Gender Diversity in the Boardroom

The underrepresentation of women on corporate boards in Europe and across the world has received increased attention, especially over the last 15 years. Although there is an overall consensus that increasing the share of women in areas of power and influence is important for a number of reasons, the best manner in which to accelerate the process has been debated both between and within countries. Consequently, with an increased focus on women on boards and the use of substantially different strategies among countries, we argue that that there is a need for a better understanding of what is happening within the European setting in relation to women on boards and the use of strategies.

Norway was the first country to propose gender representation regulations by means of gender quotas for public limited boards. The law was ratified by the Parliament in 2003 and implemented in 2006 with a two-year grace period. In this chapter, we describe some of the contextual factors and processes that were important leading up to the introduction of the quota law in Norway. We contend that the law is, to a certain extent, in line with the history of equality and the use of policies in the labour market in Norway. Moreover, we argue that politicking and a wide range of actors, in particular women politicians, played an important role in the process leading up to the introduction of the law. In addition, we comment on some of the effects, consequences and lessons learned since the introduction, building on the voluminous body of research that has emerged in the post-quota period. In particular, we show that the law is effective as boards are now gender balanced. Nevertheless, the results of creating more diversity (or equality) beyond the boardroom are less clear. Nonetheless, we argue that the most important effects of the quota law in Norway have possibly been those beyond the country’s border. We contend that if the law had not been introduced in Norway, we would most likely not have seen the trends that are now taking place in Europe (and beyond), where the use of quotas and targets have become natural in diversity discussions at both the political and organisational levels.

In 2007, Spain became the first country in the European Union to implement a recommended gender quota law for women’s participation on boards. The quota required a 40% gender diversity to be achieved by 2015. Not only was this figure not achieved, however, but by 2016 the representation of women on boards of listed companies stood at only around 20%. The reasons behind this delay are resistance on the part of corporations, a potentially low number of women ready to join boards, and a temporary downgrading of the importance of gender equality as a result of austerity measures in the economic recession.

Iceland became in 2010 amongst the very first nations to pass a law on gender quota for corporate boards. The law went a step further than the Norwegian “role model” by stating that 40% of each gender must be represented on corporate boards of directors in all state-owned enterprises, publicly traded firms and all private limited companies with 50 or more employees. No other country has legalised such extensive requirements for firms. This very extensive gender quota law calls for an evaluation of the attainment of the legislative original purpose and also both close monitoring and assessment of the process applied and the short-term and long-term consequences for directors, boards, firms and society. Various actors, who have been either for or against the gender quota, have also been trying to pay attention to some of the processes and short-term and long-term consequences of the gender quota legislation. The results now, in 2017, four years after the implementation of the legislation, seem to point to changes on several fronts. The Icelandic experience of the gender quota so far has revealed that mandatory regulation is a key to the successful increase of female representation around the board table. Further, in the authors’ opinion this mandatory change has led to a sharper focus on the concept of diversity among the business community as well as clearer focus on the director selection process.

After Norway in 2003 and Spain and Iceland in 2007, France adopted gender quotas in boards. With the Copé Zimmermann law, voted on and implemented in January 2011, listed companies and non-listed companies with revenues or total of assets over 50 million euros or employing at least 500 persons for three consecutive years have to reach a minimum of 40% of each sex on boards within a six-year period, with an intermediary level of 20% in 2014. This example of hard law seems to have worked in the French context: after the General Assemblies of 2016, the 140 biggest listed companies (with a capitalisation of more than 1 billion euros) have an average of 36.7% of women on their board. Despite some criticisms about the legitimacy of quotas, and probably due to the existence of a compulsory regulation, no strong and structured hindering forces appeared as regards the increase of female representation on boards. In this chapter, we provide a general background of French companies’ corporate governance structure, and a discussion of the national policy. Along with figures on women representation, we also provide critical reflections on the case and a short reflection from Viviane Neiter, a French practitioner, director in several French listed companies.

In Italy, the so-called Golfo Mosca Law was implemented in 2012. Since its introduction, Italy has been among the countries making the most significant progress in terms of getting women on corporate boards. This law is characterised by a strong pressure through a sanction system, but it has a temporary validity. The aim of this chapter is to show the development of the gender balance initiatives and the effect of the quota law on boards in Italy. In order to understand the progress of the gender public policies in Italy, we also show the development of Italy’s political and economic environment, and we present the main characteristics of the corporate governance system.

Belgium, as a hub for international contacts in the heart of Europe, presents a mixed picture with respect to gender issues. The statistics of Eurostat reveal a significant gender gap regarding employment and overall earnings, but the educational numbers are more promising. Since the millennium, Belgium has taken significant steps forward in the field of gender equality. In this context, initiatives were launched to promote a more balanced participation of women in decision-making bodies. More particularly the debate on gender diversity in the boardroom was brought to a head by the approbation of the Law of 28 July 2011 (so-called quota law). At that time, the Belgian corporate world was still dominated by male captains of industry (“Captains of industry” is a phrase frequently used in Belgium to describe businesspeople who are especially successful and powerful.) who also populated the boards of directors (“old boys’ network”) as reflected in the statistics on female directors. It cannot be denied that quota laws are useful as a temporary measure to drive change, but further actions are required to accelerate the process such as a more open recruitment process, training, mentoring and a comprehensive approach towards diversity within companies. Above all, there is a need to change people’s mind about the value women can and should bring in leading roles!

In the Netherlands, increasing the number of women on corporate boards is considered to be, first and foremost, the responsibility of companies themselves and the Dutch legislator has so far been hesitant in introducing binding gender quotas for companies. However, in January 2013 the legislator introduced gender quotas (30%) for the corporate boards of ‘larger companies’ given the low number of women on corporate boards. These quotas were of a ‘soft’ nature since no strict sanctions would be applied if a company failed to comply with the said target. The law was also temporary in nature and expired automatically on 1 January 2016 because of the legislator’s expectations that the quotas would no longer be necessary after 2016. A proposal has been submitted to Parliament to prolong the aforementioned law for another four years. However, this proposal does not provide for any real sanctions for non-compliance with the quotas introduced. The Second and First Chamber of Parliament adopted this proposal without any further discussion on January 19, 2017 and February 7, 2017, respectively.

In this chapter, I illustrate in broad terms women’s position in the German economy and society and portray key aspects of the structure of corporate boards. I then present data on the development of women’s representation on management and supervisory boards in the largest companies and in listed companies, finding that the gap between the shares of women and men in these top decision-making bodies, and particularly on management boards, is narrowing only very slowly. I review the historical development of public debate and policy initiatives centred on increasing women’s representation on boards and in management more generally and identify key actors in this process. I summarise the provisions of the law on equality for women and men in managerial positions (the “women’s quota”) which was introduced in 2015, and discuss key criticisms and the state of compliance. I reflect on the significance of regulation and social legitimacy for women’s access to boards. Finally, I discuss board composition as symbolic management and the resistance to substantial change that is currently found in the German business community. The chapter closes with a reflection by the President of the women’s association FidAR, Monika Schulz-Strelow.

The aim of this chapter is to discuss and make sense of similarities and differences with regard to the quota laws adopted within the eight countries discussed in this volume: Norway, Spain, Iceland, France, Italy, Belgium, the Netherlands and Germany. They all have, to date, introduced quota laws which are in many debates perceived as a unique tool to increase gender diversity on boards. What is evident is that a wide range of enabling/hindering forces, including the corporate governance structures, traditions, actors and history of equality initiatives, have led to significant variations in terms of approaches taken to increase the share of women on boards in the respective countries. It is also important to take these forces into consideration when making sense of the content, scope and acceptance of respective national quota laws.

In this chapter, we provide a holistic and comparative analysis of similarities and differences within the eight countries and, by doing so, aim to provide a better understanding of the introduction of different quota laws within the eight countries discussed. We argue that not only the different enabling/hindering forces, the historical development and the overall gender equality discourse, but also the corporate governance system influenced the specific country’s quota law design. This chapter also presents the key findings, and lessons learned, from this edited volume and indicates important areas for further research.