EU pushing for more women on company boards

BRUSSELS – The European Union is moving closer to introducing mandatory quotas for the number of women on company boards after businesses failed to make sufficient progress in gender equality over the past year.

The EU’s justice commissioner, Viviane Reding, said Monday that at the current rate it would take more than 40 years for women to hold 40 percent of board positions in Europe’s publicly traded companies.

“One year ago, I asked companies to voluntarily increase women’s presence on corporate boards,” Reding said. “However, I regret to see that despite our calls, self-regulation so far has not brought about satisfactory results.”

The European Commission, the EU’s executive arm, said that over the past 12 months only 24 companies had signed a pledge to ensure that 30 percent of their board positions are held by women by 2015. By 2020, that figure should increase to 40 percent.

At the moment, less than 14 percent of board members at Europe’s biggest companies are women, the commission said. That’s up only slightly from just under 12 percent in 2010. The percentage of women chairing major European companies even fell slightly over the past two years, to 3.2 percent from 3.4 percent in January 2010.

The commission says the low presence of women in decision-making positions in big companies not only is a sign of gender inequality, but also hurts companies’ results.

“Women do not mean cost for companies. Women mean a benefit. Women mean business,” Reding said, citing studies that firms with equal representation of women on their boards had 56 percent higher operating profit compared with companies with all-male boards.

The commission is now asking companies and citizens whether they believe quotas are necessary, as well as what targets and potential sanctions should be set. It said legislation on gender equality – including quotas – could come later this year based on that consultation.