Employment, Social Policy, Health and Consumer Affairs
Ministers in the European Parliament

Gender equality on company boards – Nicolas Schmit reviews the state-of-play on discussions on the directive project in the Council before MEPs

02-12-2015

© European Union 2014 - EP / Arnaud Devillers
Minister Nicolas Schmit, who heads relations with the European Parliament during the Luxembourg Presidency of the Council of the European Union (EU), addressed the plenary meeting of the Assembly which met in Brussels on 2 December 2015 to reply to an oral question on gender equality among the non-executive directors of companies listed on stock markets. The question, submitted by the S&D and EPP political parties, focused more specifically on the state-of-play of discussions within the Council on the directive proposal on the ratio of women on company boards, on which Parliament adopted its position at first reading in November 2013.

It should be remembered, the directive proposal had been submitted in 2012 by the European Commission with a view to addressing the pitifully low representation of women in companies listed on stock markets. This aims to introduce a target of at least 40 % women, currently under-represented, among non-executive members of company boards of directors. Now, if MEPs had adopted their position on the issue on 20 November 2013, the Council had not done so. That is despite the Presidency's commitment which "has been clearly in favour of the directive proposal since it presented its programme", the question reads.

The topic was placed on the agenda of the "Employment and Social Policy, Health and Consumer Affairs" Council agenda of 7 December 2015 with a view to Member States attempting to reach common ground.

According to Nicolas Schmit, the pace must be stepped-up, but debates between Member-States are not very encouraging

During his speech, Nicolas Schmit reminded those present that the European Commission had in October 2015 published fresh statistics concerning gender balance on company boards listed on stock markets, where women represent "barely one-fifth of" members. The figures were slammed as "pitifully low" by the minister who had nevertheless pointed out that they were an "improvement" on 2010, when the issue began to be debated in the EU, and only one out of 10 members sitting on a board of directors was a woman.

Progress on the situation therefore needs to be continued and "the pace needs to be stepped up", Nicolas Schmit went on, noting that "greater equality in board positions sends out a positive signal to society as a whole". According to him, gender equality on decision-making bodies was both a matter of "substantive" and "symbolic" equality, but also very practical while "diversity is often seen as very positive from a good governance point of view".

Furthermore, the Minister explained that the Luxembourg Presidency considers this a "high priority" topic and that it had submitted "a number of new text proposals to national delegations, with a view to hammering out a compromise." . These suggestions have been studied by Council working groups "and we have put this topic on the agenda of the EPSCO Council" scheduled for 7 December 2015 "in order to review the case and to see if a qualified majority can be achieved", added Nicolas Schmit.

While stressing that he could not prejudge the outcome of the discussion, the Minister noted on this issue that recent debates within the Council's preparatory bodies were not "very encouraging". However, he highlighted some "good news", which is that one of the Member States which opposed the text had "changed its mind", which he believed was a "positive sign".

Nicolas Schmit explained that the main stumbling blocks lie in "the different approaches" of Member States on this issue. "Some Member States are at a more advanced stage than others" in terms of results regarding equality, added the Minister, who nevertheless stated that Member States had showed "broad consensus" in favour of the proposal's goals. "Butwhile a large number of Member States support legislation at European level, others continue to prefer national measures, or even non-binding measures at EU level" and "unfortunately they are for the moment a blocking minority" on the Council.

He reiterated in this context that the Commission's proposal aims to put in place binding rules for the selection procedures of board members – which should be fair, transparent and based on merit – with a view toachieving substantive goals, but not to impose binding quotas.

Nicolas Schmit emphasised that the Presidency had, on the basis of a report from the  European Institute for Gender Equality, prepared the Council's conclusions on equality in decision making in view of the EPSCO Council on 7 December. These were however totally separate from the directive project.

In conclusion, the Minister pleaded the case for "ensuring that our larger companies could benefit from the talents and dynamism of women and men", noting the "sheer amount of untapped talent in Europe". Whereas 60 % of university degrees in Europe are currently held by women, "there is no reason, in the 21st century, for governments, companies and banks to be dominated by men", he said.

The debate

Evelyn Regner (S&D) and Mariya Gabriel (EPP), who had both tabled the oral question, called for more women on company boards and putting in place binding rules. They both welcomed the work of the European Parliament, while calling on Member States to do their job and respect their commitments. According to the S&D MEP, a greater presence of women on company boards would be good for the economy. Her EPP colleague stressed that this would lead to better governance and better company performance. Mariya Gabriel also highlighted the role of "legislative pressure", which since the publication of the Commission's proposal in 2012, saw the share of women on company boards rise from 16.6 % at the time of publication to 18.6 % in 2014.

Izaskun Bilbao Barandica (ALDE) explained that 6 out of 10 degrees were held by women and yet 8 out of 10 people on company boards are men, noting that quota policies had proven effective but that they required political will. She also highlighted the studies that show that more balanced companies in terms of women on boards enjoy better results. Terry Reintke (Greens/EFA) also considered that the legal provisions on the matter constitute "a working system", regretting that some Member States have still not recognised their importance.

Eleonora Forenza (UEL) in turn pointed out that because of wage inequalities between men and women, the latter were not paid anymore from 5 November on. For her, it means fighting against discrimination against women and reflecting on the strategies to be implemented in cracking the glass ceiling.

Several MEPs also criticised the principle of quotas. Beatrix von Storch (ECR) thought that introducing quotas would impinge on the freedom of companies "which have the right to act as they saw fit", whereas Diane James (EFDD) believed that setting quotas with penalties was "unrealistic".

In response to MEPs' comments, Nicolas Schmit reminded those present that during the drafting of the Treaty of Rome 60 years ago, men not necessarily very up to date on the issue of gender equality had written in wage equality in the text, whereas inequality was a " huge problem at that time ". He added that: "today, it should be noted that this gap still exists, but without it I doubt we would be where we are today, even if the situation is still far from being satisfactory."

The Minister also agreed that the proposed directive was not desirable in itself, "because we would wish its objective to be achieved", but that the reality is "very different" and therefore "we need an instrument so as to not wait another 70 years". Noting that the different positions on the Council "clearly reflect" those expressed in Parliament, he stressed that the Presidency "will do its utmost and more to achieve a compromise", but that it couldn't "make unrealistic promises".

  • Updated 03-12-2015