EU leads the world in representation of women on corporate boards

Equal rights legislation is largely seen as the best means of ensuring a more diverse workforce. However, when it comes to reaching the higher echelons of corporate life, opinion is divided on whether imposing mandatory quotas could do more harm than good in promoting gender equality. 2013 saw the highest change recorded to date in the average number of women on the boards of large EU corporations – due in part to the introduction of mandatory quotas. Although the third edition of “Breaking the Glass Ceiling: Women in the Boardroom,” from global law firm Paul Hastings LLP, found strong consensus in many countries to support women candidates, the debate over the best approach to increase representation continues.

The EU leads the way on reaching gender parity on corporate boards, but several EU countries are opting for other policies besides mandatory quotas to address the gender gap. Austria, Denmark, Finland, the United Kingdom, and Sweden have all instituted legislation and corporate codes that allow companies to set their own targets and policies.

Global efforts by corporations and governments have increased the number of women on corporate boards, but there is still significant room for improvement finds the 2013 edition of the report, which examines the legislative, regulatory, and private sector developments and trends of female representation on corporate boards in 35 countries.

“The issue of gender parity on corporate boards continues to garner increased attention around the world,” said Tara Giunta, Paul Hastings Litigation partner and Editor of the report. “While it is increasingly becoming a key focus for both governments and the global business community at large, there is still much debate about the best strategies to close the gap and level the playing field. Paul Hastings’ report is intended to draw attention to the diverse approaches taken in various countries, spark new ideas and discussion, and to further help advance the issue,” she added.

Other key findings of the report include:

• China’s legislative efforts have begun to bear results. More than 50 cities in Mainland China have adopted local rules implementing 2011 legislation that requires an increase in representation of women on the boards of public and private companies.
• India is also addressing the issue with legislation. The lower house of the Indian Parliament recently passed a bill, which is expected to become law, which requires a certain class of companies to have at least one woman director.
• The United States and Canada have seen only marginal growth in the number of female board members year-over-year; however discourse on the subject has increased and has centred predominantly on private sector initiatives.
• Australia and New Zealand have each adopted reporting requirements that highlight corporate boards’ gender composition. In Australia, new legislation requires private companies with 80 or more employees to report annually on specific gender equality indicators. The legislation includes sanctions for non-compliant companies. New Zealand’s NZSX/NZDX Listing Rules require listed companies to provide a breakdown of the gender composition of their directors and officers.

The report also provides updates on notable developments over the past 12 months, a chart of corporate governance codes for the countries surveyed, and an interactive website that includes video interviews with those who are making important contributions to the issue.