Justice

Tackling the gender pay gap in the European Union

Gender Pay Gap Websitehttp://ec.europa.eu/equalpay

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Gender Pay Gap Websitehttp://ec.europa.eu/equalpay

More information on the European Union is available on the Internet (http://europa.eu).

Luxembourg: Publications Office of the European Union, 2014

ISBN 978-92-79-36068-8 doi:10.2838/42323

European Union, 2014 Reproduction is authorised provided the source is acknowledged.

Printed in Belgium

Table of contents

What is the gender pay gap? 2

What are the main causes of the gender pay gap? 5

What are the benefits of closing the gender pay gap? 8

Map of the gender pay gap in EU-28 10

What is the EU doing? 13

How to close the gender pay gap at national level? 17

References and further information 23

What is the gender pay gap? The gender pay gap is the difference between mens and womens pay, based on the average difference in gross hourly earnings of all employees.

On average, women in the EU earn around 16 % less per hour than men 1. The gender pay gap varies across Europe. It is below 10 % in Slovenia, Malta, Poland, Italy, Luxembourg and Romania, but wider than 20 % in Hungary, Slovakia, Czech Republic, Germany, Austria and Estonia 2. Although the overall gender pay gap has narrowed in the last decade, in some countries the national gender pay gap has actually been widening (Hungary, Portugal).

The gender pay gap exists even though women do better at school and university than men. On average, in 2012, 83 % of young women reach at least upper secondary school education in the EU, compared to 77.6 % of men. Women also represent 60 % of univer-sity graduates in the EU 3.

What is the effect of the gender pay gap over a lifetime?The impact of the gender pay gap means that women earn less over their lifetimes; this results in lower pensions and a risk of poverty in old age. In 2012, 21.7 % of women aged 65 and over were at risk of poverty, compared to 16.3 % of men 4.

What are the differences between how women and men work?The overall employment rate for women in Europe is around 63 %, compared to around 75 % for men aged 20-64.

Women are the majority of part-time workers in the EU, with 34.9 % of women working part-time against only 8.6 % of men 5. This has a negative impact on career progression, training opportunities, pension rights and unemployment benefits, all of which affect the gender pay gap.

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How is the gender pay gap measured in the EU?The gender pay gap is shown as a percentage of mens earnings and represents the difference between the average gross hourly earnings of male and female employ-ees. Gross earnings are wages or salaries paid directly to an employee before any deductions for income tax and social security contributions are made. In the EU, data on the gender pay gap is based on the methodology of the Structure of Earnings Survey (SES).

In the EU, the gender pay gap is referred to officially as the unadjusted gender pay gap, as it does not take into account all of the factors that impact on the gender pay gap, such as differences in education, labour market experience, hours worked, type of job, etc.

Using hourly pay as a basis for calculating the gender pay gap can also mask spe-cific differences in pay that go unrecorded, for example, bonus payments, perfor-mance-related pay or seasonal payments.

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BOY OR GIRL, EQUAL OPPORTUNITIES?

These babies are born with equal opportunities, but the educational and career expectations for

boys and girls are different. By the time they grow up, the boy will be earning on average

around 16 % more than the girl.

What are the main causes of the gender pay gap?The gender pay gap is a complex issue caused by a number of interrelated factors.It still exists today due to wider gender inequalities across the economy and in society.

Discrimination in the workplaceIn certain cases, women and men are not paid the same wages although they carry out the same work or work of equal value. This may be the result of so-called direct discrim-ination where women are simply treated less favourably than men. Or it may be due to a policy or practice that, although not designed to discriminate, results in unequal treat-ment between men and women. Both types of discrimination are prohibited under EU law, but are unfortunately still present in some workplaces.

Different jobs, different sectorsWomen and men carry out different jobs and often work in different sectors. In the health sector, women make up 80 % of all workers. Sectors where women are in the majority have lower wages than those dominated by men.

As women bear the burden of unpaid work and childcare they tend to work shorter hours. They also generally work in sectors and occupations where jobs are compatible with their family responsibilities. As a result, women are more likely to work part-time, be employed in low-paid jobs and not take on management positions.

Workplace practices and pay systemsWomen and men are affected by different workplace practices, such as access to career development and training. Different methods of rewarding employees (for example, through bonuses, allowances and performance-related pay), as well as the actual struc-ture of pay systems, can result in different rates of pay for female and male workers. Often this discrimination arises because of historical and cultural factors that impact on how wages are set. This so-called glass ceiling prevents women from reaching the high-est paid positions.

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Undervaluing of womens work and skills Womens skills and competences are often undervalued, especially in occupations where they are in the majority. This results in lower rates of pay for women. For example, phys-ical tasks, which tend to be carried out by men, are often valued more favourably than those carried out by women. For instance, a female cashier in a supermarket earns less than a man working in the stockroom.

When women are the majority in a small number of occupations, they receive lower wages. The opposite is true for men, as the more they dominate an occupation the higher their pay. For example, where women are clustered into female dominated occupations, such as cleaning, they tend to earn less than men who have comparable skills in male dominated occupations, such as refuse collection.

Womens skills are often undervalued because they are seen to reflect female charac-teristics, rather than acquired skills and competences. For example, a female nurse earns less than a male medical technician, even though they have comparable levels of qual-ifications. This can result in a gender bias in the setting of wages and in assessing the value of the work that women do.

Few women in senior and leadership positions Women are under-represented in politics and in the economy. Only a third of scientists and engineers across Europe are women. Even in those sectors dominated by women they are under-represented in senior positions, in particular at the top level. Women only make up less than 17 % of board members in the biggest publicly-listed companies across the EU and only 4 % of the chairs of boards 6.

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Gender roles and traditionsGender roles and traditions shape womens and mens roles in society from a very early age. Traditions and gender roles may influence, for example, the choice of educational path taken by a young man or woman. These decisions are affected by traditional val-ues and assumptions about working patterns. Research shows that women in senior positions in typically feminine careers are paid substantially less than women working at the top in typically masculine careers 7.

Balancing work and family responsibilities Women work shorter hours and often part-time in order to combine their family respon-sibilities with paid work.

Opportunities for women to progress in their jobs and receive higher pay are also affected by their family responsibilities. The gender pay gap widens when women have children and when they work part-time.

Women spend more time than men carrying out domestic and care work, and few men take parental leave or work part-time. While men work longer hours than women in the workplace, if womens paid and unpaid working hours are combined they are significantly longer than mens.

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What are the benefits of closing the gender pay gap? Creating a fairer and more equal societyGreater equality between men and women would bring benefits to the economy and to society in general. Closing the gender pay gap can help to reduce levels of poverty and increase womens earnings during their lifetimes. This not only avoids the risk of women falling into poverty during their working lives, but also reduces the danger of poverty in retirement.

Supplying quality jobsWomen have rising expectations for their working lives and, if companies want to attract the best talent, equality at work is a must. It is essential to creating quality jobs and a highly-motivated workforce. Quality jobs, in turn, are crucial to building a positive work-ing environment where all workers are valued for their work.

Good for business, workers and the economyEmployers can benefit from using womens talents and skills more effectively, for exam-ple by valuing womens skills and through introducing policies on work-life balance, train-ing and career development.

Women have skills and talents that are often under-utilised in the workplace and unlock-ing these can help companies tackle skills shortages. Valuing women for the work that they do and rewarding their skills and potential fairly can improve a business perfor-mance and effectiveness, for example, by attracting and retaining the best and most talented staff and creating a positive image with customers.

Companies that build equality plans and strategies into their workplaces create the best workplaces for everyone, male or female, to work in. Having a positive working environ-ment helps a business to attract customers, improve performance and boost competi-tiveness. Workers who feel more confident and valued for the tasks they carry out are also more likely to be innovative and productive at work.

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Avoiding litigation and complaintsEnsuring that employees receive equal pay for work of an equal value in an organisation means that employers avoid complaints being made about discrimination and unfair work practices. This prevents time and money being spent on dealing with complaints and any subsequent litigation.

A basis for economic growth and recoveryDuring the financial and economic crisis, womens participation in the economy and their contribution to family finances have increased. It is therefore important to keep the issue of gender equality and the closing of the gender pay gap alive as they contribute to achieving employment growth, competitiveness and economic recovery.

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Belgium 10 %

Luxembourg 8.6 %

United Kingdom 19.1 %

Malta 6.1 %

Spain 17.8 %

Portugal 15.7 %

Germany 22.4 %

Denmark 14.9 %Ireland 14.4 %

Netherlands 16.9 %

France 14.8 %

Map of the gender pay gap in EU-28

Across the EU economy women earn on average around 16.4 % less than men.

Source: Eurostat 2012 except for EL (2010).

Luxembourg 8.6 %Czech Republic 22 %

Slovakia 21.5 %

Hungary 20.1 %

Malta 6.1 %

Romania 9.7 %

Bulgaria 14.7 %

Italy 6.7 %

Germany 22.4 %

Denmark 14.9 %

Croatia 18 %

Greece 15 %

Cyprus 16.2 %

Netherlands 16.9 %

Austria 23.4 %

Slovenia 2.5 %

Poland 6.4 %

Latvia 13.8 %

Lithuania 12.6 %

Estonia 30 %

Finland 19.4 %

Sweden 15.9 %

IS OUR WORK VALUED THE SAME?

Women have as good or better qualifications than men, but often their skills are not as valued

as mens and their career progression is slower. This results in an average gender pay gap

of around 16 % in the European Union.

What is the EU doing? Closing the gender pay gap has long been a priority for the EU. The EUs pledge to close the gap dates back to the Treaty of Rome in 1957. Today a legal basis for EU action exists under the Treaty of Lisbon, together with the commitment to gender equality found in the Charter of Fundamental Rights. EU action also seeks to change attitudes to gen-der roles in schools, in the home, in the workplace and in society in general.

Gender equality and making better use of womens talents and skills are central to clos-ing the gender pay gap and to achieving the objectives of the Europe 2020 Strategy, the EUs growth strategy for this decade. The Strategy aims to create more and better jobs, to achieve a higher employment rate for women as part of the overall employment tar-get of 75 % for all 20-64 year-olds, and to ensure that there are 20 million fewer people in or at risk of poverty and social exclusion by 2020.

Reducing the gender pay gap is a priority identified in a range of policy areas. For example: The European Pact for Gender Equality which was adopted by EU leaders in 2011; The framework of actions on gender equality agreed between the European social

partners in 2005.

Communication on the gender pay gap, 2007The European Commissions 2007 Communication on the gender pay gap proposed a series of actions to tackle the gender pay gap. These included the better application of existing legislation, fighting the gender pay gap in employment policies, promoting equal pay among employers and through social partnership, and supporting the exchange of good practices across the EU.

Strategy for equality between women and men, 2010-2015Closing the gender pay gap through legislative and non-legislative measures is a core objective of the European Commissions Strategy for equality between women and men (2010-2015). The Strategy sets out actions in five areas: the economy and labour mar-ket; equal pay; equality in senior positions; tackling gender violence; and promoting equal-ity beyond the EU.

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Directive on Equal Pay for Work of Equal Value8 The principle of equal pay for equal work or work of equal value has been enshrined in Treaties since 1957 and is incorporated in the Directive 2006/54/EC (Recast Directive).

One of the Commissions priorities for the coming years will be to monitor the correct application and enforcement of the equal pay provisions of the Directive 2006/54/EC

and to support employees, Member States and other stakeholders by providing guidance on the proper enforcement and application of the existing rules. In this context, the Com-mission published in December 2013 a report 9 on the application of the Directive 2006/54/EC.

This report focusses in particular on assessing the application of the provisions on equal pay in practice. It includes an overview of the landmark EU case-law on equal pay. It also includes a section on job classification schemes and examples of national actions 10.

Equality Pays OffTo support employers in their efforts to tackle the gender pay gap, the Commission carried out the Equality Pays Off project during 2012 and 2013. Its aim was to raise companies awareness of the business case for gender equality and equal pay, that is, better access to the labour force potential of women in a context of demographic changes and skill shortages.

A total of 39 events (national workshops in 34 countries, a Business Forum on 21 March 2013, 4 trainings on equal pay) were organised. Supporting material (training manuals, good prac-tice handbooks, information material) was produced. Big companies and stakeholders (Euro-pean and national social partners, business associations, national authorities and experts) participated in the various actions.

A website with further information on this initiative is available 11.

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European Equal Pay DayOn 5 March 2011 the European Commission launched the first European Equal Pay Day. The second one was held on 2 March 2012 and the third one took place on 28 February 2013. In 2014, the European Equal Pay Day was marked on 28 of Feb-ruary. The European Equal Pay Day is an annual event to raise awareness of the fact that a wage gap between women and men still exists and that women need to work longer than men to earn the same. Its date varies every year depending on the aver-age EU gender pay gap. The change in the European Equal Pay Day represents a slight reduction of the gender pay gap.

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WILL HAVING A CHILD HARM MY CAREER?

As family responsibilities are not equally shared, women have more frequent career breaks and

work shorter hours than men. This results in less financially rewarding careers: women earn on

average around 16 % less than men.

How to close the gender pay gap at national level?Finding a solution to the gender pay gap is mainly in the hands of national governments and the social partners. The EU can help, but solutions should be developed at national level. Public opinion in the EU Member States also has an important role to play. National governments and the social partners have adopted a wide range of measures to close the gender pay gap. Some examples can be found below.

Strategies on gender equality and equal paySeveral countries have introduced strategies on gender equality, which include provisions to help close the gender pay gap. For example: In Estonia, an action plan to reduce the gender pay gap was approved in 2012. There

are five main streams of actions: 1) improving the implementation of the existing Gender Equality Act (e.g. improvement of the collection of statistics, awareness rais-ing, support of the work of the Gender Equality and Equal Treatment Commissioner etc.), 2) improving the family, work and private life reconciliation (e.g. work with employers); 3) promoting gender mainstreaming, especially in the field of education; 4) reducing the gender segregation; 5) analysing the organizational practices and pay systems in the public sector, improving the situation where necessary. It is empha-sized that the gender pay gap is a complex issue and there is a need to implement simultaneous measures in all relevant fields 12. In Finland the tripartite Equal Pay Programme for 2006-2015 13 aims to reduce the

gender gap from around 20 % to 15 % and to implement the principle of equal pay for work of equal value. The programme includes actions on desegregation, the devel-opment of pay systems, measures to support womens careers, and calls for the social partners to establish agreements to reduce the pay gap. In Portugal, the 4th Plan for Equality includes among its objectives the reduction of

gender pay gaps and the introduction of equality plans within enterprises 14. In Lithuania, the gender equality policies are set out in the National Programme on Equal

Opportunities for Women and Men for 2010-2014. A considerable number of measures are targeted towards improving the situation for women and men in the labour market. One of the priorities is reducing the gender pay gap, which includes actions to increase salaries in female-dominated sectors such as education, arts and culture and social work 15.

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Gender equality reportsSome countries have implemented reports of inquiry into the gender pay gap. For example: Since 2007 the Belgian government has published yearly the report The gender wage

gap in Belgium 16, produced by the Institute for equality between women and men, presenting statistics in line with official European indicators.

Gender equality plans in companies and audits to reduce the gender pay gapGender equality plans and audits enable companies to measure their progress in imple-menting gender equality and equal pay. In some cases there is a legislative requirement to carry out the plans, while in others it is voluntary. For example: In Sweden, the 2009 Discrimination Act 17 requires employers and employees to

endeavour to equalise and prevent differences in pay and other terms of employ-ment between women and men who perform work which is to be regarded as equal or of equal value. They are also supposed to promote equal pay growth opportuni-ties for women and men. Finally, the Act requires employers to carry out a pay sur-vey every three years in order to detect, remedy, and prevent unjustified differences between women and mens pay, terms and conditions of employment, and draw up an equal pay action plan (if employing 25 or more workers). In Austria, the National Action Plan for Gender Equality in the Labour Market18 includes

a compulsory requirement for companies to publish equal pay reports. Companies have to draw up staff income reports every two years. The reports must show the number of men and women classified under each category as well as the average or median income, adjusted for working time, for women and men in the respective category. The goal is to create income transparency and take measures to reduce gender pay gaps. The equal pay reports are compulsory for companies with more than 1 000 employees from 2011 for the year 2010, for companies with more than 500 employees since 2012, for companies with more than 250 employees in 2013 and with more than 150 employees in 2014 19. On 22 April 2012 Belgium adopted a law on reducing the gender pay gap. According

to this law, differences in pay and labour costs between men and women should be outlined in companies annual audit (bilan social). These annual audits will be trans-mitted to the national bank and this information will be publicly available. Moreover, the law stipulates that every two years firms with over 50 workers should establish a comparative analysis of the wage structure of female and male employees. If this analysis shows that women earn less than men the firm will be obliged to produce

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an action plan. Finally, in case discrimination is suspected, women can turn to their firms mediator who will establish whether there is indeed a pay differential and if so, will try to find a compromise with the employer 20.

Specific legislation and collective agreementsSome countries have introduced provisions relating to pay transparency or collective agreements and equal pay. For example: In Portugal, almost all employers are obliged to annually collect information on the

Personnel Records of the enterprise to the Ministry responsible for labour and employ-ment regarding several aspects of their working conditions, among them, remunera-tions. The Personnel Records are submitted to the labour inspection authorities (ACT); trade unions or workers committees (upon request in due time); employer represent-atives present in the Standing Committee for Social Dialogue (CPCS). Before this the Personnel Records must be made available to the employees. The Council of Minis-ters approved a Resolution on 8 March 2013 21 deciding to approve some measures in order to guarantee and promote equality of opportunity and results between women and men in the labour market, including what concerns the elimination of wage gaps. The measures include the development and dissemination of a report on the wage gender gaps by industry. In France, the 2006 Act on Equal Pay between Women and Men 22 makes provision

for compulsory collective bargaining on gender equality and requires companies to report on salaries and plans to close the gender pay gap. The French government has hardened existing sanctions against firms with 50 employees and above that do not respect their obligations regarding gender equality 23. For the first time, two firms have been condemned in April 2013 for not complying to the legislation on equal pay.

Tools to make pay systems transparent and identify the gender pay gapTransparent pay systems are a crucial factor in implementing equal pay. Tools exist to help ensure this. For example: An online tool, Logib, has been developed in Germany 24, Luxembourg 25 and Switzer-

land 26 to enable companies to analyse pay and staffing structures and verify if equal pay exists between male and female employees. Reports analyzing the reasons and proposal of actions to tackle the gender pay gap are also foreseen with this tool. In Austria, a Wage and salary calculator has been set up which provides up-to-date

and easily accessible information about pay customary in a sector/place. It started

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in October 201127. The wage and salary calculator is part of the National Action Plan for Gender Equality in the Labour Market.

Equal Pay Days28Many countries hold regular Equal Pay Days. The Business and Professional Women Asso-ciation 29 is behind the organization of many of them. Activities include handing out infor-mation on the gender pay gap, organizing events, and holding meetings with government representatives. Some examples: Belgium was the first country in Europe to organize an Equal Pay Day in 2005. The

three largest trade unions have been organising Equal Pay Days in recent years. They use humorous poster campaigns, radio and TV commercials, banners, buttons, flyers, a dedicated website, the use of social media, video clips, etc. In 2013, Equal Pay Day celebrated its ninth edition 30. In the Czech Republic, an Equal Pay Day has been organized by Business and Profes-

sional Women (BPW) since 2010. The 4th Equal Pay Day in the Czech Republic took place on 24 April 2013. An experts conference and a mentoring activity were held, where 31 entrepreneurs and managers passed on their experience to about 600 young women. During the whole day the traditional red bag with the logo of the event was handed out 31. In Estonia, the National Equal Pay Day 2013 was celebrated on 11 April. The main

promoter of activities is Business and Professional Women-Estonia. The traditional action focused on serving salmon meals with or without dill for different prices, dem-onstrating the gender pay gap in Estonia, will remain the same, with a special focus on young people and employers. The BPW is also planning to continue collecting peo-ples opinions and experiences, with a specific focus on transparent and fair wage systems, which is the main message of the whole campaign in 2013 32. In Spain, the Equal Pay Day takes place on 22 of February. An institutional logo was

created by the Ministry responsible for equality and non-discrimination policies. In commemoration of this date, lottery tickets reproducing this logo have been produced for the occasion. In addition, specific post stamps have been circulated on 22 Febru-ary to support the national Equal Pay Day 33.

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Guidance to understand and apply the principle of equal pay. Job evaluation/job classification methods free from gender biasJob evaluation free from gender bias is very important to ensure that work carried out by women and men is of an equal value. For example: In Portugal, a method for job evaluation free from gender bias has been produced in

the hotel and restaurant sector as part of the project Revalue work to promote gen-der equality. This has enabled jobs that are male dominated and jobs that are female dominated to be evaluated and compared in order to determine whether the gender pay gap is a result of the unfair valuing of womens work and discrimination. A guide 34 to applying job evaluation free from gender bias has also been produced as well as a training handbook 35. In 2011, the United Kingdom published the Statutory Code of Practice on equal pay 36,

a technical guide to illustrate where and how legislation on equal pay can be brought to bear in real-life situations. It is a tool mainly addressed to lawyers, human resources personnel, courts and tribunals.

Equality labels, charters and awards In 2010 the European Commission published a study containing an inventory of these non-legislative instruments to promote gender equality in companies in Europe 37. Some of these instruments take into account the gender pay gap as a factor. Switzerland pro-vides the clearest example of a specific company certificate on the gender pay gap: In Switzerland companies can be awarded an equal pay logo if they show they have

implemented a fair wage policy between women and men 38.

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BOY OR GIRL, EQUAL OPPORTUNITIES?

These babies are born with equal opportunities, but the educational and career expectations for boys and girls are different. By the time they grow up, the boy will be earning on average 17.5 % more

than the girl.

SAME JOB, SAME PENSION?Womens earnings over a lifetime are on

average around 16 % lower than mens. When women retire these lower earnings result in lower pensions. This leads to more women than men experiencing poverty in old age.

References and further information 1 The EU gender pay gap was 17.3 % in 2008. The last available data for 2011 is 16.2 %.

2 The data on the gender pay gap is based on the Structure of Earnings Survey (SES) methodology

which is carried out every four years by Eurostat.

http://epp.eurostat.ec.europa.eu/cache/ITY_SDDS/en/earn_grgpg2_esms.htm

3 Eurostat, 2010.

4 Eurostat, 2012.

5 Eurostat, 2012.

6 Data from April 2013. European Commissions database on women and men in decision-making:

http://ec.europa.eu/justice/gender-equality/gender-decision-making/database/index_en.htm

7 Busch A and Holst E, 2011 Gender Specific Occupational Segregation, Glass Ceiling Effects

and Earnings in Managerial Positions, German Institute for Economic Research.

8 Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the

implementation of the principle of equal opportunities and equal treatment of men and women

in matters of employment and occupation (recast); OJ L 204, 26.7.2006, p. 23-36.

9 COM(2013) 861 Final.

10 SWD(2013) 512 Final.

11 http://ec.europa.eu/justice/gender-equality/equality-pays-off/

12 http://www.sm.ee/tegevus/sooline-vordoiguslikkus/tooelu/palgalohe-tegevuskava.html

13 http://www.stm.fi/tasa-arvo/samapalkkaisuus;jsessionid=74f5cb85735614e13d29dca0d60c

14 http://www.cite.gov.pt/asstscite/downloads/IV_PNI_2011_2013.pdf

15 http://www3.lrs.lt/pls/inter3/dokpaieska.showdoc_l?p_id=372298&p_query=&p_tr2=

16 Institute for the equality of women and men, Belgium: http://igvm-iefh.belgium.be/

17 http://www.regeringen.se/content/1/c6/11/59/03/b463d1e1.pdf

18 http://www.bka.gv.at/DocView.axd?CobId=42528

19 http://www.frauen.bka.gv.at

20 http://www.ejustice.just.fgov.be/mopdf/2012/08/28_1.pdf

21 https://dre.pt/pdfgratis/2013/03/04800.pdf

22 http://www.legifrance.gouv.fr/

affichTexte.do?cidTexte=JORFTEXT000000816849&dateTexte=&categorieLien=id

23

23 http://legifrance.gouv.fr/affichTexte.do?cidTexte=JORFTEXT000026792583&categorieLien=id

24 Logib-d tool, Germany: http://www.logib-d.de

25 Logib tool, Luxembourg: http://www.mega.public.lu/actions_projets/ecart_salaire/

26 Logib tool, Switzerland:

http://www.ebg.admin.ch/dienstleistungen/00017/index.html?lang=en

27 http://www.gehaltsrechner.gv.at

28 Equal Pay Days in the EU:

http://ec.europa.eu/justice/gender-equality/gender-pay-gap/national-action/equal-pay-days

29 http://www.bpw-europe.org/equal-pay-day

30 Belgium: http://www.equalpayday.be/

31 Czech Republic: http://www.equalpayday.cz/

32 Estonia: http://www.bpw-estonia.ee/tilliga-ja-tillita

33 Spain: http://www.msssi.gob.es/novedades/docs/2013_02_22_Nota_informativa.pdf

34 http://www.cite.gov.pt/asstscite/downloads/guia_revalorizar_en.pdf

35 http://www.cite.gov.pt/asstscite/downloads/referencial_revalorizar_en.pdf

36 http://www.equalityhumanrights.com/uploaded_files/EqualityAct/equalpaycode.pdf

37 Study on non-legislative initiatives for companies to promote gender equality at the workplace:

http://ec.europa.eu/social/BlobServlet?docId=5364&langId=en

http://ec.europa.eu/social/BlobServlet?docId=5366&langId=en

http://ec.europa.eu/justice/gender-equality/files/gender_pay_gap/database_version2_en.mdb

38 Switzerland: http://www.equalsalary.org/

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Gender Pay Gap Websitehttp://ec.europa.eu/equalpay

European Commission Directorate-General for Justice

Tackling the gender pay gap in the European Union

Luxembourg: Publications Office of the European Union

2014 24 pp. 14.8 21 cm

ISBN 978-92-79-36068-8 doi:10.2838/42323

Gender Pay Gap Websitehttp://ec.europa.eu/equalpay

DS-02-14-189-EN

-N

ISBN 978-92-79-36068-8 doi:10.2838/42323

Women and men in leadership positions in the European Union, 2013

A review of the situation

and recent progress

Justice

DS-02-13-142-EN

-N

doi: 10.2838/50821

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European Commission - Directorate-General for Justice

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European Union, 2013

ISBN: 978-92-79-30565-8

doi: 10.2838/50821

Reproduction is authorised provided the source is acknowledged.

Printed in Belgium

European Commission - Directorate-General for JusticeWomen and men in leadership positions in the European Union, 2013

Luxembourg: Publications Office of the European Union2013 40 pp. 2129.7 cm

ISBN: 978-92-79-30565-8

doi: 10.2838/50821

Neither the European Commission nor any person acting on behalf of the Commission may be held responsible for the use that may be made of the information contained in this publication.

Women and men in leadership positions in the European Union 2013

A review of the situation and recent progress

Published October 2013 Data to end-June 2013

1

Table of contents Introduction ................................................................................................................................................................................................................ 3

1 Economic decision-making: accelerated progress following regulatory pressure .......................................................... 5

1.1 Company boards: the latest situation and trends................................................................................................................................ 5

1.2 Actions to bring about change .................................................................................................................................................................... 12

1.3 Central banks and EU financial institutions: more efforts are needed .................................................................................. 16

2 Politics: slow progress .......................................................................................................................................................................... 19

2.1 European Council: a long way to go ......................................................................................................................................................... 19

2.2 European Commission: representation of women increasing .................................................................................................... 19

2.3 National governments ..................................................................................................................................................................................... 20

2.4 National, regional and local assemblies ................................................................................................................................................ 22

2.5 European Parliament: 2014 is an opportunity ................................................................................................................................... 28

3 Public administrations: some cause for optimism ................................................................................................................... 31

3.1 National public administrations: edging closer to gender balance .......................................................................................... 31

3.2 Promoting gender balance in the European Commission ............................................................................................................. 33

4 Judiciary: gradual improvement....................................................................................................................................................... 34

4.1 National supreme courts: considerable variation between countries .................................................................................... 34

4.2 European courts: little change over the past decade ..................................................................................................................... 36

Conclusion ................................................................................................................................................................................................................ 37

Annexes..................................................................................................................................................................................................................... 38

A.1 Country codes ....................................................................................................................................................................................................... 38

A.2 Companies data: sample size by country ............................................................................................................................................. 38

List of figures

Figure 1 - Representation of women and men on the boards of large listed companies, April 2013 ....................................... 6

Figure 2 - Share of women on the boards of large listed companies, EU-27, 2010-2013 ............................................................. 7

Figure 3 - Change in the share of women on boards by country, October 2010 - April 2013 ....................................................... 8

Figure 4 - Change in the share of women on boards by country, October 2012 - April 2013 ....................................................... 9

Figure 5 - Share of women amongst non-executive directors and senior executives of large listed companies, April 2013 ............................................................................................................................................................................................................................................. 10

Figure 6 - Distribution of companies by number of women on the board, EU-27, 2010 and 2013 ........................................ 11

Figure 7 - Distribution of companies by number of women on the board by country, April 2013 ............................................ 11

Figure 8 - Representation of men and women in national central banks, 2013 ................................................................................ 16

Figure 9 - Share of women in the decision-making bodies of national central banks, EU-27, 2003-2013 ........................ 17

Figure 10 - Representation of women in governing boards of European financial institutions, 2003-2013...................... 17

Figure 11 - Representation of women in the European Council, 2009-2013 ...................................................................................... 19

Figure 12 - Representation of women in European Commission over the last 25 years ............................................................... 19

Figure 13 - Representation of women and men in national governments (senior ministers), 2013 ....................................... 20

Figure 14 - Representation of women in national governments (senior ministers), EU-27, 2004-2013 .............................. 20

2

Figure 15 - Distribution of men and women in government by type of portfolio, EU-27, 2013 ................................................ 21

Figure 16 - Share of women senior government ministers by type of portfolio, EU-27, 2004 and 2013............................ 21

Figure 17 Share of women in national parliaments (single/lower house) in the EU, 2003-2013 ......................................... 22

Figure 18 - Representation of women and men in national parliaments (single/lower house), 2013 .................................... 22

Figure 19 - Representation of women in local councils (2011) and regional assemblies (2012)............................................. 23

Figure 20 - Changes in the representation of women in national parliaments, 2003* - 2013 .................................................. 25

Figure 21 - Average changes in the representation of women in national parliaments 2003-2013 by type of quota 25

Figure 22 - Representation of women and men in the European Parliament, 2013 ........................................................................ 29

Figure 23 - Representation of women and men in the European Parliament, 1979-2014 .......................................................... 30

Figure 24 - Share of women in the top two levels of (non-political) administrators in national administrations, EU-27, 2003-2012 ............................................................................................................................................................................................................................... 31

Figure 25 - Share of women in the top two levels of (non-political) administrators in national administrations, 2012 ......................................................................................................................................................................................................................................................... 32

Figure 26 - Share of women judges in national supreme courts across the EU, 2003-2012 ..................................................... 34

Figure 27 - Representation of women and men amongst judges of national supreme courts, 2012 .................................... 35

Figure 28 - Gender imbalance amongst presidents of top courts and public prosecutors, EU-27, 2012 ............................. 35

Figure 29 - Share of women judges in courts with jurisdiction at European level, 2003-2013 ................................................. 36

List of tables

Table 1 - Overview of some of the key drivers of progress since 2010 ..................................................................................................... 8

Table 2 - Share of women amongst board chairs and CEOs of large companies, April 2013 .................................................... 12

Table 3 - Share of women leaders of major political parties, 2012 ......................................................................................................... 23

Table 4 - OSCE six-point plan for gender equality in elected office .......................................................................................................... 24

Table 5 - Summary of legislative quotas currently applicable to the nomination of candidates for parliamentary elections ...................................................................................................................................................................................................................................... 26

Table 6 - Political bodies within the European Parliament ............................................................................................................................. 30

Table 7 - Representation of women at three levels of European Commission ................................................................................... 33

3

Introduction Equality between women and men is enshrined in the EU Treaties and the EU Charter of Fundamental Rights as a fundamental principle of the European Union (EU). Ensuring gender equality is one of the EU's main objectives and tasks1. It is also a necessary condition for the achievement of the objectives of the Europe 2020 strategy the EUs

growth strategy, which leans on knowledge, competences and innovation. Despite significant progress during the last decades thanks to regulatory pressure, gender inequalities persist in leadership positions and the pace of change is slow in many Member States. In response, the European Commission has reaffirmed its commitment to work to improve the situation by making gender equality in decision-making one of the five priority areas in both the Womens Charter2 and the Strategy for Equality between Women and Men (2010-2015)3.

Women are particularly outnumbered by men in leadership positions in the corporate sector and this has been the focus of intense public debate initiated by the European Commission at EU level and in a number of Member States. Indeed, the under-utilisation of the skills of highly qualified and experienced women constitutes a loss of economic growth potential. Research from various countries suggests that companies with a higher representation of women at the most senior levels deliver stronger organisational and financial performance as well as better corporate governance. Moreover, the lack of women in leadership positions means that female talent is being underused, human capital wasted and the quality of appointments to the highest positions may be compromised.

In April 2013, women accounted for 16.6% of board members of large publicly listed companies in the 27 EU Member States4. This represents encouraging progress the share of women has risen by an estimated 2.3

percentage points in 12 months5 and nearly 5 percentage points since October 2010 (11.8%), one month after the

European Commission first announced that it was considering targeted initiatives to get more women into decision-making positions. Nevertheless, nearly one in four large listed companies still has no female representatives at board level and the rate of change is still some way below that required to reach a target of at least 40% of each gender by 2020.

Recognising the many benefits associated with having gender balance on company boards, including economic ones, a number of national governments have taken initiatives and in some cases legislative measures to encourage or enforce change. Across Europe, social partners, individual companies and other relevant stakeholders are also working to facilitate and support the recognition and development of womens talents, and to break down the barriers that limit their access to leadership positions. Notwithstanding these efforts, the rate of change in most Member States has been slow, which indicates that there is insufficient commitment and that self-regulation does not bring about substantial and rapid change. Hence, following an extensive public consultation6, the European

Commission - with the strong support of the European Parliament and a number of Member States - has decided to take legislative action at EU level. The European Economic and Social Committee7 and the Committee of Regions8

have also backed this initiative.

On 14 November 2012 the European Commission put forward a proposal for a Directive on improving the gender balance among non-executive directors of companies listed on stock exchanges (see section 1.2). This proposal is

the culmination of a series of initiatives taken by the Commission to monitor the situation, to raise awareness of the inequalities that exist and of the economic and business case for gender diversity in leadership, to stimulate high-level public debate, and to encourage companies and Member States to take action9.

This report is produced in the context of the Commissions commitment to monitor the current situation and trends in the participation of women and men in high-level decision-making positions. It aims to highlight the gender gaps that remain in leadership positions but also to show the progress that is being made to reduce them. It includes

1 Article 2 and Article 3(3) of the Treaty on European Union and Article 8 of the Treaty on the Functioning of the European Union.

2 http://ec.europa.eu/commission_2010-2014/president/news/documents/pdf/20100305_1_en.pdf

3 http://ec.europa.eu/justice/gender-equality/document/index_en.htm

4 Situation prior to the accession of Croatia on 1 July 2013

5 This figure is calculated from the average monthly change between January 2012 (13.7%) and April 2013 (16.6%).

6 http://ec.europa.eu/justice/newsroom/gender-equality/opinion/120528_en.htm

7 Official Journal of the European Union C 133/68, 9 May 2013: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:133:FULL:EN:PDF

8 ECOS-V/039. See http://www.toad.cor.europa.eu/AgendaDocuments.aspx?pmi=ha5jDW%2BOWSGA9v5ptBX3MbEqXkLHPBxNdLxAYnYqvwQ%3D&ViewDoc=true

9 See http://ec.europa.eu/justice/gender-equality/gender-decision-making/index_en.htm

4

examples of action taken by governments, business and other stakeholders to boost the participation of women in leadership positions.

Section one provides an update of progress on the participation of women and men on the boards of major publicly listed companies in the EU based on the most recent figures (April, 2013) and how this has changed over recent years. This builds on the Commissions progress report published in 201210 and earlier reviews11. The section also

investigates the gender balance in the key decision-making bodies of national central banks and the EU financial institutions.

Section two deals with politics and considers the composition of governments and elected assemblies in Member States and in European institutions and recent trends in the representation of women and men. Section three reviews the gender balance in public administrations at the national level and in the European Commission. Section four looks at the representation of women and men in the judiciary, considering the gender balance amongst senior judges in the highest national courts and in European courts.

The report is, as far as possible, based on quantitative analysis of the situation with the majority of data being drawn from the European Commission database on women and men in decision-making, which is freely available for online consultation12. The database includes comparable data for EU Member States from 2003 onwards. Where

relevant, 2003 is therefore used as the starting point for analysis of developments through time.

The report was compiled and all data collected before the accession of Croatia on 1st July 2013. All EU aggregates therefore refer to the EU-27 and, where relevant, data for Croatia are grouped with those for other countries from outside the EU. The Commission database will be updated to reflect the accession of Croatia later in 2013.

10 Women in economic decision-making in the EU: Progress report, European Commission, March 2012.

11 See documents available here: http://ec.europa.eu/justice/gender-equality/document/index_en.htm#h2-5

12 http://ec.europa.eu/justice/gender-equality/gender-decision-making/database/index_en.htm

5

1 Economic decision-making: accelerated progress following regulatory pressure

Women account for 46% of people in employment across the EU13 and on average they have a higher level of

education than their male colleagues: 34% of working women have some form of tertiary level education compared to 28% of men14. Yet at the top levels of business women remain under-represented. In economic terms, this

represents a lack of return on investment that is to the detriment of companies and to the general prospects for prosperity and growth in the European Union. There is, therefore, also an economic and business case for taking action to address the situation.

A number of Member States have taken positive steps to promote gender equality in company boardrooms but the actions taken, the targets set, and the progress achieved are fragmented. The European Commission has therefore taken the lead in proposing legislation at EU level to ensure a common framework and objective to achieve gender balance (see section 1.2).

1.1 Company boards: the latest situation and trends

Methodology

Analysis in this section is based on data from the European Commission database on women and men in decision-making. The data cover publicly listed companies that are constituents of the main blue-chip index for each country and registered in the country concerned (according to the ISIN code). The blue-chip indices are maintained by the relevant stock-exchange and are typically compiled on the basis of market capitalisation or the most traded shares. The number of companies covered per country depends on the size of the index but a maximum of 50 are counted in each (e.g. for the UK the sample covers the 50 largest constituents of the FTSE-100). In the case that an index has less than ten constituents, additional companies are added (based on market capitalisation) in order to achieve, where possible, a minimum sample of ten companies for each country15. Data are collected on the following

positions:

Board members: data describing the share of women and men on company boards (e.g. Figure 1 and Figure

2) cover all members of the highest decision-making body in each company (i.e. non-executive directors,

senior executives and employee representatives, where present). The highest decision-making body is usually termed the supervisory board (in case of a two-tier governance system) or the board of directors (in a unitary system).

Executives and non-executives: data cover non-executive directors and senior executives in the two highest decision-making bodies in each company (Figure 5). The two highest decision-making bodies are usually

referred to as the supervisory board and the management board (for a two-tier governance system) and the board of directors and executive/management committee (in a unitary governance system). Note: any individual who sits in both decision-making bodies of a particular company is counted only once and employee representatives are not counted at all.

Data are collected primarily from company websites. Where information is not available or is unclear a variety of methods are used to complete the data including: direct contact with the company; websites of the relevant stock-exchange; other publicly available databases of company information.

The latest data were collected in April 2013 and cover 716 of the largest listed companies from 33 countries across Europe, 587 of which are from the 27 EU Member States.

13 Source: Eurostat, Labour Force Survey, data from 2012.

14 Ibid.

15 See Annex A.2 for a table showing the sample size for each country.

6

Gender balance in boardrooms across the EU - situation in April 2013

The most recent figures from April 2013 show that women account for just 16.6%, or one in six, of board members of the largest publicly listed companies in the EU-27 (Figure 1). The highest levels of female representation on

boards occurs in Finland (29.1%) and Latvia (29%), closely followed by France (26.8%) and Sweden (26.5%). The Netherlands, Denmark, Germany and Slovenia are the only other EU Member States to have at least 20% women on boards. That means that there are still nineteen Member States where men hold at least four out of every five board positions and in six of these - Romania, Cyprus, Estonia, Greece, Portugal, and Malta women hold less than one in ten positions.

The fact that not one EU Member State is close to the EUs 40% objective and that more than two thirds are not even half-way to meeting it, supports the case that binding measures are crucial to bring about effective change. Indeed, of the 33 European countries covered by the Commission database, the only two that have achieved gender balanced boards are Iceland and Norway, both of which have adopted legislative quotas16.

Figure 1 - Representation of women and men on the boards of large listed companies, April 2013

Source: European Commission, Database on women and men in decision-making.

Political and regulatory pressure accelerate progress

The European Commission has been monitoring the gender balance on company boards annually since 2003. Between 2003 and 2010 the share of women board members increased from 8.5% to 11.8%, an average rate of just 0.5 percentage points per year. This rate of change was unacceptably slow and without action it would have taken in excess of 50 years to reach a point where boardrooms comprised at least 40% of each gender.

In September 2010, the European Commission published its Strategy for Equality between Women and Men (2010-2015)17 and first raised the prospect of considering targeted initiatives to improve the gender balance in decision-

making. Since then, a series of Commission initiatives have brought the issue of the under-representation of women in business leadership positions to the fore of public debate and pressured Member States and companies to introduce measures to improve the situation:

In March 2011, the Commission launched the Women on the Board Pledge for Europe18 which called on

companies to voluntarily commit to targets to increase the representation of women board members.

A year later, in March 2012, the Commission published a report on progress19, which found that despite a

small improvement in the level of female representation, progress through self-regulation continued to be very limited. As a result, the report announced that policy options for targeted measures to enhance

16 In the case of Iceland, the 2010 quota law requires all publicly owned and publicly limited companies with more than 50 employees to have at least 40% of each

gender on the board by 2013. The 9 large companies covered by the Commission database have achieved this ahead of schedule.

17 http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0491:FIN:en:PDF

18 http://ec.europa.eu/commission_2010-2014/reding/womenpledge/index_en.htm

19 http://ec.europa.eu/justice/newsroom/gender-equality/opinion/files/120528/women_on_board_progress_report_en.pdf

Gender balance zone

0%

20%

40%

60%

80%

100%

29

.1%

29

.0%

26

.8%

26

.5%

23

.6%

21

.1%

20

.5%

20

.0%

19

.6%

18

.5%

18

.4%

16

.2%

15

.2%

14

.3%

13

.8%

12

.9%

12

.0%

12

.0%

10

.7%

10

.3%

10

.1%

9.1

%

8.9

%

8.1

%

7.3

%

7.1

%

2.8

%

48

.9%

41

.9%

20

.3%

19

.4%

13

.3%

9.0

%

FI LV FR SE NL DK DE SI SK UK CZ LT BG ES BE IT HU AT IE PL LU RO CY EE EL PT MT IS NO MK RS HR TR

Women Men

EU-27 average, 16.6%

7

female participation in decision-making at the European level would be explored following public consultation.

In November 2012, the Commission adopted a proposal for a Directive with an objective of 40% for the under-represented sex among non-executive directors by 2020 (see section 1.2).

This series of initiatives has contributed to significantly accelerate the rate of change. Since 2010 the share of women on boards has risen by 4.8 percentage points (pp) at an average rate of 1.9 pp/year, almost four times the long-term rate (Figure 2)

Figure 2 - Share of women on the boards of large listed companies, EU-27, 2010-2013

Source: European Commission, Database on women and men in decision-making.

When launching the Women on the Board Pledge in 2011, Commission Vice-President Viviane Reding set targets of achieving 30% of women on the boards of listed companies by 2015 and 40% by 2020. The accelerated rate of change is still some way short of what is required to reach either of those targets20. Moreover, there is an indication

that the rate of progress is slowing, strengthening the calls for legislation. The latest figure of 16.6% women on

boards in April 2013 represents an improvement of 0.9 percentage points21 in the six months since the previous

update in October 2012 or an annual equivalent rate of 1.7 pp, down from the rate of 2.2 pp between 2011 and 2012. In addition, the progress that has been made is concentrated in a few Member States.

Significant developments concentrated in a few Member States

The most significant developments over recent years have largely occurred in countries where binding legislation has already been adopted, such as France, the Netherlands and Italy, or where there has been an extensive public and media debate, such as Germany and the UK (Table 1). In fact, excluding these five countries the change between

October 2010 and April 2013 would be just half that seen for the EU as a whole (2.4 pp instead of 4.8 pp). In other words, in most of the countries where there has not been any particular action to drive change, progress has been limited (Figure 3). For example, in Sweden, Malta, Estonia and Greece the level of female representation has hardly

changed since 2010 and it has declined in Poland, Hungary, Slovakia and Romania.

20 An annual increase of around 3.5 pp would be required to achieve 40% women by 2020.

21 The share of women on boards was 15.8% in October 2012. The improvement to 16.6% is correctly reported as 0.9 percentage points rather than 0.8 because of

rounding in the underlying figures.

11.8%

13.6%13.7%

15.8%

16.6%

10%

12%

14%

16%

18%

2010 2011 2012 2013 20142010

Mar 2011 Call for self-regulation: Women on the Board Pledge for Europe

Mar 2012 Progress report: self-regulation not working

Nov 2012Legislative proposal

2011 2012 2013

Sep 2010 Strategy for Equality between Women and Men (2010-2015)

Apr 2013:

Oct 2010:

Oct 2011:

Oct 2012:

Jan 2012:

2003-2010 trend line

8

Table 1 - Overview of some of the key drivers of progress since 2010

Country Change Driver of change

France +14.4 pp Quota law that came into force on 28 January 2011 (20% by 2014 and 40% by 2017) is applicable to the boards (non-executive directors) of listed companies and non-listed companies with more than 500 employees or annual turnover of at least 50 million.

Netherlands +8.7 pp Civil code (adapted by 2011 law) obliging companies to strive for 30% of each sex on management and supervisory boards and to publish an explanation in case of failure to meet the target (comply or explain).

Italy +8.4 pp Quota law that came into force on 11 August 2011 (one third of each gender by 2015) is applicable to supervisory and management boards of listed and state-owned companies.

Germany +7.9 pp Quota law approved by the Bundesrat (upper chamber of the Parliament). Four of the five parties currently represented in the Bundestag (lower chamber of parliament), including the CDU22, have committed to introduce a proposal for binding legislation after the general election

of 22 September 2013.

UK +5.1 pp The government commissioned Lord Davies report in 2011 proposed an initial target of 25% women directors for FTSE-100 by 2015 to be achieved through self-regulation by companies. The first annual review in March 2012 showed significant progress but the latest research

suggests that progress has slowed23.

Note: Changes refer to the difference between the share of women on boards in October 2010 and April 2013 in percentage points (source: European Commission, Database on women and men in decision-making). The Commissions 2012 progress report includes an Annex giving more details of the measures taken in each country.

Figure 3 - Change in the share of women on boards by country, October 2010 - April 2013

Source: European Commission, Database on women and men in decision-making. Note: See Table 1 for details of increases driven by legislation/public debate.

22 CDU = Christian Democratic Union (CDU), the major centre-right party in Germany.

23 See the original Lord Davies report and subsequent progress reports published by the UK government:

https://www.gov.uk/government/publications/women-on-boards--3. An update of the situation in March 2013 has been published by Cranfield University: http://www.som.cranfield.ac.uk/som/dinamic-content/media/Research/Research%20Centres/CICWL/FTSEReport2013.pdf.

-12.2

-2.0 -1.5-1.3

0.1 0.4 1.1 1.11.6 2.2

3.1 3.3 3.3 3.3 3.4 3.94.8 4.8 4.9 5.5

6.2 6.6

10.2

5.1

7.9 8.4 8.7

14.4

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0

RO SK

HU PL

SE

MT

EE EL

PT IE LT FI

BE

AT

DK

BG ES

EU

-27 CY

UK LV CZ

LU DE IT NL SI

FR

Decrease Increase Increase driven by legislation/debatePercentage points

9

The latest data show some improvement in most countries

In the six months from October 2012 to April 2013 there was a positive improvement in the share of women on boards in 20 of the 27 Member States (Figure 4). The largest percentage point increases occurred in Slovakia (+5.8

pp), Hungary (+4.7 pp) and Bulgaria (3.6 pp), though it should be noted that these are all countries with relatively small sample sizes (see Annex A.2) where the change can largely be linked to changes in the composition of

companies covered by the blue-chip index. Indeed, the improvement in Germany (+2.5 pp) contributes more to the overall change at EU level than the increases in Slovakia, Hungary and Bulgaria combined.

The share of women on boards has declined since October 2012 in Romania (-2.8 pp), Lithuania (-1.6 pp), and Poland (-1.4 pp) and less significantly in Malta, Greece, Portugal and the UK (all less than 1 pp). In the UK, the 0.3 percentage point decline marks a break from a period of encouraging progress since the publication of the government commissioned Lord Davies report in 2011. A follow-up report on progress published in April 2013 and a recent research study have both noted concern at the halt in progress24.

Figure 4 - Change in the share of women on boards by country, October 2012 - April 2013

Source: European Commission, Database on women and men in decision-making.

More women are non-executive directors than senior executives

In general, women are better represented in non-executive positions than in executive positions (Figure 5). Data

based on the same sample of companies as the key boardroom data, but distinguishing the different positions covered in the top two decision-making bodies (see Methodology), show that women currently account for 17.6% of non-executive directors in the EU and 11.0% of the most senior executives. A higher level of female representation amongst non-executives applies in most countries, though in isolated cases such as Romania, Estonia, Cyprus and Malta, and to a lesser extent Greece, the proportion of women is higher amongst senior executives.

24 Women on Boards, UK Government, Department for Business, Innovation & Skills, April 2013:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/182602/bis-13-p135-women-on-boards-2013.pdf; The FTSE Female Report, Cranfield School of Management, April 2013: http://www.som.cranfield.ac.uk/som/dinamic-content/media/Research/Research%20Centres/CICWL/FTSEReport2013.pdf

-2.8

-1.6 -1.4-0.8 -0.6

-0.3 -0.3

0.1 0.3 0.3 0.40.6 0.8 0.8 0.9

1.0 1.2 1.31.6 1.9

2.0 2.0 2.0 2.02.5

3.6

4.7

5.8

-4

-3

-2

-1

0

1

2

3

4

5

6

RO LT PL

MT

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PT

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EE

DK

LU FI

LV BE

EU

-27 SE

CY SI

FR IT

ES

CZ IE NL

DE

BG

HU SK

Decrease IncreasePercentage points

10

Figure 5 - Share of women amongst non-executive directors and senior executives of large listed companies, April 2013

Source: European Commission, Database on women and men in decision-making. Note: Countries are ranked by the share of women amongst senior executives and non-executive directors combined so that the countries are in the same order in each part of the chart and the two shares can be compared.

Within the EU, there are three countries - Finland, France and the Netherlands in which the share of women amongst non-executive directors is much higher than amongst senior executives (by between 17 and 18 percentage points). Two of these (France and the Netherlands) are among the Member States that have adopted binding legislation on board representation and have seen significant progress in the overall representation of women on boards since 2010 (Figure 3). In both cases the legislative measures were introduced relatively recently (2011) and

the low shares of women amongst senior executives compared to non-executive directors may indicate that more time is needed for any significant impact to be seen in executive positions25. Senior executive positions may be

harder to fill (e.g. more succession planning is required) and take more time to change than non-executive positions (e.g. board members may be subject to a periodic renewal).

Senior executives with experience of day-to-day management of companies are an important source of future non-executive directors so that the dearth of women in this talent pool should be of real concern26. Measures to address

the leaky executive pipeline, which sees many women entering an executive career path but few making it to the top, requires a bottom-up approach. Business managers need to ensure that womens talents are nurtured and grown and that at every point on the career ladder women are given the same opportunities as men27. This is crucial to

allow women to gain the day-to-day management experience needed to access the most senior executive and non-executive positions.

25 In the case of France it should be noted that the legislation applies only to the main board, which tends to include relatively few senior executives (average 10.3% of

members).

26 See, for example, the 2013 follow-up to the Lord Davies report in the UK:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/182602/bis-13-p135-women-on-boards-2013.pdf

27 Commission Staff Working Paper 'The Gender Balance in Business Leadership', March 2011 (SEC(2011) 246 final:

http://register.consilium.europa.eu/pdf/en/11/st07/st07231.en11.pdf

0%

20%

40%

60%

80%

100%

28

.6%

28

.2%

23

.7%

30

.2%

28

.0%

9.7

%

23

.0%

8.1

%

20

.5%

17

.2%

24

.0%

20

.8%

16

.9%

6.8

%

19

.6%

12

.7%

15

.7%

15

.1%

16

.1%

13

.1%

15

.0%

10

.3%

8.1

%

11

.7%

8.1

%

9.2

%

2.7

%

48

.9%

43

.8%

21

.1%

18

.7%

13

.9%

9.7

%

LV SE SI FI FR RO UK EE SK LT NL BG DK CY CZ LU ES BE DE IE IT PL EL AT PT HU MT IS NO MK RS HR TR

Women Men

Non-executive directors

EU-27 average, 17.6%

0%

20%

40%

60%

80%

100%

22

.7%

21

.1%

18

.9%

12

.0%

9.6

%

25

.4%

11

.3%

25

.6%

11

.6%

14

.4%

6.6

%

7.5

%

10

.8%

16

.5%

6.1

%

12

.7%

9.5

%

9.9

%

7.9

%

7.7

%

5.4

%

6.8

%

9.0

%

4.1

%

7.3

%

6.1

%

9.3

%

12

.8%

15

.8%

25

.6%

25

.0%

17

.0%

10

.5%

LV SE SI FI FR RO UK EE SK LT NL BG DK CY CZ LU ES BE DE IE IT PL EL AT PT HU MT IS NO MK RS HR TR

Women Men

Senior executives

EU-27 average, 11.0%

11

More than three-quarters of companies have at least one woman on the board

In April 2013, more than three-quarters of companies (77%) had at least one woman on the board and nearly half (48%) have more than one. This represents a substantial improvement since 2010 when two thirds of companies (66%) had at least one female representative at board level and one third (34%) had more than one (Figure 6). It

still means, however, that nearly one in four (23%) of the largest companies in the EU-27 have no female representatives at board level.

Figure 6 - Distribution of companies by number of women on the board, EU-27, 2010 and 2013

Source: European Commission, Database on women and men in decision-making.

France is the only EU country with more than one woman on the board of every company covered by the data, joining Norway and, more recently, Iceland from outside the EU (Figure 7). Finland and Sweden are the only other

European countries with at least one woman on the boards of all major companies, while the UK, the Netherlands, Denmark and Germany are not far behind with between 93 and 96%. In contrast, more than half of companies in Malta, Estonia, Bulgaria, and Poland have no women on their boards.

Figure 7 - Distribution of companies by number of women on the board by country, April 2013

Source: European Commission, Database on women and men in decision-making. Note: Figures at the top show the proportion of companies with no women on the board, figures at the bottom show the proportion with more than one woman on the board.

Still very few women board chairs or CEOs

Despite the progress made at board level, there are still very few large companies with a woman Chairperson or CEO. The latest figures from April 2013 show that of the 587 EU companies covered by the Commission database just 26 are chaired by a woman (4.4%) and even fewer - 16 or 2.7% - have a female CEO. In just over half of EU Member States (14) no companies in the sample have a woman Chairperson and a similar number (but not the same countries) have no companies with a woman CEO (Table 2).

23%

29%

48%

2013 (April)

34%

32%

34%

2010 (October)

No women

1 woman

>1 woman

0%

0%

8%

10

%

13

%

17

%

20

%

21

%

23

%

26

%

30

%

31

%

32

%

35

%

40

%

40

%

45

%

47

%

56

%

61

%

70

%

72

%

78

%

78

%

80

%

85

%

10

0%

18

%

28

%

30

%

33

%

10

0%

10

0%

80

%

40

%

62

%

35

%

42

%

33

%

53

%

26

%

46

%

53

%

40

%

46

%

21

%

15

%

40

%

30

%

26

%

18

%

17

%

12

%

5%

6%

4%

0%

7%

0%

0%

52

%

44

%

30

%

13

%

0%

0%

0%

20%

40%

60%

80%

100%

MT RO EE CY LT EL BG PT HU PL SK CZ IE SI LU AT LV IT BE ES NL DK UK FI DE SE FR TR HR MK RS IS NO

>1 woman 1 woman No women

12

It is positive to note, however, that the figure for board chairs (4.4%) is the highest yet recorded, up from 3.4% in 2010. Data on CEOs have only been collected since 2012 and show no significant change.

Table 2 - Share of women amongst board chairs and CEOs of large companies, April 2013

% women Board chairs (n) CEOs (n)

>10% CZ, SK, LV, BG, CY, SI 6 CY, MT, NL, RO, SK 5

5-10% LT, ES, FR, PL 4 LV, SI 2

13

(EMPL) issued a favourable opinion on the Commission proposal. On 17 September 2013 a similarly favourable opinion was issued by the Committee on Economic and Monetary Affairs (ECON). Progress has also been made in the negotiations in the Council of the EU, as outlined in the progress report of the Irish Presidency discussed at the Employment, Social Policy, Health and Consumer Affairs Council (EPSCO) on 20 June 201331. The European Economic

and Social Committee and the Committee of the Regions have also adopted opinions, on 13 February32 and 30 May

201333 respectively, expressing clear support for the Commission proposal. The latter body confirmed that the

proposal is in line with the principle of subsidiarity.

Given that the reasons for the under-representation of women in business leadership are multifaceted, the Commission proposed in its Communication "Gender balance in business leadership: a contribution to smart, sustainable and inclusive growth"34 a set of accompanying measures to support Member States improve gender

equality in decision-making at all levels35.

Recent measures taken by Member States

National governments have a key role to play in establishing an enabling environment that supports companies in their application of diversity management goals and gives women and men equal opportunities to develop their careers. The Commissions 2012 progress report on women in economic decision-making gives several examples of initiatives from around the EU taken to promote the gender balance in business leadership36. Since then, a number of

national governments have taken further legislative or non-legislative measures that illustrate their commitment to improve the situation.

In Denmark, an amendment to the Companies Act and the Financial Statements Act passed at the end of 2012 requires large companies to set targets and implement a policy for gender diversity from April 1st 2013 and to report on those targets from 201437.

In the UK, the corporate governance code was amended by the Financial Reporting Council in September 2012, following recommendations in the 2011 Lord Davies report and an extensive consultation process. From 1st October 2012, companies are required to report annually on their diversity policy, any measurable targets they have set and progress towards these38. The 2006 Companies Act has also been amended to

require companies to disclose the number of women and men in the organisation as a whole (including board and senior management) in their annual reports from October 2013.

In Germany, in 2012, the Bundesrat (upper chamber of parliament) approved a proposal for a federal law applying a 40% quota for non-executive boards of listed companies and other large corporations. Four of the five parties currently represented in the Bundestag (lower chamber of parliament), including the CDU39,

committed to introduce a proposal for binding legislation in their manifesto for the elections held on 22 September 2013.

In Poland, on March 7th 2013, the Minister of State Treasury issued an executive ordinance which obliges state-owned companies to "choose adequately prepared members of supervisory boards, taking into account the balanced participation of women and men"40. The Code of good practices attached to that

ordinance establishes a target of 30% for 2015 and a priority rule for equally qualified women. No sanctions are envisaged.

31 http://europa.eu/rapid/press-release_MEMO-13-584_en.htm

32 Official Journal of the European Union C 133/68, 9 May 2013: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2013:133:FULL:EN:PDF

33 ECOS-V/039. See http://www.toad.cor.europa.eu/AgendaDocuments.aspx?pmi=ha5jDW%2BOWSGA9v5ptBX3MbEqXkLHPBxNdLxAYnYqvwQ%3D&ViewDoc=true

34 COM(2012) 615 final.

35 http://ec.europa.eu/justice/newsroom/gender-equality/news/121114_en.htm 36 Women in economic decision-making in the EU: Progress report: http://ec.europa.eu/justice/gender-equality/files/women-on-boards_en.pdf

37 See http://xbma.org/forum/danish-update-new-rules-on-gender-quotas-in-boards-of-directors/

38 See http://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/Feedback-statement-on-UK-Corporate-Governance-Code.aspx

39 CDU = Christian Democratic Union, the major centre-right party in Germany.

40 See Principles of corporate governance in companies in the Treasury

http://bip.msp.gov.pl/portal/bip/101/8163/Zarzadzenie_Nr_3_Ministra_Skarbu_Panstwa_z_dnia_28_stycznia_2013_r.html

14

Initiatives to support companies

As the possibility of legislative action at EU level and the surrounding public debate on the need to improve gender balance on boards gathers pace, a wide range of initiatives have been launched to support companies in meeting this objective.

An argument often used against legislation or to justify the lack of progress is that there are not enough experienced women to fill the number of board positions required to achieve balanced representation. There is, however, no evidence to support this assertion and a number of organisations are making available lists of suitably qualified women. The Global Board Ready Women Database, available on LinkedIn, was established in December 2012 under the initiative of leading European business schools and with the support of European Commission Vice-President Viviane Reding. The database, administered by the Financial Times Non-executive Directors Club41, already has more

than 8000 board-ready women amongst its membership and lends support to companies seeking to recruit women to their boards. Other databases and groups of board-ready women have been constituted at national level, including in Denmark42, Belgium43, Italy44 and Luxembourg. The Female Board Pool, which operates in Belgium and

Luxembourg is a platform to promote contact between existing and aspiring women board members and the companies interested in recruiting them45.

Adapting appointment processes can help to ensure that the talents of women are not overlooked. Opaque hiring practices, including information regarding the vacancy and selection criteria, male dominated nomination committees and corporate boards, and an emphasis on the prior boardroom experience and social capital more commonly held by men all contribute to the difficulties that women experience in accessing top positions. A study published by the UK Equality and Human Rights Commission in 201246 issued a number of recommendations as to how executive

search firms could adapt their working practices to mitigate these barriers, expand the talent pool and reach women in the pipeline. They include:

building databases that prioritise or at least flag out the profiles of available female candidates;

developing deeper relationships with women in the pipeline, thus going beyond the short-term approach to placement often adopted when consultants are mandated to fill a specific opening;

and engaging with talented women (either in middle executive ranks or in sectors such as professional services) before they are actually ready for board appointments, with the long-term aim of preparing them for roles as non-executive directors.

Advocacy groups are also important drivers of change and provide support through empowering women (e.g. through networking and mentoring organisations). In the UK, the 30% Club, established in 2010 by a group of company chairs committed to getting more women onto company boards in the UK, has set up action groups to look at how to help women progress through the pipeline47. In the Czech Republic, Odyssey a non-commercial mentoring project,

supported by male and female leaders provides a platform to match aspiring and talented women with experienced mentors who can help them develop their potential48.

41 http://www.non-execs.com/visitor-home/

42 http://www.womenonboard.dk/

43 http://www.womenonboard.be/

44 See http://www.readyforboard.com/ (in Italian) and http://www.pwa-milan.org/ready-for-board-women-2/

45 http://www.female-board-pool.com/

46 http://www.equalityhumanrights.com/uploaded_files/research/rr85_final.pdf

47 http://www.30percentclub.org.uk/

48 http://www.myodyssey.cz/en/

15

Actions launched by companies

All around Europe, companies are increasingly recognising the business case for gender balance in leadership positions and are taking diverse action to tackle the issue. Some of the steps that have been identified as being necessary49 include those listed below. It is important to associate men into the debate to ensure that the steps

taken do not create resentment or undermine the achievements of women (e.g. to avoid perceptions that an individual has been promoted purely on the basis of their gender).

Commitment from top management to gender diversity goals and to change corporate culture this signals that gender diversity is a company priority and a red thread running through the company approach to human resource management.

Thorough research into career trajectories of men and women; collection of data, surveys and analysis at company level this allows for the identification of inequalities.

Programmes to support the advancement of women including mentoring schemes, sponsorship, networking programmes, use of external coaches and leadership skill building programmes or board level internships to provide women with the necessary experience to be considered for a board appointment.

Indicators, targets and monitoring once the size of the problem is understood, indicators can be developed, targets set and monitored.

Measures to help both women and men reconcile work and family responsibilities this me