According to a European report published this week, there has been limited progress in increasing the number of women on company boards. This finding comes despite the EU Justice Commissioner (Viviane Reding) challenging companies last year to increase women's presence on corporate boards by setting a target of making 30% of board members women by 2015, rising to 40% by 2020. This is also despite Lord Davies' report entitled "Women on Boards" (launched a year ago) which recommended that FTSE 100 companies should set their own targets for improving the number of female directors, suggesting a target of 25% by 2015.
With only 24 companies across Europe signing up to the pledge to take voluntary action, little progress has been made a year on to address the significant gender imbalance at board level. In fact statistics have shown that, in 2010, 11.8% of females were board members of Europe's top firms, with a mere increase of 1.9% by 2011. With gender imbalances narrowing at this rate, the European Commission has predicted that it would take more than 40 years to reach a significant gender balance (at least 40% of both sexes).
A growing body of evidence has also indicated that there are significant economic benefits from a more gender balanced workforce. In particular, the latest report by McKinsey concluded that gender-balanced companies have a 56% higher operating profit compared to male-only companies.
The figures released this week have therefore sparked concern within the Commission, leading to the launch of a public consultation to identify measures to address gender diversity in boardrooms of listed companies in Europe. One such measure could be to introduce mandatory quotas to improve gender balance on boards, a suggestion which has led to much debate.
With the continued drive to increase female representation at board level, both in the UK and in Europe, there will be a number of employment law issues to consider, including the practicalities of implementing such targets, the need to revisit recruitment processes and the potential discrimination implications.
The Commission's consultation will run until 28 May 2012 and a decision will be taken on further action later this year. As International Women's Day draws to a close, it seems that achieving gender diversity in the boardroom will remain on the agenda for some time...
According to a European report published this week, there has been limited progress in increasing the number of women on company boards. This finding comes despite the EU Justice Commissioner