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Women on Boards – We might have won a battle, but the war is still on

Women on Boards – We might have won a battle, but the war is still on DonkeyHotey

In her 2011 hit, Beyonce proclaimed that 'girls run the world.' Though I might dance enthusiastically to the song, I beg to differ with Queen B. 

 

Today, women may account for 60 percent of new university graduates and the female employment rate may have risen to 62 percent, but very few women make it to the top of the professional pyramid. In fact, only 16.6 percent of board members in Europe are female. This concerning fact led to a European Commission legislative proposal, designed to increase the participation of women on boards. After months of consultations, on November 20 the European Parliament finally, and overwhelmingly, voted in favour (459 for, 148 against, and 81 abstentions) of the proposal: A small victory for gender equality.

 

Viviane Reding, the Vice President of the European Commission and Commissioner for Justice, has voiced her opinion about quotas on several occasions, stating, "I don't like quotas but I like what they do." Taking this into account, then, what does the Commission's new law prescribe?

 

First, the Commission is not trying to introduce a quantitative quota, as in Germany, where an agreement between Germany’s largest political parties has specified that 30 percent of board members in each company must consist of women by 2016. Instead, it ensures the implementation of a revised selection procedure for the supervisory boards of publically listed enterprises. The Commission is clearly confident that change will take place as the measure is only temporary – it will expire in 2028.

 

Second, though the proposal excludes small and medium enterprises (SMEs), it does try to incentivize companies to improve their gender balance, essentially working on the principle that diversity in a company contributes to increased performance since a broader spectrum of ideas can be introduced in the decision making process. After all, a McKinsey & Company study has shown that there is a positive correlation between higher stock price growth and higher return on equity for companies with a high share of women on their boards. Positive trend or coincidence? I would argue for the former.

 

Third, the Parliament decided to strengthen the Commission's proposal and added provisions on implementing obligatory sanctions for all companies who fail to include more women in their board of directors.

 

These three points form the basis of the proposal. Two further issues also bear mentioning, however. No woman should be parachuted to a top-level position just because of the mere fact that she is a woman; this would only act to re-enforce existing prejudices. To tackle this problem, the Commission suggests the implementation of a 'flexi quota': if merit favours a man over a woman then the man should get the position.

 

Furthermore, the rise to the top of more 'golden skirts' – an elite group of women who become members of the boards of many companies, not leaving any space for new recruits – is to be avoided. The proposal should be perceived more as a stepping-stone towards creating an internal mobility mechanism rather than a compulsory measure.

 

In times of crisis, compounded by an ageing European population, companies cannot afford to under-utilize the pool of talented women they have in their ranks. Yet if companies are to have competitive candidates for top positions, as the Commission’s proposal mandates, they will need to develop mechanisms to support such women. For example, women are more likely to have more gaps in their careers than men. It is thus important for women currently in top managerial positions to share their experiences and advise boards on how to help women come back into the work force, through things like the provision of training and the implementation of flexible working hours.

 

Furthermore, it is imperative that successful businesswomen assume their role as mentors for their young colleagues. Sharing tips and wisdom could very well be the most inspirational step in encouraging an ambitious young woman to rise to the top of her company. Mentoring schemes can become a platform for creative problem solving. Mentors and their protégés can take mistakes and best practices from the past and translate them into innovative ideas that will both boost female participation in the company and will improve the work environment for all employees.

 

At the same time, the Commission’s proposal has the potential to instigate a change in cultural attitudes towards women in leadership roles, both for women and men. Unfortunately, in some cases men remain sceptical of their female colleagues' abilities to lead.  It should not be expected that a woman in a managerial position will need to ‘man up’. Diversity in outlooks on issues appears to be the recipe for success in the business world.

 

As for women, as Facebook COO Sheryl Sandberg mentioned in her famous TED speech the problem comes from how they perceive their abilities and how much they value their aspirations. The more women feature on boards of directors, the more that should inspire young professionals: Everyone has the right to chase their professional dreams.

 

The European Union has always been determined to challenge the status quo when it comes to women’s participation in the business world. And once more, its decision may trigger a positive domino effect for working women across Europe. However, nothing is finalized yet. Despite the European Parliament voting in favour of the proposed law, Member States in the European Council have yet to approve it. Only then will the law reach the EU statute book and be transposed into national legislation.

 

Many claim that in the case of quotas the road to hell is paved with good intentions. However, as Richard Pascale very accurately pointed out, "Adults are more likely to act their way into a new way of thinking than to think their way into a new way of acting." The European Commission’s proposal may not be a panacea for equal gender participation but if utilized well – first and foremost by women – it will most definitely upgrade gender balance in the industry and will boost companies’ competitiveness. In the meantime, Beyonce’s lyrics could still work as morning inspiration.

 

Ilektra is a trainee at the European Commission's Directorate for Justice where she works for the Communications team.

Women on Boards – We might have won a battle, but the war is still on.
By Ilektra Tsakalidou

In her 2011 hit, Beyonce proclaimed that 'girls run the world.' Though I might dance enthusiastically to the song, I beg to differ with Queen B. 

Today, women may account for 60 percent of new university graduates and the female employment rate may have risen to 62 percent, but very few women make it to the top of the professional pyramid. In fact, only 16.6 percent of board members in Europe are female. This concerning fact led to a European Commission legislative proposal, designed to increase the participation of women on boards. After months of consultations, on November 20 the European Parliament finally, and overwhelmingly, voted in favour (459 for, 148 against, and 81 abstentions) of the proposal: A small victory for gender equality.

Viviane Reding, the Vice President of the European Commission and Commissioner for Justice, has voiced her opinion about quotas on several occasions, stating, "I don't like quotas but I like what they do." Taking this into account, then, what does the Commission's new law prescribe?

First, the Commission is not trying to introduce a quantitative quota, as in Germany, where an agreement between Germany’s largest political parties has specified that 30 percent of board members in each company must consist of women by 2016. Instead, it ensures the implementation of a revised selection procedure for the supervisory boards of publically listed enterprises. The Commission is clearly confident that change will take place as the measure is only temporary – it will expire in 2028.

Second, though the proposal excludes small and medium enterprises (SMEs), it does try to incentivize companies to improve their gender balance, essentially working on the principle that diversity in a company contributes to increased performance since a broader spectrum of ideas can be introduced in the decision making process. After all, a McKinsey & Company study has shown that there is a positive correlation between higher stock price growth and higher return on equity for companies with a high share of women on their boards. Positive trend or coincidence? I would argue for the former.

Third, the Parliament decided to strengthen the Commission's proposal and added provisions on implementing obligatory sanctions for all companies who fail to include more women in their board of directors.

These three points form the basis of the proposal. Two further issues also bear mentioning, however. No woman should be parachuted to a top-level position just because of the mere fact that she is a woman; this would only act to re-enforce existing prejudices. To tackle this problem, the Commission suggests the implementation of a 'flexi quota': if merit favours a man over a woman then the man should get the position.

Furthermore, the rise to the top of more 'golden skirts' – an elite group of women who become members of the boards of many companies, not leaving any space for new recruits – is to be avoided. The proposal should be perceived more as a stepping-stone towards creating an internal mobility mechanism rather than a compulsory measure.

In times of crisis, compounded by an ageing European population, companies cannot afford to under-utilize the pool of talented women they have in their ranks. Yet if companies are to have competitive candidates for top positions, as the Commission’s proposal mandates, they will need to develop mechanisms to support such women. For example, women are more likely to have more gaps in their careers than men. It is thus important for women currently in top managerial positions to share their experiences and advise boards on how to help women come back into the work force, through things like the provision of training and the implementation of flexible working hours.

Furthermore, it is imperative that successful businesswomen assume their role as mentors for their young colleagues. Sharing tips and wisdom could very well be the most inspirational step in encouraging an ambitious young woman to rise to the top of her company. Mentoring schemes can become a platform for creative problem solving. Mentors and their protégés can take mistakes and best practices from the past and translate them into innovative ideas that will both boost female participation in the company and will improve the work environment for all employees.

At the same time, the Commission’s proposal has the potential to instigate a change in cultural attitudes towards women in leadership roles, both for women and men. Unfortunately, in some cases men remain sceptical of their female colleagues' abilities to lead.  It should not be expected that a woman in a managerial position will need to ‘man up’. Diversity in outlooks on issues appears to be the recipe for success in the business world.

As for women, as Facebook COO Sheryl Sandberg mentioned in her famous TED speech (http://www.youtube.com/watch?v=18uDutylDa4) the problem comes from how they perceive their abilities and how much they value their aspirations. The more women feature on boards of directors, the more that should inspire young professionals: Everyone has the right to chase their professional dreams.

The European Union has always been determined to challenge the status quo when it comes to women’s participation in the business world. And once more, its decision may trigger a positive domino effect for working women across Europe. However, nothing is finalized yet. Despite the European Parliament voting in favour of the proposed law, Member States in the European Council have yet to approve it. Only then will the law reach the EU statute book and be transposed into national legislation.

Many claim that in the case of quotas the road to hell is paved with good intentions. However, as Richard Pascale very accurately pointed out, "Adults are more likely to act their way into a new way of thinking than to think their way into a new way of acting." The European Commission’s proposal may not be a panacea for equal gender participation but if utilized well – first and foremost by women – it will most definitely upgrade gender balance in the industry and will boost companies’ competitiveness. In the meantime, Beyonce’s lyrics could still work as morning inspiration.

Ilektra is a trainee at the European Commission's Directorate for Justice where she works for the Communications team.

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