More Women in the Boardroom, Please
The European Union law that proposes to impose sanctions on companies that do not allocate at least 40% of their board seats to women appears to be in trouble even before it has been presented for adoption.
Nine countries (Britain, Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta and the Netherlands) have submitted a letter stating that national governments should be the ones that decide what penalties, if any, should apply to corporations that fail to comply.
The protesting countries do not argue with the merits of the law, acknowledging “there are still too few women on the board of publicly listed companies” and “the myriad barriers women encounter throughout their careers are unacceptable.” Their beef however is with “legally binding provisions for women on corporate boards at the European level,” preferring that national governments decide on the appropriate measures to achieve this goal.
The champion of the proposed law, Viviane Reding, Vice President of the Commission, decided to move forward with the mandatory measure after finding that voluntary measures had failed; only 3.2% of the presidents and chairmen of large corporations are women, and women only hold 13.7% of board seats.
How does this compare with the situation in the United States? According to Catalyst, the average board of a Fortune 500 company in the U.S. is only slightly better – at 16% – and women serve as CEO in only 3.8% of the Fortune 500 companies. Even Facebook, whose users are mostly women, only recently named its first female board member after a series of protests ahead of the initial public offering.
Why does this matter? Women’s talents and views deserve to be represented at the CEO and board level. Would our country still be climbing out of the current economic crisis if women had been at the helms and on the boards of the major financial institutions involved in the crisis? If we had more women like Brooksley Born, “the Cassandra of the Derivatives Crisis,” taking on the old boys network?”
Unfortunately, the numbers belie corporate board selection, and CEO recruitment remains an insider’s game despite a variety of voluntary measures from leading corporations. Perhaps the time has come to look for ideas from across the Atlantic to fast forward women’s parity in corporate leadership.
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