In an 11 February 2021 plenary session aimed at assessing the progress made in women’s rights over the past 25 years, as well as the challenges still ahead, MEPs called on EU member states to move forward with the Women on Boards Directive, which has been blocked by the European Council in recent years.
The European Commission’s proposed directive from November 2012 set a minimum requirement of 40% of non-executive directors of the under-represented gender on company boards. Under the proposals, member states would require companies to issue annual reports on the composition of their boards and impose sanctions in the event of negative evaluations.
Companies failing to reach the target would be required to explain what measures they were taking to comply with the directive. A timeline for compliance was set at 2020 for the private sector and by 2018 for public-sector companies.
Backing the key objectives for listed companies in November 2013, the European Parliament called for stronger penalties, such as exclusion from public tenders for companies that fail to introduce transparent appointment procedures.
Only in Finland, France, Germany, Italy, and Sweden do women account for more than 33% of board members
Despite broad consensus across the EU in favour of improving the gender balance on company boards, progress on the directive has stalled in the Council. Several member states prefer either national measures or non-binding EU measures to pursue the proposed directive’s goals.
Austria, Belgium, France, Germany, Italy, and Portugal have legislated gender quotas for boardrooms, while a further 11 member states have legislated quotas, but restricted to state-owned companies.
Only in Finland, France, Germany, Italy, and Sweden do women account for more than 33% of board members. France remains the only EU member state with at least 40% of each gender on the boards covered by its domestic legislation.
Domestic legislation is largely credited with the average number of women board members on publicly listed EU companies almost doubling from 11.9% to 21.2% between 2010 and 2015. However, the rate of increase has slowed in the following five years and as of 2020, it stands at 28.8% of the largest listed companies across the 27 EU member states.
Moreover, the majority of companies that have successfully demonstrated improved diversity at board level are concentrated in a handful of member states and the rise of women in boardrooms has not translated into more women in executive roles, with only 7.5% of board chairs and 7.7% of CEOs being women.
MEPs are now pushing for EU targets, action plans, timelines, and temporary special measures to move towards a balanced representation in company decision-making. MEPs also stressed the need to increase pay transparency, which they say would help close the gender gap.
A survey conducted between November and December 2020 found that 42% of respondent EU citizens believe equality between men and women remains a core value the European Parliament should defend.