Last week saw the European Parliament's Women's Committee hold a hearing on the upcoming Women on Boards Directive.
Proposed in 2012 by Viviane Reding, the then Vice President and Commissioner for Justice, Fundamental Rights and Citizenship had to battle vigorously in order to get this proposal on to the agenda.
A forward-thinking strategy to tackle gender inequality in business leadership has been long overdue. This Directive will see a target of a 40% presence of the under-represented sex among non-executive directors of companies listed on stock exchanges.
Companies with less than 40% will need to make appointments to their boards or face appropriate sanctions. The Commission has expressed that these appointments must be made on the basis of a comparative analysis of the qualifications of each candidate.
The latest figures published in October 2015 illustrate that the EU average of women's representation in these roles is 21.2%. While this is an overall EU-wide improvement, progress is still very uneven among Member States. Amongst front runners such as Sweden, Denmark and Germany, the UK is holding its own above average at 25%. At the other end of the scale, Malta brings up the rear with a mere 2.5%.
This news in the UK is positive, but there is still a long way to go until more gender equality is achieved. While Cameron might declare his intention to boost women in board rooms, the UK to date under his watch has insisted on a voluntary, business-led approach. This lack of quotas means that progress is slow and women are still under-represented – without legislation, it is estimated that the EU will take around 40 years to reach at least 40% of both sexes on boards. We can't afford to continue at this snail's pace.
Perhaps the strongest case to be made on the topic, and perhaps the biggest perk enjoyed by companies who implement a gender-equal board – is one of an economic nature. An increasing amount of studies illustrate that gender-balanced boards are potentially able to raise the financial performance of businesses.
A gender equal board allows for a diversity of opinions, a varied mind-set and potentially a better handling of risk. The Commission estimates that women are responsible for around 70% of world-wide spending decisions. This means that having more women in higher decision-making roles is an accurate reflection of the market.
In addition, a more gender-equal board has been seen in studies to increase a company’s ethics and business code of conduct. Women represent a strong moral voice in business, and quotas represent a chance to not only level the playing field but move business towards more responsible practices.
Earlier in the year we in the FEMM Committee (as well as across the whole of the S&D and Labour delegation) were disheartened by the Council’s blocking of the Maternity Leave Directive, leading to a subsequent withdrawal of the legislation by the Commission.
Since the Women On Boards directive has been proposed in 2012, there have been worrying rumours of more stalemate in the Council. It is safe to say that the Council of Europe do not have a good track record on issues of gender equality.
With so many new challenges and opportunities facing British businesses, we cannot afford to miss out on the talent and experience of half the population. We need to continue pushing for an agreement in the Council of Europe and not let the progress that is being made stall or start to recede.
At the upcoming meeting of Europe's employment ministers the UK Government is in a prime position to lead a discussion. The Government should stop blocking the introduction of mandatory targets to improve the gender balance on company boards. We should move towards empowering more women at the top of business and start to redefine the male dominated culture in big business.