Quotas for Women on Corporate Boards

Quotas for Women on Corporate Boards

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a€œBringing more women on boards is not just the right thing to do. More women on boards is the bright thing to do!a€ , argues Viviane Reding, the Vice a€“ President of the European Commission and Commissioner for Justice, Fundamental Rights and Citizenship in 2009-2014 when promoting European Union quota law. And then she adds: a€œ...I do not like them (quotas) either. But I like the results they bring.a€ The debate for higher female representation on corporate boards has become particularly intensive during the recent financial crisis. Scholars advocate that women are more risk-averse, more engaged with longer-term issues and tend to draw more attention to governance and ethics. Thus, it is suggested that due to the behavioural differences between men and women, more gender a€“ balanced boards would have prevented a number of financial collapses. This assertion has triggered more detailed analyses of current statistics for women on boards in the European Union. The numbers that are found follow the global pattern. Women are well underrepresented on boards and even less visible as CEOs or chairpersons of companies. In particular, at the end of 2013 women held 17.8% of the seats on boards in Europe, 16.6% in the US, 12.3% in Canada, 12.3% in Australia and 17.1% in South Africa. Women serve as chairpersons on 3.2% of the biggest companies in Europe , 3.1% in the US, 4.2% in Canada, 3% in Australia and 5.5% in South Africa. The country in the world that excels with the highest number of female directors on boards is Norway, which has achieved 42% women on boards by 2013. These strikingly low ratios and the general finding in the empirical literature that women bring positive change to firmsa€™ performance have generated a phenomenal drive for promoting initiatives that strive to increase the number of women on boards. The first country to look at the problems of women on boards was Norway, already in 1981, where a female quota for directors appointed by the government was introduced as a result. Two decades later, in 2003, Norway decided to extend the application of quota law to all listed limited liability companies by requiring firms to reach 40% representation of each gender on boards. However, in 2005 the progress showed only 17% women on boards, which prompted the Government to enhance the law by introducing sanctions. As a result, the percentage of female directors on the boards of Norwegian companies grew up to approximately 40% by 2008.listed companies on the German Stock Exchange (hereinafter a€œDAX30a€). ... should invest in practices, which improve the qualification of the women; should provide for flexible working hours for ... a significant drive for bringing more female directors on boards, at the end of 2013 women still represented only 4.4% of the seatsanbsp;...

Title:Quotas for Women on Corporate Boards
Author:Irina Velkova
Publisher:Anchor Academic Publishing (aap_verlag) - 2015-03-25


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