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10 October 2012

Why I support the 40 per cent quota for women on boards

Kickstarting gender equality.

By Mary Honeyball

The proposed introduction of mandatory European quotas for women on the boards of larger companies has sent a ripple of fear through the business world in the UK. Certain company bosses and politicians always fear change. Change involving women is even more scary.

Setting quotas has, however, worked in other parts of Europe. Norway introduced legislation in 2003 when women represented just 9 per cent of executives at board level. Since then female representation has increased to 40 per cent, a great achievement in under a decade. Rather than collapsing, as many reactionary Britons may have expected, businesses in Norway have thrived as more women have taken up senior positions.

The reality is nobody knows exactly what the European Commission’s legislative proposals stipulate because they have not yet been published. The plans are at present being scrutinised by the Commission’s lawyers. Only when they are happy can Viviane Reding, the Commissioner responsible, announce her plans.

Despite not knowing any of the detail of the draft legislation, the UK’s Business Secretary, Vince Cable, spearheaded opposition to what he assumed Mrs Reding would propose, sending a letter to the European Commission signed by eight other member states. The letter strongly criticised the plans and told Mrs Reding and her colleagues at the Commission that “the UK had no intention of supporting such legislation but thank you very much for the offer.”

I am a member of the European Parliament Women’s Rights and Gender Equality Committee where debates on mandatory quotas for women on company boards have been taking place for some time. During our committee meeting last month I expressed anger at the UK government’s publication of the letter to Commissioner Reding, saying it was shameful that the British Government was taking such a reactionary line and jumping the gun.

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This is another embarrassing episode for the UK in Europe. A chaotic, ill thought through approach like this undermines Britain’s position in the EU. Far from looking powerful and impressive, taking a position which is both reactionary and rigid sends a very negative message to other member states, making the British look weak and foolish.

Mrs Reding’s response to the letter from the UK Business Secretary demonstrated her indignation in no uncertain terms: “European laws on important topics like this are not made by nine men in dark suits behind closed doors, but rather in a democratic process with a democratically elected European Parliament,” was her uncompromising message to Cable.

Away from the political fallout this has created, it is important to consider why female representation on boards is so low. Women perform as well as men at university and in their early careers, so they are no less capable of doing just as well in more senior positions. There are women qualified women to sit on company boards across Europe, many of whom have already been identified by Commissioner Reding.

This proposed European legislation is not intended to dictate to businesses how they structure companies or force them to appoint token women. Mandatory quotas for women on company boards are required to kick start gender equality at this level. While there has been a small improvement in the last year it is not a significant enough leap.

The Cranfield School of Management reported a slight increase in the percentage of women on the boards of the UK’s 100 largest listed companies. Their statistics revealed that 15.6 per cent, of women sit on company boards today compared with 12.5 per cent last March (2011).

We do not yet know the detail of the draft legislation, but we do know Mrs Reding wants the 40 per cent quota to be operative by 2020. If this is successful it will be a huge improvement and something I will be very proud to have supported.

Mary Honeyball MEP, Labour spokesperson in Europe on gender and equality. www.honeyballbuzz.com