March 5, 2012

EU May Legislate More Women on Boards

Justice chief 'disappointed' in lack of appointments

A year after European Union justice chief Viviane Reding warned European companies that the level of representation by women on their boards was unacceptable, she may press for legislation to compel action. She said that she was disappointed in their lack of progress.

Bloomberg reported Monday that Reding had set a deadline of March 2012 for companies to boost the number of women on their boards from a 2010 level of 12%–only 3% serving as board chairs–to 30% in 2015 and 40% by 2020. If companies failed to take action, she had warned that legislation could be drafted to compel them to do so.

She was quoted saying, “I have been very disappointed because there have been a lot of nice words and very few deeds … the companies last year told me ‘we will do that by ourselves.’”

Only 24 companies even signed the pledge to increase female representation on their boards, despite the fact that Spain has a 2015 target of 40% and France passed a law to require 20% female presence on boards by 2014 and 40% by 2017 for companies employing at least 500 people and with annual sales of 50 million euros ($66 million).

In February, U.K. Prime Minister David Cameron warned that British companies could face quotas as well. He said that businesses without sufficient women in senior positions are “failing” the economy.

Non-EU member Norway had set a quota in 2003 to have at least 40% of its corporate board seats populated by women; 37.9% of directors at its biggest companies are women, and, of the total of 4,875 board seats from 334 of the largest European companies, they constitute 11.7% of directors. According to an October 2010 study that was conducted by headhunting firm Russell Reynolds Associates and the European Professional Women’s Network, that is an increase of 21% since 2008.

The U.S. is actually falling behind in female representation. In 2010, according to a Bloomberg Rankings analysis, women made up 16.6% of board seats on S&P 500 companies; in 2011 that percentage fell to 16%.

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