Putting pressure on EU companies to reach gender balance

Author Moonshot.news

Published on: 26/08/2024

The number of women on board of directors in the EU has improved but there are still fewer women executives than women non-executives and this is the case in the majority of member states (18 of 27). At least 40% of non-executives are women in eight member states but women account for lower than 3 in 10 executives in all 27 member states, data from EU-agency European Institute for Gender Equality (EIGE) shows.

It took a decade from proposal to implementation, but the EU-s directive on improving gender balance among directors of listed companies must by December 28 be implemented in EU member states’ national legislation.

The directive requires at least 40 % of the non-executive members of the boards of listed companies, or at least 33 % of all directors, to be of each gender. 

In October 2023 (latest available data), women accounted for 36.3 % of non-executive positions in the top two decision-making bodies of the largest listed companies in the EU, compared with 22.4 % of executive positions. 

EIGE notes that several governments have already introduced  legislative quotas to achieve more gender-balanced boards.

“To date, eight member states have put in place legally binding national gender quotas. Quotas in Belgium, France, Italy, the Netherlands and Portugal either match or exceed the 33 % target set by the directive, but Germany (30 %), Greece (25 %) and Austria (30 %) fall slightly short. Twelve further member states have implemented soft measures, and the remaining seven have taken no action”, the organisation reports.

“In all cases, the scope of the existing national legislative quotas is either in line with that of the EU directive, which applies to all listed companies except small and medium-sized enterprises, or broader, by including large unlisted companies (as, for example, in Germany and France).”

“However, soft measures have a narrower scope in some cases, covering only state-owned companies (as is the case in Estonia and Slovenia, for example) or only large companies (as in Spain).”

In October 2023, 39% of the largest listed companies in the EU (229 out of 561) included in EIGE’s data met the target set by the directive of having at least 40 % of non-executive directors of each gender.

The data shows that the share of women on the boards of the largest publicly listed companies registered in EU Member States reached an all-time high of 33.9 % in October 2023. 

However, there are clear differences between member states depending on the type of action taken. Women accounted for nearly 4 in 10 (39.2 %) board members in the eight member states with binding quotas, compared with a third (33.5 %) in member states with soft measures and just one in six (16.7 %) in those member states that have taken no action.

Since 2013, the representation of women on the boards of the largest listed companies has improved in the EU, from 17.5 % to 33.9 %, an increase of 16.4 percentage points. 

“Member States in which governments have taken some type of action (either national quotas or soft measures) have seen the largest improvements. Belgium, Ireland, Spain, Italy, Austria and Portugal have seen increases of more than 20 pp”, EIGE reports. 

“However, there are some exceptions. In Estonia and Slovenia, both of which have had general legislation to promote gender equality in state owned companies since 2004, the share of women on boards has increased only slightly (by less than 5 pp) since October 2013. In Latvia, the corporate governance code for listed companies, applicable since 2020, recommends having both sexes represented on the supervisory board, but the proportion of women on boards has fallen by 4.7 pp since 2013, down to 23.9 % in October 2023.”