Will a new index have more success recognising the importance of women to the economy than Europe’s proposed quotas?
The European Union has signalled that it was moving closer to introducing mandatory quotas for the number of women on company boards after businesses failed to make sufficient progress in gender equality over the past year.
The EU’s Justice Commissioner, Viviane Reding, said that at the current rate it would take more than 40 years for women to hold 40 per cent of board positions in Europe’s publicly traded companies. “One year ago, I asked companies to voluntarily increase women’s presence on corporate boards,” Reding said.
“However, I regret to see that despite our calls, self-regulation so far has not brought about satisfactory results.” The European Commission (EC), the EU’s executive arm, said that over the past 12 months only 24 companies had signed a pledge to ensure that 30 per cent of their board positions are held by women by 2015. By 2020, that figure should increase to 40 per cent.
At the moment, only one in seven or less than 14 per cent of board members at Europe’s biggest companies are women, the EC said.
That’s up only slightly from just under 12 per cent in 2010 and despite the fact that 60 per cent of university graduates are now women.
The percentage of women chairing major European companies even fell slightly over the past two years, to 3.2 per cent from 3.4 per cent in January 2010. The EC says that the low presence of women in decision-making positions in big companies is not only a sign of gender inequality, but also hurts companies’ results.
“Women do not mean cost for companies.
Women mean a benefit. Women mean business,” Reding said, citing studies that firms with equal representation of women on their boards had 56 per cent higher operating profit compared with companies with all-male boards.
The EC is now asking companies and citizens whether they believe quotas are necessary, as well as what targets and potential sanctions should be set. It said legislation on gender equality including quotas could come later this year based on that consultation. “I am not fond of quotas,” Reding said. “But I very much like what quotas do.” Several EU states including Belgium, France, Italy, the Netherlands and Spain have already adopted gender quotas for companies, while others have minimum levels for women in state enterprises. Reding said that national legislation, or even the prospect of national legislation, helped lift more women into powerful posts.
France alone was responsible for half the EUwide increase, Reding said, bringing its own percentage to 24 per cent from just 12 per cent a year earlier.
However, she stressed that quotas have so far not been the main way to increase representation of women. Northern countries like Finland, Sweden and Latvia, which don’t have quotas, boast the biggest percentage of women on company boards in Europe. “Quotas itself are not sufficient. You also have to bring women in [to] the pipeline,” Reding said, pointing to better child-care provision by the state and more equal division of responsibilities between parents.
But are boardroom quotas really the way to go?
They could, say some observers, merely engrain the values and behaviour which are necessary to win a place on today’s company boards; often, typically male traits. Perhaps, they add, it would be better in the long run to provide more support to women in building their own businesses.
Earlier this month, a new index was launched, gathering for the first time detailed knowledge of women-owned businesses in Scotland. The Royal Bank of Scotland (RBS) Index of Women-Owned Businesses will give details of growth patterns in women-led enterprises and other data. Its supporters say it will be invaluable to the Scottish Government, Business Gateway, academia and the media in encouraging new and existing entrepreneurs.
Coordinated and hosted by Women’s Enterprise Scotland (WES), the initiative is supported by RBS and the Hunter Centre for Entrepreneurship at the University of Strathclyde. The launch, hosted by RBS and Adam & Company, was attended by around 50 women in business as well as key stakeholders in the business community.
Carolyn Currie, Head of Women in Business for RBS: said “The launch of the RBS Index of Women-Owned Businesses in Scotland is a first step in understanding the current position of women’s enterprise in Scotland.
Simply, our goal is to encourage more women to start up and grow businesses, and understanding how we do this better is vital to future economic growth. We are delighted to be supporting the Index as part of our overall Women in Business programme.” Jackie Brierton, WES’s director, said: “We aim to have a minimum of 6,000 women-owned businesses on the database within the next 18 months, which represents 10 per cent of the estimated Scottish total. This will allow regular surveying, opinion-gathering on critical issues and high-level monitoring of trends.” Brierton pointed to research published by the Department of Business, Innovation & Skills in 2011 which indicated that more than 60 per cent of women business owners would like to grow their businesses.
“If even half that level of Scotland’s female entrepreneurs were to create one additional parttime job in the next two years, the economic impact would be significant – with over 9000 jobs created,” she said. “The launch of the new Index will provide added impetus to realising the potential of female enterprise in Scotland.” There will be a more in-depth Index of 200 majority-owned female businesses from a range of sectors, turnovers and employment numbers.
They will agree to provide in-depth information on their business progression and profitability, and a report on the state of women’s enterprise in Scotland will be published twice a year.
The Hunter Centre for Entrepreneurship, led by Professor Sara Carter, will provide the research and analysis expertise to the Index, and Women’s Enterprise Scotland will publish the reports in partnership with RBS.
With more than 80,000 women registered as selfemployed in Scotland, including 60,000 registered businesses, the Index reports will provide an impetus to encourage more women to start and grow businesses – essential for the future health of the Scottish economy.
Professor Carter said: “The RBS Index research will provide unique information on womenowned businesses in Scotland, which will be useful for a number of key audiences. The Scottish economy needs more female entrepreneurs for its future stability and growth, and we can use the findings to encourage more young women to consider enterprise as a career option.”