31 de mayo de 2012 Biblioteca 0

(1)     How effective is self-regulation by businesses to address the issue of gender imbalance in corporate boards in the EU?.

As the “Women in economic decision-making in the EU: Progress report” states that very little improvement has been made in the last two years. Given that the average number of female board members in the largest companies within the EU in 2012 was 13.2% compared to 11.8% in 2010, means that it would take more than 40 years to have gender balanced boards.

However if we look at small and medium enterprises, the difference in even bigger. Therefore, we believe beyond any doubt that self-regulation is inefficient.

We all know that Norway, in comparison to its European neighbours, is at the top of the ranking with 37.9% women on boards thanks to a quota legislation.

Nevertheless we should recognize that Portugal, Italy, Greece, Spain, Belgium and France have doubled the number of women on boards, as a result of the introduction of Corporate Governance Codes together with equal access legislations, plus increased shareholder and media scrutiny of board membership. But as the figures show the results are totally insufficient. The European Union already has the success story of Norway to use as a source of guidance.

The following table is an indication of how effective Codes can be:

Norway 44.2 37.9 Quota legislation effective
Sweden 26.9 28.2 Corporate Governance Code effective
Finland 25.7 25.9
Netherlands 12.3 15.8 Corporate Governance Code effective, quotalegislation proposed in Parliament
Denmark 18.1 13.9
UK 11.5 13.5 Corporate Governance Code effective
Austria 9.2 12.5
France 7.6 11.9 Quota legislation under discussion, very close toapproval
Belgium 7.0 11.1 Corporate Governance Code effective, quotalegislation proposed in Parliament
Spain 6.6 11.0 Quota legislation effective, no sanctions
Greece 6.0 10.2
Rep of Ireland 10.1 8.9
Switzerlad 6.6 8.8
Germany 7.8 8.5 Corporate Governance Code
Luxembourg 7.2 6.1
Italy 2.1 3.9 Quota legislation under discussion
Portugal 0.8 3.4

Source BoardEx


Last but not least, we would like to mention the case in Spain. Spain, despite the publication of the “Conthe Report”, set out to oblige the adoption of a certain levels of commitment for listed companies in the Stock Exchange Commission Regulation (CNMV), moreover contemplating sanctions for companies not respecting these quotas. It created such a stir in those companies that the Spanish regulator decided not to apply sanctions. As a result of this decision, the situation in Spain would be even worse than it currently is, if not for the fact that several of the listed companies are still in the hands of some families, thereby having women as natural inheritors, and thus members of the boards at present.


(2)   What additional action (self-regulatory/regulatory) should be taken to address the issue of gender imbalance in corporate boards in the EU?

We would recommend a combined action in three different phases:

(a)     Reinforce the legal obligation to eliminate discrimination and reinforce equal opportunities not just at the board level but also within the different decision-making levels within companies

(a)     Recommend a target for listed companies and entities of a certain size plus a mandatory minimum in a certain timeframe

(b)     Disclosure of the companies achievement of gender diversity at senior management level and above.

The financial crisis has tended to increase “control-based” behaviours reinforcing the importance of powerful corporate governance codes but we have not seen any reference to eliminating gender discrimination yet.

Therefore, we would recommend introducing a yearly external audit considering, SELF-ASSESSMENT TOOLS[1], as follows:

  1. To what extent does the current board mix reflect the diversity of our owners?   . . our customers? . . . our employees?. . . our communities?
  2. How knowledgeable, skilled, and understanding are our current board members in working equally comfortably and competently with diverse stakeholders?
  3. Does the board actively seek out and integrate issues related to diversity in their decision-making?
  4. Is the CEO personally committed to having women serve on the board and on the senior management committees?
  5. Do we actively encourage women in leadership (mentoring, speaking, networks)
  6. Do we maintain and update a roster or pool of potential board and senior management candidates?
  7. Does the organization use an outside search firm in the board/senior management selection process?
  8. Do we have a development program in place concerning diversity/gender issues?
  9. How many different stakeholder groups (e.g., owners, customers, employees, partners, communities) are explicitly mentioned in the organization’s mission/vision/values?
  10. What proportion of the executive team are women?
  11. What is the average length of service of the current board members?
  12. Who leads the board selection process?
  13. Where is gender representation among the criteria used to select board members?
  14. How many non-financial performance measures does the board regularly receive?


[1] Selected questions are drawn from Kaleidoscopic Organizations (Toronto: The United Way of York Region, 2001).

  1. Does the board ask management to provide measures of gender/diversity representation in management at each level?

A kind of compulsory auditing should be introduced, so that companies make a real effort defining a commitment and a target plan to achieve the recommended quotas.

On top of that, we would like to mention that, based on a recent survey performed by McKinsey[1]companies at which gender diversity is a top-ten priority have used various levers as follows:

a)        Options for flexible working conditions

b)        Monitoring indicators of company´s performance in gender diversity

c)        Encouraging female networking

d)        Visible monitoring by CEO and top management

e)        Inclusion of gender diversity indicators in executives’ performance reviews

f)         Skill-building programs aimed specifically at women encouragement or mandates to mentor junior women

g)        Programs related to parental leave

h)        Gender quotas in hiring, retaining promoting or developing women

i)          Systematic requirement for at least one female candidate in each promotion pool


As a result of all of them, McKinsey concluded that best practices to foster gender diversity within a company contemplate three sets of initiatives:

  1. Implement gender diversity indicators to identify inequalities and gaps and to measure progress. This is a prerequisite to create transparency. The indicators represent an important communication lever to maintain positive momentum around a gender diversity program.
  2. A set of HR management processes. Not only flexibility but also ensuring that at least one female candidate is considered for all management posts can make the difference.
  3. Developing women´s and men´s mindsets. Women should become aware of their self-imposed limitations and manage their careers in a predominantly masculine environment. At the same time men should break down prejudices and stereotypes about women.

In any case, we firmly believe that establishing quotas at the board level is not enough. We will not have talented female board members unless we encourage gender diversity within the middle and senior management.

We should be able to convince senior executives that the company may be losing high-talent women because they are underexposed. Focusing on metrics will point out the gaps and hopefully change the situation.

(3)   In your view, would an increased presence of women on company boards bring economic benefits, and which ones



We agree that the key to pushing the diversity agenda forward in an organization is by convincing managers that diversity is crucial to a company’s bottom line


A bevy of research highlights strong statistical correlations among large numbers of senior women, financial performance, and organizational health[1]. The bottom line: companies gain hard business benefits from a more diverse senior team.


We will sum up some of the main arguments put forward by these studies:


1. The World Bank has recently described that those countries where the gender barriers are being eliminating, receive the reward of greater GDP growth, better development and increased productivity. They have calculated that promoting females to the same positions and giving them the same opportunities, the increase in productivity will be between 3% and 20% depending on the country.


2. Similarly, Goldman Sachs has shown in their report called “Womenomics 3.0: The time is now” that diversity-oriented Japanese firms tend to enjoy higher per-employee profitability than their peers.


A 2009 survey showed that companies with explicit programs for the balancing of work and family and fair personnel evaluations enjoyed a greater than 10% increase in their per-employee recurring profit margins.


On the other hand, while overall consumption in Japan has been anaemic during the past five years, female spending trends have been relatively resilient. They introduce their list of “Womenomics winners” formed by those companies where the decision-making to buy their products is in the hands of the females and surprisingly, the entities have been more resilient than the market and there is a scope for further opportunities.


Furthermore, according to Goldman´s report, closing the gap between female and male employment rates would have a substantial impact in GDP:


Potential increase in GDP levels assuming female employment rates match that of males,%. Source GS Global ECS Research Estimates


[1] Georges Desvaux, Sandrine Devillard-Hoellinger and Mary C. Meaney “ A business case for women” September 2.008

1] Women leaders, a competitive edge in and after the crisis. September 2.011.

Therefore, promoting gender diversity has a clear impact on per-employee profits of the entities, on the GDP of the country and even from a consumer point of view, “Womenomic winners” have been more resilient than the market.

If we look at the “Womenomic winners” concept to Spain, we notice that one of the main companies in the Ibex 35- Inditex has experienced a 60% increase in their market value since September 2007 when most of the other companies have lost at least half of their value. Nobody would doubt who is the decision maker as a buyer in Zara.

3. But also, we should consider Mckinsey´s report titled “Changing companies´ minds about women” (September 2.011). McKinsey presents the results of a global survey confirming that certain leadership behaviours more frequently adopted by women are critical to navigate through the crisis safely and perform well in the post crisis world.

Mckinsey showed that companies with more than three women in top management score higher on the most important dimensions of organizational performance like leadership team and direction.

4. At the other side of the Atlantic, the Center of Excellence for Women’s Advancement (CEWA) in Canada research shows that executives perceive women as demonstrating a particular ability to take the needs of various stakeholders into account, as part of their decision-making process[1].

As we mentioned in the case of Japan, CEWA states that consumers, drive business sales and profits. For most businesses, women constitute the vast majority of consumers, or at least those who make the buying decisions. Clearly, the business case for women on boards is even more evident when an organization has a large constituency of female consumers and employees[2].

There is a double benefit to having a board that excels at promoting learning and growth. Not only will it foster better organizational performance, but it also creates a context—a cultural mindset—that contributes to developing women’s potential as senior executives and board members.

5. Author John Maxwell talks about the “leadership lid”[3]. He argues that an organization’s potential for success is limited by the potential of its leaders.

6. Frank McKenna, a director on leading boards in Canada, has seen “the Stockholm Syndrome” on some boards, where board members become so enamoured with the position, the corporation, the perks, and the management, that they gradually stop asking tough questions. Diligence and dissent give way to passivity and dependence, just as


[1] Recent deliberations and summits of organizations such as the Conference Board’s CEWA, Canadian Women in Communications, and Catalyst, almost invariably turn to this challenge.

[2] Gibb-Clark, “How Women Place on the Board,” Managing (Nov. 1998), and “Women Corporate Directors in the United States” by Mary C. Mattis in Women on Corporate Boards of Directors: International Challenges and Opportunities, edited by Ronald J. Burke and Mary C. Mattis (Dordrecht; Boston: Kluwer Academic Publishers, 2000).

[3] John C. Maxwell, Developing the Leader Around You: How to Help Others Reach Their Full Potential (Nashville: Thomas Nelson, Inc., 1995).


hostages often become sympathetic to their kidnappers (the origin of the syndrome[1].

Strategic thinking and a strong ability to foresee and manage risk are enhanced by ensuring a varied set of perspectives around the boardroom table. Not only will the board more accurately mirror the diverse owners and stakeholders of the organization, it will lead to better strategic decision-making and planning[2].

In addition to that, Boards with more women examine a wider range of management and organizational performance indicators. The board’s own performance in diversity is itself an indicator of organizational health; research suggests it is linked to bottom-line results.

Transparency and communicating to broader constituencies can be enhanced by more diverse boards, by better understanding stakeholder perspectives and by bringing different communication styles to the top of the organization.

Boards with more women are also more likely to consider measures of innovation and of social and community responsibility.

This is the most incontrovertible evidence that the presence of women on boards has a noticeable effect on the functioning of the board, and that this effect has to do with broadening the focus of the board—from activities to results, from finances to strategy, from owners to all stakeholders. In essence, the board is casting a wider net. The governance factors that have been shown to directly contribute to organizational performance are precisely those shown here: board activism and board independence[3].

The business case for women on boards is significantly bolstered by this conclusion: the factors that appear to be influenced by more women on boards are precisely those that have the most impact on corporate results (as McKinsey said).

The value of inner diversity in viewpoint, talents, and ideas, builds the business case for greater outer diversity in board members, demonstrating that women’s participation is also the “bright” thing to do.

When all board members are “cut from the same cloth,” the board can become an “old boys network”— widely-acknowledged as a major contributing cause to ineffective boards, poor governance and some of the most spectacular failures we’ve witnessed in both corporate and public sectors over the past decade[4].

In short, outer diversity is one proxy for inner diversity; inner diversity enables constructive dissent that leads to board unity; board unity is essential to giving a clear strategic direction and to overseeing risk and resources in essence, to leadership, stewardship and governance.


[1] Frank McKenna speaking at The Directors’ Roundtable (Ottawa: The Conference Board of Canada, 1999).

[2] Research does show that women are widely perceived to be consensus-builders, more inclusive, and to provide different perspectives that balance the views of their male colleagues. See Barbara Orser’s Creating High Performance Organizations: Leveraging Women’s Leadership (Ottawa: The Centre of Excellence for Women’s Advancement (CEWA).

[3] Ira M. Millstein and Paul W. MacAvoy “The Active Board of Directors and Performance of the Publicly Traded Corporation,” Columbia Law Review, Vol. 98, no. 5 (June 1998), p. 1295.


[4] The Dey Report: Where Were the Directors? & The Saucier Report: Joint Co on Corporate Governance (The Toronto Stock Exchange; Dey: 1994, Saucier: 2001).

Empirical data in Canada support this conceptual framework. Two dramatic examples are: 74 % of boards with three or more women explicitly identify criteria for measuring strategy; only 45 % of all-male boards do; 94 % of boards with three or more women explicitly monitor the implementation of corporate strategy; 66 % of all-male boards do.

Boards with more women are also more likely to use committees, particularly an executive committee and a strategic planning committee. The idea behind this is these boards are taking a more active role in setting the strategic direction and weighing long-term priorities. Far from focusing on traditionally ‘soft’ areas, boards with more women surpass all-male boards in their attention to audit and risk oversight and control.

(4)     Which objectives (e.g. 20%, 30%, 40%, 60%) should be defined for the share of the underrepresented sex on company boards and for which timeframe? Should these objectives be binding or a recommendation? Why?.

They should represent at least the number of women active in medium level management in companies and  simultaneously reflect to some extent, the consumers spectrum.

As we stated before, quotas should be introduced at the board and senior management levels to promote efficient change. Even the Administration should include the same objectives at all the levels, including the European Commission, where the gender equality policy itself disappoints at AD5 level and diminishes steadily with hierarchy.

We would recommend establishing an achievable, desirable and recommendable objective to have 40% by 2020 and a binding objective of 20% by 2015. Combining recommendations with binding sets a minimum, while driving towards an objective.

At the same time, we would recommend measures to ensure that there is at least one female candidate for all management posts.

(5)     Which companies (e.g. publicly listed / from a certain size) should be covered by such an initiative?

Certainly publicly listed companies should be covered, in order to assure the mentioned competences are brought to independent shareholders. But this is not enough, based on the arguments developed beforehand, we would be inclined to include companies, up to medium sized firms with 500 employees and 500 MM in revenues. In addition, we believe that the purchase and decision making process should also be considered  and introduced an additional criteria, just as female consumer rate above 60% should also be considered for the benefit of the enterprise and consumers internal market.

(6)     Which boards/board members (executive / non-executive) should be covered by such an initiative? .

Currently gender diversity initiatives have pointed out the need to increase the number of female board members and companies are complying with the rules inviting women as independent board members. But this measure does not go far enough, unless we reinforce the need to promote females to senior management positions there will be no change in the

way the companies are managed. Our aspiration should be that for any new executive member of the board and the management committee, a woman should be at least included in the short list of candidates.

(4)     Should there be any sanctions applied to companies which do not meet the objectives? Should there be any exception for not reaching the objectives?  

Non-compliant companies should explain in their annual report to the shareholders the gender diversity situation at all the levels, the commitment and the reasons that explain why the balanced representation has not been achieved. At the same time, the company should mention what measures plans to introduce to reach this goal in the future.

Disclosure should be one of the main public rewards, both positively and negatively. But also, specific sanction consisting in suspension of any advantage on public tenders, financial consideration etc would be very helpful.

For illustrative purposes, we may mention the Spanish experience, where it is compulsorily to engage women on boards for listed companies. Every year we acknowledge that the CNMV reports from those companies, despite of being mandatory, is a sum up of excuses arguing there are not enough women on the market with the required training and experience in the most sophisticated wording.

However, Spanish head hunters do report completely different figures of women experienced and able in practically all sectors.

The only excuse for not having sanctions could
be the case that there are no competences in the market, but again this explanation will be utterly used to exclude women from most selection processes.

Some of the criteria employed in the selection process of board members in countries with more women presence, show some interesting differences between boards with two or more female directors and boards with fewer than two female directors. Surprisingly, those with more presence of women, always tend to find capable women.

Ensuring gender representation should be mandatory together with necessary qualifications and skills when board profiles are prepared in companies in the European Union. If profiles are prepared with due diligence, this ought to be the case, since they would begin with needs, test them against current board members to reveal gaps, and from these gaps, build a wish list profiling prospective board members[1].

The simplest way to find women to serve on the board is to firstly, actively look for them and at the same time promote females to senior management level as the last but not least measure.



[1] David A.H. Brown and Debra L. Brown, Replacing a Few Good Men. (Ottawa: The Conference Board of Canada, 2000).



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