Gender Equality An Imperative, Not A Luxury, States New EU Law

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In a timely article about how the European Union plans to break the glass ceiling for women across the member states, the commissioner for justice, consumers and gender equality, Vera Jourova, breaks down why new legislation ensuring more women are hired on company boards is a good thing.

Vera is the first European commissioner to carry “gender equality” in her title. She begins by stating how the EU’s commitment to gender equality dates back to the treaty of Rome in 1957, and how the fruits of that union are evidence of this.

“60 per cent of university graduates are women, more women work in Europe than ever before, with their employment rate exceeding 60 per cent. The EU is making more use of its talent and better use of its skills. Women and men cannot be discriminated against on grounds of gender due to the existing legislation,” she states.

The average wage gap across the union states is 16%, and women unfortunately make up the majority of lower-paid sectors in the labor market. Women are largely underrepresented in decision-making positions, and work more unpaid hours than men at home. This is what they hope to change.

“Despite the fact that over 60 per cent of university graduates are female, only 18.6 per cent of board members of the largest publicly listed companies in the EU are women and less than four per cent of these companies have a female chief executive officer,” she said.

“Gender equality at all levels of society is crucial for Europe’s economic recovery. Studies suggest that companies with higher female representation at the most senior levels deliver better organizational and financial results. Gender diversity in the boardroom is shown to lead to innovative ideas, increased competitiveness and performance, and improved corporate governance. More women in leadership positions also signals to the outside world that a company understands the complexity of world markets and is prepared to compete at the global level.”

Vera says it is important the European Union takes advantage of everybody’s skills, regardless of age or gender, in order to maintain growth in the economy.

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“We cannot afford this systematic gender imbalance at the top levels of economic decision-making. It is a waste of talent and resources. It is my priority to break down the barriers that women face in their professional lives, and to increase the representation of women in business leadership. Gender equality is not an option, it is not a luxury, it is an imperative and it is a competitive advantage. That is why Europe needs strong rules to tackle the gender imbalance in company boardrooms.”

The new law they are proposing would mandate 40% of board positions would go to the under-represented sex, and they plan to achieve this by 2020. She makes it clear that of course qualification and merit remain key criteria for choosing candidates, but this new legislation also allows for fairness and greater transparency when it comes to board selections.

The move is similar to that of the new Frauenquote law in Germany, spearheaded by Chancellor Angela Merkel. Their law, which comes into full effect in 2016, states that companies listed on the DSX (German Stock Exchange) must implement a minimum of 30% female board members, and if they can’t find viable candidates, the seat will be left empty until they can.

Critics claim the Frauenquote law and others like it force companies to abandon quality in favor or gender equality, but that is simply a cowardly way out. Others however say it should not be a law, but rather a voluntary measure. But like we’ve said before, up until now the idea of choosing more women on boards HAS been voluntary, and nothing has changed! So now it has to be a legislative measure, not just to even out the scales, but in order to ensure economic growth, not regression.

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Japan is another country that is recognizing their desperate need of women in the workplace. Faced with an increased aging population, Prime Minster Abe Shinzo has outlined a plan for “womenomics” as he calls it, which allows greater flexibilities for families and paternity leave, in order to ensure that women have greater incentives to join and stay in the work force.

According to Vera Jourova, the figures show that regulatory measures do work.

“Since the commission proposed a law, cracks in the glass ceiling have started to show. More and more companies are competing to attract the best female talent. Since October 2010, the share of women on boards has risen by 7.6 per cent.”

In October she held a conference in Vienna, Austria, on how to raise awareness of gender quality in Europe. Women on boards, quotas and parental leave were some of the points in the agenda and were also discussed in smaller workshops.

“Equal representation on corporate boards is well overdue,” said Vera. “We should now rise to the challenge and make swift progress on this draft law, which places qualification and merit centre stage. At the same time, this step towards gender equality will be a big leap forward for the competitiveness of European business.”

Here’s to global economic growth recognizing that women are a key component!

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