Equality: Viviane Reding outlined her move to have a minimum number of women serve on corporate boards of directors during the American Chamber of Commerce in Luxembourg International Women’s Day conference on Friday.
Photo: Charles Caratini
Reding, vice president of the European Commission and commissioner for justice and citizenship, noted that today there is an average of 14 percent women on company boards across the EU, up from 12 percent in 2010. Over the last year Luxembourg crawled up from third to second lowest proportion out of the EU 27.
Women “have the talent, have the training,” Reding said. “But there is this glass ceiling, and it is very well constructed and very well maintained. I think we should get rid of it.”
The Esch-sur-Alzette native first raised the issue of a gender quota in 2011. During her speech last week, she expressed disappointment with the business community’s self-regulatory efforts since that time. At the current pace “we will need decades to reach the goal” of 40 percent women board members that she would like to see. Reding observed that the biggest recent gains in female board participation have come in member states which have adopted a quota into national law, notably France, the Netherlands and Norway. “I don’t like quotas either, but I like what quotas do.”
Thus Reding issued a consultation paper in early March to prepare the groundwork for a new European directive. The process seeks to find the right quota number (probably between 20 and 50 percent), the scope of the rules (likely to include publicly traded companies and state-back enterprises), potential penalties (such as a ban on public sector contracts or freezing compensation for board members), and how long the regulation should remain in effect (perhaps five to eight years).
Acknowledging that board membership is only the visible “tip of the iceberg” when it comes to women’s equality, Reding nevertheless said she was pushing for quotas because “if I didn’t start somewhere, things wouldn’t go anywhere.”
She also said that a recent Eurobarometer poll found that 75 percent of Europeans agreed with the idea of creating such a quota, while business school research has shown a correlation between women on the board and improved profitably of listed firms.