DECEMBER 2020

SPOTLIGHT ON
PUBLIC POLICYITALY
THE GENDER PARITY LAW
The gender balance on boards in Italy has been under scrutiny for thepast decade. In 2011, the Gender Parity Law1 was passed to push for
greater representation of women on boards. The purpose behind thelaw was to remove barriers that hinder women’s career advancement.
Law No. 120 of 12 July 2011 mandated a quota for gender diversity
on the board of directors and board of statutory auditors of publiccompanies. The law required companies to gradually increase theportion of the under-represented gender on their boards for up tothree consecutive renewals of the board.
The Gender Parity Law has had a major impact on board compositionsof public companies in Italy, dramatically increasing women’s representation on boards.

KEY FEATURES OF THE GENDER PARIT Y L AW•

The Gender Parity Law of 2011 mandated a temporary and gradual quota for gender diversity on publiccompanies in Italy.

•The law required quotas for three consecutive board
renewal terms, with a 20 per cent quota for the underrepresented gender for the first renewal and 33 percent for the second and third ones.

•A new law in force from 14 October 2020 has extended the period to six consecutive renewals andtightened the quota to 40 per cent for the less represented gender.

•The Italian companies and exchange commission
also issued recommendations to help companies implement the law, including policy tools and guidelines.

SPOTLIGHT ON PUBLIC POLICY • ITALY | 1

OVERVIEW
The law applied to public companies traded on the Italian Stock
Exchange, EU stock markets and Italian state-owned enterprises.
It required the first board renewal subsequent to the passage of theact to have a 20 per cent quota for the under-represented gender,
while the second and third renewals should have a 33 per cent quota.
These quotas apply both to the portion of the new members entering
the boards for each of the renewals, as well as to the entire composition of the board. Companies were to implement the quota a year
from the enactment of the law, in August 2012.
With boards renewed every three years, companies that applied thelaw in 2012 were to implement it until 2021. Law 58/1998 that cameinto force on 14 October 2020 has now extended the renewal period
to six consecutive times with a new quota of two-fifths.2

There are sanctions for companies that fail to comply with the law.
If companies fail to comply within the first four months of notification,
they will be issued a warning by Consob, Italy’s companies and exchange commission. Failure to comply with the warning can result infines ranging from €200,000 to €1,000,000, with another three-monthwarning to comply. If companies still fail to comply, their boards of directors and statutory boards elections can be declared null and void.3The Borsa Italiana S.p.A., the Italian Stock Exchange, also modified
the Corporate Governance Code for public companies in July 2018
to recommend that companies apply gender diversity to the boardof directors and board of statutory auditors and suggested a one-third
quota of the under-represented gender on boards on a voluntarybasis to promote the principle behind the Gender Parity Law.4

Consob also issued regulations on 8 February 2012 directing companies to change theirbylaws to specify and include the following:••

The criteria used for identifying candidates••Procedures for replacing members when their seats become vacant.

Slates of candidates for the board of directors and board of statutory auditors, with no slates with fewer than three candidates
to ensure gender parity.
Procedures for making appointments in such a way that the principle of gender balance is not lost.

IMPACT
Before the Gender Parity Law was enacted, Italy had extremely low
numbers of women represented on boards; it was among the lowest
in the European Union.5 In 2008, the overall ratio of women on boards
was 5.9 per cent. 6 This has changed dramatically since the Gender
Parity Law. As of June 2017, women represented over one-third (33 percent) of all board members – the highest figure ever recorded in Italy.7

Following the implementation of the Gender Parity Law on
boards, the average education level of the board as a wholehas also increased, and the ages of the directors have fallen.9
There has also been reduced variability in the stock price of
these companies.10

A recent survey by Credit Suisse, ‘The CS Gender 3000 in 2019’,
placed Italy in fifth place globally, behind Sweden, Belgium, Norwayand France. 8CHALLENGES
There is limited documented evidence of spillover effects on the representation of women in top executive or top earnings positions.
At the end of 2017, only 18 women held the office of CEO while 23
women (10.1 per cent of companies) held the office of chair of theboard of directors.11
Some reasons have been highlighted as possible explanations for this‘glass ceiling’ effect. One of these is the possibility that firms are focusing on numbers of women versus appointing women with theright leadership and managerial skills.12 There is also the issue of an
over-concentration of the same women on multiple boards, as wellas the appointment of women in non-decision-making roles.13A study that examined the aftereffects of the law suggested that in
the short-run, the law did not lead to changes in the overall labour
market situation of women.14 It is expected that it will take time forthe law to change perceptions and social norms and have ripple
effects over the corporate landscape.

SPOTLIGHT ON PUBLIC POLICY • ITALY | 2

CONCLUSION
Gender parity in boardrooms has been given top priority in Italy andthere has been transformative change in board compositions acrossthe country. The improved situation comes at a time of greater focus
and regional momentum for women on boards across Europe. Under
the Europe 2020 Strategy, the European Commission proposed a law

requiring a minimum of 40 per cent female board members in listedcompanies across the European Union.15 With the Gender Parity Law
getting a new boost with a new modification requiring a 40 per centquota, it is expected that the momentum for women’s increased
boardroom participation will continue to grow.

ENDNOTES1. LEGGE 12 luglio 2011, n. 120. http://www.pariopportunita.gov.it/wp-content/uploads/2018/01/legge_
120-2011-2-2.pdf, accessed 25 November 2020.
2. Commissione Nazionale per la Società e la Borsa (CONSOB), Article 147-ter [957], ‘Election and composition of the Board of Directors’, http://www.consob.it/web/consob-and-its-activities/laws-andregulations/documenti/english/laws/fr_decree58_1998.htm?hkeywords=&docid=0&page=0&hits=22&nav=false
3. Hutchison, T., ‘Italy’, Paul Hastings, https://www.paulhastings.com/genderparity/countries/italy.
html#_ftn4, accessed 25 November 2020.
4. Corporate Governance Committee. 2018. Corporate Governance Code. Available at: https://www.
borsaitaliana.it/comitato-corporate-governance/codice/codiceeng2018.en.pdf
5. European Commission, Directorate-General for Employment, Social Affairs and Equal Opportunities,
More women in senior positions, key to economic st ability and growth, 2010, https://op.europa.eu/en/
publication-detail/-/publication/fa515107-36e5-4870-8a17-afc442635d0c/language-en, accessed
25 November 2020.
6. Pastore, P. and S. Tommaso, Women on corporate boards. The case of gender quotas in Italy’, CorporateOwnership and Control, vol. 13 no. 4, January 2016.
7. Commissione Nazionale per la Società e la Borsa (CONSOB), Report on Corporate Governance of Italian
Listed Companies, 16 Dec. 2017, http://www.consob.it/documents/46180/46181/rcg2017.pdf/7846a42b-1688-4f45-8437-40aceaa2b0e3, accessed 25 November 2020.

Funded by:

8. Credit Suisse, ‘CS Gender 3000 report shows one fifth of board positions globally now held by women’,Press Release, October 2019, https://www.credit-suisse.com/about-us-news/en/articles/media-releases /cs-gender-3000-report-shows-one-fifth-of-board-positions-globall-201910.html, accessed 25November 2020.
9. Giulia Ferrari et al., ‘Gender Quotas: Challenging the Boards, Performance, and Stock Market’, IZA
Discussion Paper 10239 5, Sept. 2016, http://ftp.iza.org/dp10239.pdf, accessed 25 November 2020.
10. Ibid.
11. Pastore, Patrizia, ‘Italian Lesson about Getting Women on the Board Five Years after the Implementation of the Gender Quota law’, Corporate Ownership & Control, vol. 16 no. 1, 2018.
12. Ibid.
13. Ibid.
14. Agata, M. and A. Weber, ‘Female leadership and the gender gap within firms: Evidence from an Italianboard reform’, 15 March 2019, https://voxeu.org/article/effect-board-reform-gender-gap-firms,
accessed 25 November 2020.
15. European Commission, ‘Women on Boards: Commission proposes 40% objective’, Press release,
14 November 2012, https://ec.europa.eu/commission/presscorner/detail/en/IP_12_1205, accessed
25 November 2020.

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DISCLAIMER: The views expressed in this publication are those of the authors and do not necessarily represent the views of the European Union, UN Women, International Labour Organization or the United Nations
and their Member States.