COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Gender balance in business leadership: a contribution to smart, sustainable and inclusive growth
Date: 2012-11-14
Institutions: European Commission
Subjects: appointment of staff, board of directors, gender equality, private sector, sustainable development

EUROPEAN 
COMMISSION 

Brussels, 14.11.2012  
COM(2012) 615 final 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Gender balance in business leadership: a contribution to smart, sustainable and 
inclusive growth 

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   EN 

 
 
 
 
  
 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS 

Gender balance in business leadership: a contribution to smart, sustainable and 
inclusive growth 

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TABLE OF CONTENTS 

1. 

2. 

3. 

4. 

5. 

Introduction and context .............................................................................................. 4 

The state of play of women’s participation in corporate boards in the EU.................. 7 

What are the obstacles for gender balance in business leadership positions ............... 9 

Measures taken at Member State level to improve gender balance in corporate 
leadership positions.................................................................................................... 12 

Building on the economic and business case: a new EU legislative initiative to 
accelerate progress towards gender-balanced participation on the boards of listed 
companies................................................................................................................... 13 

6. 

A comprehensive policy to underpin the new EU legislative initiative..................... 15 

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1. 

INTRODUCTION AND CONTEXT 

The  last  decades  have  witnessed  significant  progress  in  women's  educational 
attainment,  labour  market  participation  and  position  in  the  European  society  as  a 
whole. Today, more women than men graduate from universities: 60% of university 
graduates  are  women.  Today,  more  women  work  in  Europe  than  ever  before:  their 
employment  rate  exceeded  60%  and  the  EU  is  making  more  use  of  its  talent  and 
better use of its skills. Today, it is clear that women and men cannot be discriminated 
against on grounds of gender.  

The  EU  has  contributed  to  this  progress  through  a  multitude  of  measures  such  as 
legislation,  dedicated  funding  and  action  programmes,  specific  measures  for  the 
advancement  of  women,  social  dialogue  and  dialogue  with  civil  society.  Gender 
equality  is  a  fundamental  right,  a  common  value  of  the  EU,  and  a  necessary 
condition  for  the  achievement  of  the  EU  objectives  of  smart,  sustainable  and 
inclusive growth. It has become a well-established area of policy action as enshrined 
in the EU Treaties and the EU Charter of Fundamental Rights. Gender equality has 
progressively  been  integrated  in  all  EU  policies,  and  is  now  well  anchored  in 
employment  and  cohesion  policies,  research,  education,  development  cooperation 
and the Europe 2020 process to name some examples. 

This  has  been  possible  because  since  its  early  days,  the  European  Union  has  been 
given by Member States the competence and the authority to act on gender equality. 
Back  in  1957,  the  Treaty  of  Rome  already  included  the  principle  of  equal  pay  for 
equal  work  for  women  and  men.  With  the  Defrenne  case  in  19711,  the  Court  of 
Justice of the European Union confirmed that this principle was directly applicable, 
thereby giving citizens the right to directly rely on it in national courts and paving the 
way for modern European gender equality law. 

As the EU Treaties empower the European Commission to adopt measures to ensure 
equal  opportunities  and  equal  treatment  between  women  and  men  in  matters  of 
employment and occupation, the Commission has over the years taken a number of 
legislative steps in the field of employment, in particular the principle of equal pay 
and  the  principle  that  women  and  men  must  have  the  same  promotion  and  training 
opportunities2. It has also proposed legal instruments establishing equal treatment in 
social  security  and  for  self-employed  workers  and  assisting  spouses3,  thereby 
considerably improving their social security protection. Important legislation has also 
been promoted in the field of reconciliation between private and professional life4.  

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Judgment of the Court of Justice of the European Union of 25.05.1971 (C-80/70). 
For example: Directive 2006/54/EC of 5 July 2006 of the European Parliament and of the Council on 
the  implementation of  the principle of  equal  opportunities  and  equal  treatment  of  men  and women  in 
matters of employment and occupation. 
For example: Directive 2010/41/EU of 7 July 2010 of the European Parliament and of the Council on 
the application of the principle of equal treatment between men and women engaged in an activity in a 
self-employed capacity and repealing Council Directive 86/613/EEC. 
Council  Directive  2010/18/EU  of  8  March  2010  implementing  the  revised  Framework  Agreement  on 
parental  leave  concluded  by  BUSINESSEUROPE,  UEAPME,  CEEP  and  ETUC  and  repealing 
Directive 96/34/EC. 

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The  European  Commission  strongly  promotes  gender  equality  also  within  its  own 
ranks. It has adopted in 2010 its own internal Strategy5, aiming to build further on the 
considerable  progress  made  over  recent  years  in  terms  of  representation  of  women 
among  its  staff.  The  Strategy  defines  targets  for  the  representation  of  women  at 
senior  and  middle  management  levels  as  well  as  at  non-management  administrator 
level, to be reached by the end of 2014. Thanks to these targets, on 1 October 2012, 
the  Commission  counted  27.2%%  female  senior  managers  (including 
the 
Commission’s  Secretary  General)  and  28.7%  female  middle  managers6,  which  is  a 
good  starting  point  for  making  further  progress  by  2020.  Moreover,  following 
President Barroso call to Heads of State and Governments to see gender balance as a 
common goal and shared responsibility and to pay particular attention to the presence 
of women in the College, today, one third of the College's members are women.  

Despite  progress,  the  road  to  effective  equality  remains,  however,  long  and  full  of 
obstacles.  Gender  imbalances  in  economic  decision-making  are  emblematic  of  this 
reality, and the situation in corporate boards is particularly disappointing with little 
signs of improvements. Across the EU, company boards are currently dominated by 
one  gender:  86.3%  of  board  members  are  men  while  women  represent  just  13.7% 
(15% among non-executive directors). 96.8% of the chairpersons are men and only 
3.2% are women.  

Women  and  men  should  have  the  same  opportunities  and  be  given  the  same 
possibilities  to  take  leadership  positions.  This  principle  was  clearly  set  out  in  the 
European Commission Strategy for Equality between women and men 2010-2015. It 
is not only a question of gender equality. There is also a well-established economic 
and  business  case  for  increasing  the  presence  of  women  in  business  leadership 
positions.  An  efficient  use  of  human  capital  constitutes  the  most  important 
determinant  of  an  economy’s  competitiveness  and  is  key  for  addressing  the  EU’s 
demographic  challenges  and  for  competing  successfully  in  a  globalised  economy. 
Numerous  studies  have  shown  that  there  is  a  positive  correlation  between  gender 
diversity  at  top-level  management  and  a  company’s  financial  performance  and 
profitability.  Improving  female  representation  on  the  boards  of  listed  companies  in 
the Union can therefore have a positive impact on companies’ performance. 

Labour  market  equality  contributes  to  economic  growth.  Enhancing  women’s 
presence in the board of companies listed on the stock exchange in the EU not only 
positively  affects  the  appointed  women,  but  has  also  the  potential  to  attract  female 
talent  to  the  company  and  increases  the  presence  of  women  at  all  levels  of 
management  and  in  the  workforce.  Therefore,  making  full  use  of  the  female  talent 
pool  improves  return  on  education  for  both  individuals  and  the  public  sector. 
Ultimately, making full use of the female talent pool contributes to the fulfilment of 
the  goals  of  the  Europe  2020  Strategy  for  smart,  sustainable  and  inclusive  growth, 
notably its 75 % employment target. 

Throughout  the  years,  the  European  Union  has  taken  a  number  of  non-binding 
measures  aimed  at  improving  the  participation  of  women  in  decision  making.  In 

5 

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Communication  to  the  Commission  on  a  Strategy  on  Equal  Opportunities  for  the  period  2010-2014, 
SEC(2010) 1554/3. 
In 1995, the share of women in senior management posts was 4% and 10.7% in  middle  management 
posts.  

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particular, on proposals from the Commission,  two  recommendations  were  adopted 
by  the  Council  on  this  subject,  in  19847  and  19968.  However,  these  (non-binding 
recommendations)  did  not  bring  any  palpable  progress.  As  a  consequence,  the  low 
level  of  participation  of  women  in  positions  of  responsibility  developed  into  a 
growing matter of concern.  

2010 and 2011 saw a renewed commitment at EU level for the promotion of gender 
equality  on  the  boards  of  the  largest  listed  companies.  The  Commission  identified 
‘Equality in decision making’ as one of the priorities of the Women’s Charter9 and of 
its Strategy for equality between women and men 2010-201510. In March 2011, the 
Commission  launched  the  ‘Women  on  the  Board  Pledge  for  Europe’11,  a  call  for 
publicly  listed  companies  in  Europe  to  voluntarily  commit  to  increasing  women’s 
presence  on  their  boards  to  30 %  by  2015  and  40 %  by  2020.  The  European 
Parliament,  in  its  resolution  on  women  and  business  leadership  of  6  July  201112, 
urged companies to attain the critical threshold of 30 per cent female membership of 
management bodies by 2015 and 40 per cent by 2020. It called on the Commission, if 
the steps taken by companies and the Member States were found to be inadequate, to 
propose  legislation  by  2012,  including  quotas.  The  European  Parliament  reiterated 
that  call  for  legislation  in  its  resolution  of  13  March  2012  on  equality  between 
women and men in the European Union – 201113. Moreover, in their 2012-14 work 
programme,  the  European  social  partners  have  reaffirmed  their  commitment  to 
further action to promote women in decision-making.  

In  March  2012,  the  Commission  took  stock  of  the  situation14,  finding  an  average 
annual  improvement  of  just  0.6  percentage  points  over  the  past  years.  At  this  slow 
rate of progress, it would take more than 40 years before companies naturally reach 
gender balanced representation in boards. For this reason, the Commission launched 
a public consultation on possible action to tackle this imbalance. It also conducted an 
impact  assessment  on  the  costs  and  benefits  of  improving  gender  balance  on  the 
boards of listed companies. 

This  Communication  presents  the  state  of  play  of  women’s  under-representation  in 
business  leadership  positions.  It  highlights  the  main  obstacles  to  women’s  career 
progression  and  explains  how  a  new  EU  legislative  initiative,  as  proposed  by  the 
Commission  in  conjunction  with  this  Communication15,  to  improve  gender  balance 
in the boards of listed companies would make change structural and irreversible. As 
the  reasons  for  the  under-representation  of  women  in  business  leadership  are 

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Council  Recommendation  84/635/EEC  of  13  December  1984  on  the  promotion  of  positive  action  for 
women. 
Council Recommendation 96/694/EC of 2 December 1996 on the balanced participation of women and 
men in the decision-making process. 
COM(2010) 078 final. 
COM(2010) 491 final. 
http://ec.europa.eu/commission_2010-2014/reding/womenpledge/index_en.htm. 
2010/2115(INI). 
European Parliament Resolutions 2010/2115(INI) of 6 July 2011 and 2011/2244(INI) of 13 March 2012 
European  Commission  (2012),  Women  in  economic  decision-making  in  the  EU:  Progress  report, 
available at http://ec.europa.eu/justice/gender-equality/gender-decision-making/index_en.htm.  
Proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on  improving  the  gender 
balance  among  non-executive  directors  of  companies  listed  on  stock  exchanges  and  related  measures 
COM(2012) XXX. 

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multifaceted, the Commission proposes a set of accompanying measures to improve 
the gender balance in business leadership in order to help Member States implement 
legislative proposals and improve gender equality in decision-making at all levels. 

2. 

THE  STATE  OF  PLAY  OF  WOMEN’S  PARTICIPATION  IN  CORPORATE  BOARDS  IN  THE 
EU 

Women’s participation in corporate boards remains low  

Despite representing around 45 % of people employed in the EU and 56 % of people 
in  tertiary  education,  women  only  represent  13.7 %  of  board  members  in  the  major 
publicly listed companies in the EU (see Figure 1). Women occupy a quarter of the 
seats  on  boards  of  large  listed  companies  in  Finland,  Latvia  and  Sweden  and  just 
over a fifth in France. But there are fewer than one in 10 in Ireland, Greece, Estonia, 
Italy,  Portugal,  Luxembourg  and  Hungary,  fewer  than  one  in  20  in  Cyprus  and 
around one in 30 in Malta16. 

Figure 1 — Women and men on the boards of the largest listed companies, January 2012 

Source: European Commission, Database on women and men in decision making and Eurostat, Labour Force Survey. 

Note:  In  countries  with  unitary  (one-tier) systems,  the  board  of  directors  is  counted  (including  non-executive  and  executive  members).  In 
countries with two-tier systems, only the supervisory board is counted. 

16 

http://ec.europa.eu/justice/gender-equality/gender-decision-making/database/business-finance/quoted-
companies/index_en.htm.  

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Among non-executive directors of the major publicly listed companies in the EU the 
women represent only 15% (see Figure 2). 

Figure 2 – Women on the boards of the largest listed companies: executive and non-executive 
members (January 2012) 

Source: European Commission's Database on women and men in decision-making 

Note: In a one-tier system data on non-executives refer to non-executive members of the board and data on executives to executive members 
of the board. In a two-tier system data on non-executives refer to members of the supervisory board and data on executives to members of the 
executive/management board. Occasionally, it is possible for the supervisory board to include one or more executive members (e.g. CEO and 
CFO). In this case these are included in the executive figures, though individuals participating in both boards are counted only once. Non-
executive figures in this case still refer to the total members of the supervisory board and could, therefore, include some executives but the 
numbers concerned are not significant and should not affect the final result.  

Progress is slow and uneven across EU Member States 

Between the end of 2003 and the beginning of 2012, the share of women on boards 
rose  from  8.5 %  to  13.7 %,  changing  on  average  by  only  0.6  percentage  points  per 
year. A slight improvement of 1.9 percentage points was recorded between October 
2010  and  January  2012,  linked  to  intensive  public  debate  initiated  by  the 
Commission’s and the European Parliament’s calls for action. This was followed in 
some Member States by concrete steps to accelerate the pace of change. 

However, progress remains slow as more than six out of every seven board members 
are men (86.3 %) and the performance of individual countries varies. France, which 
adopted a legally binding quota in January 2011, saw the most notable improvement 
(10 percentage points) accounting for more than 40 % of the total change EU-wide, 
while  some  Member  States  even  recorded  a  negative  trend  (Romania,  Hungary, 
Slovakia, Sweden, Denmark and Estonia). 

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Figure 3 — Change in the share of women on corporate boards, October 2010-January 2012 

Source: European Commission, Database on women and men in decision making. 

3. 

WHAT  ARE  THE  OBSTACLES  FOR  GENDER  BALANCE  IN  BUSINESS  LEADERSHIP 
POSITIONS 

Gender  imbalances  in  corporate  leadership  positions  are  only  the  ‘tip  of  the 
iceberg’ 

Gender imbalances in corporate leadership positions are important, but are only the 
tip of the iceberg of a more widespread situation of inequalities in our society. There 
are several causes of this and they build up over the course of a woman’s or man’s 
life.  Although  the  number  of  women  in  leadership roles is increasing, the evidence 
shows that there are still many barriers to overcome. 

The causes stem from traditional gender roles, the division of labour, women’s and 
men’s  educational  choices,  and  women’s  concentration  in  few  occupational 
sectors 

Big  differences  in  the  type  of  education  followed  by  women  and  men  remain. 
Women  are  still  under-represented  in  sciences,  technology,  engineering  and 
mathematics  (STEM)  subjects17,  which  are  most  in  demand  on  the  labour  market. 
These gender differences are related to students’ attitudes towards subjects, such as 
motivation and interest, which are shaped early in life18 and which are also linked to 
the perception of women’s and men’s different roles in society. 

Once  in  the  labour  market,  women  tend  to  concentrate  in  a  small  number  of 
occupations which are often paid less and less valued. This can impact negatively on 
their chances of accessing the highest positions in companies. Almost 29% of women 
in  work  in  the  EU  are  employed  in  just  six  of  the  130  standard  occupational 

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18 

To tackle this issue, the Commission promoted a Code of Best Practices for Women in ICT (2010). 
OECD (2012) – Gender initiative: gender equality in education, employment and entrepreneurship. 

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categories19 whereas the top six occupations for men account for almost 20% of total 
men  in  work.  Across  economic  activities20  women  make  up  almost  83%  of  those 
working in health and social work and just over 71% of those employed in education, 
while they account for just over 62% of total employment in retailing21. 

The  lack  of  support  to  balance  care  responsibilities  with  work  remains  a  major 
challenge 

The lack of a comprehensive and balanced offer of flexible work measures remains a 
major barrier to women’s rise to leadership22. Only ten EU Member States have met 
the  Barcelona  objective23  of  33%  childcare  coverage  rate  for  children  under  three, 
while only nine Member States have met the Barcelona objective of a 90% coverage 
rate for children between three years old and the mandatory school age24. 

This has an unbalanced repercussion on women’s and men’s work patterns 

Women continue to adapt their work patterns to the lack or inadequacy of measures 
to reconcile work and private life. The employment rate of women decreases with the 
number  of  children,  while  the  employment  rate  of  men  increases  with  the  first  and 
the  second  child.  Women  face  more  frequent  career  interruptions  and  higher 
incidences  of  flexible  work  arrangements  and  part-time  work  than  men.  This  has  a 
heavy  impact  on  women’s  possibility  to  work  full  time,  benefit  from  training 
opportunities  and  progress  in  their  careers  on  a  level-playing  field  with  men. 
Ultimately, it has a negative impact on their pay and pensions. It is recognised that 
working  part-time  and  career  interruptions  are  obstacles  to  promotion  into  senior 
positions. 

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24 

ESTAT, ISCO-08, 3-digit level. 
ESTAT, NACE Rev 2, 2-digit level. 
ESTAT (2011) EU-LFS. 
Firm-level survey by World Economic Forum, quoted in OECD (2012). 
The  objectives  –  defined  by  the  Barcelona  European  Council  in  2002  –  aim  at  ensuring  suitable 
childcare provision by the EU Member States. 
ESTAT (2010) EU-SILC. 

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Figure 4 – Employment rate according to the parental status (aged 25-49) – 2011 

(Difference in percentage points in employment rates with the presence of one child under 12 and 
without the presence of any children) 

Source : Eurostat, European Labour Force Survey, annual averages. 

The glass ceiling is still a major limit 

Experience  shows  that  even  women  who  have  successfully  overcome  the  above 
mentioned  obstacles  and  are  ready  to  be  ‘boarded’  are  ultimately  faced  with 
continuing  barriers  to  their  advancements  to  the  highest  levels  of  decision-making 
often referred to as the ‘glass ceiling’, regardless of their willingness to advance and 
their academic and professional qualifications. 

Women  on  the  board  of  FTSE  100  companies  in  the  UK  have  better  educational 
credentials than men25 on average. The same holds true for women joining corporate 
boards in Norway26. 

In  September  2011,  the  European  Business  Schools  and  Senior  Executive  Women 
launched a call for action to fight against the glass ceiling. They established in 2012 
a list of "Board Ready Women" (with around 7,500 names) to make clear that there 
are  more  than  enough  eminently  qualified  women  to  help  lead  Europe's  and  the 
world's corporations and that is time to shatter the ceiling that has kept women from 
ascending to board of directors positions27. 

Women  have  a  comparative  disadvantage  as  compared  to  men  as  they  must 
overcome preconceptions about requirements for leadership positions, discrimination 

25 

26 
27 

Singh  et  al.  (2008),  ‘Newly  appointed  directors  in  the  boardroom:  How  do  women  and  men  differ?’, 
European Management Journal, 26(1). 
Norwegian Institute for Social Research. 
http://www.edhec.com/html/Communication/doc-womenboard/BoardReadyWomen.pdf.  

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and  stereotyping28.  Subtle  barriers,  including  the  perception  that  women  are  either 
not interested or incapable of performing certain tasks, or that these posts are ‘male’ 
jobs,  continue  to  keep  most  women  stagnating  at  lower  management  levels  in 
companies. 

According  to  a  Eurobarometer  survey  from  2011,  88 %  of  Europeans  think  that 
women  should  be  equally  represented  in  business  leadership  positions  and  78 %  of 
them think that the European business community is dominated by men who do not 
have sufficient confidence in women’s abilities29. 

In  a  survey  of  500  senior  women  from  corporations  and  professional  firms  across 
Europe30, two-thirds of those interviewed highlighted stereotypes and preconceptions 
about women’s roles and abilities as the most important obstacle they faced. 

The lack of transparency in recruitment and promotion practice 

The  current  lack  of  women  in  senior  positions  influences  companies’  decisions, 
including their attitude towards gender equality and the appointment of more female 
board members, both in the short and long term. This is exacerbated by the lack of 
transparency  in  recruitment  and  promotion  processes.  Appointments  to  boards  rely 
heavily on personal and professional contacts of current board members. 

The lack of transparency of appointments for board positions remains an obstacle to 
women’s career progression. This issue was highlighted by several stakeholders who 
answered the public consultation launched by the Commission31. 

Increasing  the  share  of  women  on  corporate  boards  can  attract  female  talent  to 
companies and lead to a higher representation of women at all levels of management. 
It is also expected to have a positive spill-over effect on female employment in the 
companies  concerned  and  on  long-term  economic  growth  throughout  the  whole 
economy.  Promoting  adequate  mentoring,  sponsorship,  training  opportunities  and 
role models are necessary to increase the number of women in the talent pipeline in 
management operations and in senior executive roles, from where board candidates 
are often recruited. 

4. 

MEASURES  TAKEN  AT  MEMBER  STATE  LEVEL  TO  IMPROVE  GENDER  BALANCE  IN 
CORPORATE LEADERSHIP POSITIONS 

A range of initiatives has been undertaken in the Member States  

The  importance  of  swiftly  improving  women’s  presence  in  business  leadership,  in 
particular on corporate boards, is high on the political agenda not only at EU level, 
but also at national level. A range of initiatives has been undertaken by governments, 
social partners, individual businesses and other stakeholders to accelerate progress. 

28 

29 
30 

31 

Liff  and  Ward  (2001)  ‘Distorted  Views  through  the  Glass  Ceiling:  the  Construction  of  Women’s 
Understandings of Promotion and Senior Management Positions’. 
Special Eurobarometer 376 (2011), Women in decision making. 
Catalyst  and  the  Conference  Board  Europe  (2002),  Women  in  Leadership:  A  European  Business 
Imperative. 
http://ec.europa.eu/justice/newsroom/gender-equality/opinion/120528_en.htm. 

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Voluntary initiatives  

Several EU Member States have developed voluntary initiatives and tools to address 
the under-representation of women in senior leadership positions32. These measures 
have  the  advantage  of  greater  flexibility  and  a  greater  sense  of  ownership  for  the 
companies  that  undertake  such  measures.  However,  despite  promoting  positive 
developments, they have not triggered marked progress. 

Legislative measures with binding quotas 

Figures show that legislative measures yield more substantial progress compared to 
voluntary  initiatives,  especially  if  they  are  accompanied  by  sanctions.  This  is  most 
clearly  demonstrated  by  the  impact  of  the  now  well-established  Norwegian 
legislation, which imposes a legally binding quota of 40% with the dissolution of the 
company  as  sanction  in  case  of  non-compliance,  and  –  within  the  EU  –  by  the 
situation in France where a legally binding quota of 20% within 3 years (2014) and 
40% within 6 years (2017) is in force. Other EU Member States have adopted as well 
different types of quota rules (Austria, Belgium, Denmark, Finland, Greece, Italy, the 
Netherlands, Portugal, Slovenia and Spain)33. 

5. 

BUILDING  ON  THE  ECONOMIC  AND  BUSINESS  CASE:  A  NEW  EU  LEGISLATIVE 
TOWARDS  GENDER-BALANCED 
INITIATIVE 
PROGRESS 
PARTICIPATION ON THE BOARDS OF LISTED COMPANIES 

TO  ACCELERATE 

The economic and business case confirmed  

Previous  efforts  to  attain  gender-balanced  participation  in  corporate  leadership 
positions have not yielded a substantive outcome and there is an ever widening gap 
between Member States in the EU, both in terms of factual progress made and in the 
type of measures taken at national level. 

The EU cannot afford this systematic gender imbalance at the top level of economic 
decision-making and the resulting waste of talent and resources. 

There  is  an  economic  and  business  case  for  gender  diversity  on  boards,  including 
recent  research34.  Gender  diversity  in  the  boardroom  has  been  shown  to  lead  to 
innovative  ideas,  increased  competitiveness  and  performance,  and  improved 
corporate  governance.  It  is  a  sign  of  openness  to  more  viewpoints  and  respect  for 
differences among stakeholders — shareholders, investors, employees and customers 
— signalling the company’s recognition of the complexity of world markets and its 
preparedness to compete effectively at the global level. 

32 
33 
34 

European Commission (2012), ‘Women in economic decision-making in the EU: Progress report’. 
Idem. 
Most  recently:  Credit  Suisse,  Research  Institute  (August  2012),  ‘Gender  diversity  and  corporate 
performance’;  other  important  studies:  Catalyst  (2004),  ‘The  Bottom  Line:  Connecting  Corporate 
Performance  and  Gender  Diversity’;  McKinsey  (reports  of  2007,  2008  and  2010),  ‘Women  Matter’; 
Deutsche  Bank  Research  (2010),  ‘Towards  gender-balanced  leadership’;  Ernst  &  Young  (2012), 
‘Mixed leadership’. 

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Given the lack of sufficient and sustainable progress in achieving gender balance on 
boards  and  the  fact  that  it  is  a  challenge  faced  by  all  EU  Member  States,  the 
European  Commission  has  explored  a  range  of  options  for  targeted  measures  to 
improve female participation in decision-making at European level. 

The  analysis  of  these  options  shows  that  making  full  use  of  the  EU’s  female 
workforce  will  contribute  to  sustainable  growth  and  the  competitiveness  of  the  EU 
economy, particularly in face of demographic change and the current crisis. 

The need to act at EU level 

Continuing at the current pace will not lead to a substantial increase of women on the 
boards  of  listed  companies  throughout  the  EU.  The  scattered  and  divergent 
regulation or the absence of regulation at national level as regards gender balance on 
company  boards  leads  to  discrepancies  in  the  number  of  women  among  executive 
and  non-executive  directors  and  different  rates  of  improvements  across  Member 
States.  It  may  also  pose  barriers  to  the  internal  market  by  imposing  divergent 
corporate governance requirements and sanctions on European companies. 

The potential for gender equality, competitiveness and growth can be better achieved 
through  coordinated  action  at  EU  level  rather  than  through  national  initiatives  of 
varying  scope,  ambition  and  effectiveness.  Therefore,  the  Commission  proposes  a 
legislative measure to improve gender balance on the boards of companies listed on 
stock-exchanges. 

Focusing on listed companies 

Due  to  their  economic  importance,  visibility  and  impact  on  the  EU  market,  an  EU 
level legislative measure should only apply to listed companies, i.e. companies in a 
Member State whose securities are open for trading on a regulated market35. Listed 
companies that  are SMEs should be  exempted, as the obligation to reach the target 
could create a disproportionate administrative burden for them. 

In addition to their economic importance — with a total turnover equivalent to 68 % 
of the EU GDP — listed companies are also highly visible. They set standards for the 
whole economy and they can expect their practices to be followed by other types of 
companies. 

Setting objectives  

The  legislative  measure,  based  on  Article  157(3)  TFEU,  establishes  a  minimum 
objective  of  40 %  of  the  under-represented  sex  among  non-executive  directors  on 
boards of listed companies, to be achieved by 2020, or by 2018 for listed companies 
that are public undertakings. It obliges companies below this level of representation 
to make appointments to those positions in order to attain this objective on the basis 
of  a  selection  procedure  based  on  pre-established,  clear,  neutrally  formulated  and 
unambiguous qualification criteria in line with the case law of the Court of Justice of 
the European Union. The objectives set under this proposal should only apply to non-
executive directors in order to strike the right balance between the need to increase 

35 

Within the meaning of Article 4(1) point (14) of Directive 2004/39/EC. 

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the gender diversity of boards on the one hand and the need to minimise interference 
with day-to-day management of a company on the other hand. 

In order to achieve that objective and in line with the case law of the Court of Justice 
of  the  European  Union,  Member  States  shall  ensure  that  in  the  selection  of  non-
executive directors, priority will be given to the  candidate of  the under-represented 
sex if that candidate is equally qualified as the candidate of the other sex in terms of 
suitability, competence and professional performance, and if an objective assessment 
taking  account  of  all  criteria  specific  to  the  individual  candidates  does  not  tilt  the 
balance in favour of a candidate of the other sex. 

As regards executive directors, listed companies should be obliged to set their own 
commitments,  to  be  met  within  the  same  timeframe  as  the  objectives  for  non-
executive directors. 

An effective monitoring and enforcement system 

Member States should provide for effective, proportionate and dissuasive sanctions if 
these obligations are breached.  

Listed companies are required to provide information on the gender composition of 
their boards to competent national authorities. This information should be published 
on  the  company's  website  and,  if  the  company  in  question  does  not  meet  the 
objective, it should include a description of measures the company has taken so far 
and intends to take in order to meet the objective in the future. 

In  accordance  with  the  principle  of  proportionality,  EU  action  should  be  limited  in 
time and the legislative measure will be repealed as soon as sustainable progress in 
the gender composition of boards is achieved. 

6. 

A COMPREHENSIVE POLICY TO UNDERPIN THE NEW EU LEGISLATIVE INITIATIVE 

Improving female participation on the labour market and in leadership positions 

the 

to  complement 

legislative  measure  with  a 
The  Commission  proposes 
comprehensive approach combining policy measures and financial support. Some are 
the  continuation  of  on-going  measures,  while  others  are  new36.  Moreover,  the 
Commission  will  urge  Member  States  to  complement  activities  currently  proposed 
for the private sector also in the public sector, notably with regards to the boards of 
national central banks, which are mainly composed by men (83% on average in EU-
27). 

In partnership with national governments and other stakeholders 

The  Commission  will  cooperate  with  all  stakeholders  —  governments,  social 
partners, enterprises, business schools, etc. — supporting them in their work and in 

36 

The  Commission  is  also  considering  general  measures  that  have  as  their  objective  increasing  the 
diversity in the boards of companies through enhanced transparency in order to facilitate an effective 
oversight of the management and robust governance of companies. 

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designing  and  implementing  EU-wide  activities  to  improve  female  participation  in 
the labour market and achieve gender balance in leadership positions. 

Within this framework, the Commission will: 

a) 

Support initiatives to combat stereotyped representations of the role of women and 
men in society, labour market and leadership positions 

• 

• 

Encourage executive search firms to prepare a voluntary code of conduct 
at EU level addressing gender diversity and best practice, in order to put 
gender diversity on the agenda in the appointment process. 

Encourage  business  schools  to  promote  gender  diversity  in  leadership 
positions  and  to  build  awareness  in  the  corporate  and  academic  sectors 
through their curricula and activities. 

b) 

Contribute  to  the  creation  of  a  social,  economic  and  business  environment 
supportive of a balanced participation of women and men in leadership positions 

• 

• 

• 

Contribute to the development of policies to reconcile work, private and 
family life, including the use of innovative approaches resulting from the 
use of ICT, that  support women’s  and men’s participation in the  labour 
market and in decision-making positions. In 2013, the Commission will 
report on policies to reconcile work, private and family life, also taking 
stock  of  progress  made  towards  the  achievement  of  the  "Barcelona 
targets"  for  childcare  facilities37,  highlighting  remaining  challenges  and 
providing policy guidance. 

Strengthen the gender aspect of the Europe 2020 Strategy to help achieve 
the 75 % employment rate target by 2020. This will be done by stepping 
up  cooperation  with  the  Member  States,  including  in  the  framework  of 
the Employment and the Social Protection Committees. Specific attention 
will  be  devoted  to  the  gender  equality  aspect  of  the  European  semester 
outputs,  including  the  follow-up  of  Country  Specific  Recommendations 
related to women's labour market participation. 

Contribute  to  the  fight  against  gender  stereotypes  and  the  promotion  of 
gender  equality  at  all  levels  of  education  and  training,  including  in 
particular  through  the  European  Social  Fund  and  the  EU  Lifelong 
Learning  Program  and  its  successor;  furthermore,  in  particular  in  the 
context  of  the  Europe  2020  Strategy  and  the  European  Social  Fund 
programming, pay specific  attention  to the transition between education 
and the labour market, and to the gap between educational attainment and 
professional  development,  particularly  of  women,  with  a  view  to 

37 

At the European Council meeting in Barcelona in 2002, the Heads of States and Governments agreed 
that Member States should provide childcare facilities by 2010 to at least 90% of children between 3 
years old and the mandatory school age and at least 33% of children under 3 years of age. The lack of 
childcare  facilities  is  addressed  in  the  Europe  2020  Strategy.  In  the  European  semester  2012,  nine 
Member  States  (AT,  CZ,  DE,  HU,  IT,  MT,  PL,  SK  and  UK)  have  received  a  country  specific 
recommendation on that matter.  

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eliminate  obstacles  they  meet  in  their  choice  of  career,  especially  as 
regards mathematics, sciences and technologies.  

c) 

Promote awareness about the business and economic case for gender equality and 
balanced representation of women and men in decision making 

• 

• 

Support  awareness-raising  activities  by  promoting  exchanges  and 
disseminating experiences and good practices. 

Support awareness-raising activities at company level. This will be done 
by  creating,  disseminating  and  implementing  in  all  EU  Member  States 
and  in  cooperation  with  the  business  world,  training  modules  for  small, 
medium  and  large  enterprises  and  exchanging  good  practices  by  and 
among enterprises. 

d) 

Support and monitor progress towards a balanced participation of women and men 
in decision-making positions across the EU 

• 

• 

Increase  accountability  by  regularly  reporting  on  progress  made  in  the 
EU Member States and by widely disseminating the results. 

Contribute to the improvement and availability of data by continuing to 
collect, disseminate and develop comparable data at EU level through the 
Commission’s database on women and men in decision making. 

•  Monitor  whether  the  legally  binding  instrument  has  been  correctly 
transposed  and  implemented  at  national  level  and  report  at  regular 
intervals  to  the  European  Parliament  and  the  Council  on  the  progress 
made. 

• 

Encourage Member States to follow the call of the European Parliament 
to improve the gender balance situation in national central banks, thereby 
also  improving  the  conditions  for  gender  balance  in  the  Governing 
Council of the European Central Bank.  

The  Commission  will  finance,  where  appropriate,  the  above  non-exhaustive  list  of 
activities  under  the PROGRESS  Programme  and,  without  pre-judging  the  on-going 
negotiations  for  the  Multiannual  Financial  Framework,  under  the  future  financial 
instrument  covering  the  gender  equality  policy  area.  This  will  be  achieved  in 
particular  by  publishing  restricted  and  open  calls  for  proposals  in  2012,  2013  and 
2014. 

The  Commission  will  work  with  the  Member  States  to  make  full  use  of  the  co-
financing  opportunities  offered  by  the  Structural  Funds,  including  the  future 
programming period, in order to promote women’s access to employment and career 
progression and to improve the work-life balance, in particular through the provision 
of affordable and quality childcare facilities.  

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