender diversity on corporate boards, if there is any chance of cracking the glass ceiling.  I would encourage all members of the legal profession (including in house counsel) to get involved in the EU consultation.

Philip Henson

[1] Women in economic decision-making in the EU: A progress report

[2] Women on Board Pledge for Europe

[3] Loi ° 2011-103 du 27 janvier 2011 relative à la représentation équilibrée des femmes et des hommes au sein des conseils d’administration et de surveillance et à l’égalité professionnelle publiée au Journal Officiel du 28 janvier 2011.

[4] Law 120, 12 July 2011


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