CWS 3.0: October 19, 2011 - Vol. 3.29

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Global: Gender Equality in the Board Room

One of the most-discussed management topics in Europe this year has been the relative lack of female representation on European businesses’ boards of management.

A new energy was added to the discussion in July when the European Union told member countries to do something about it or the EU would be forced to take matters into its own hands. Specifically, the EU expects women to make up 30 percent of top management in the largest listed EU companies by 2015 and 40 percent by 2020. If voluntary measures fail to boost the number of women in senior positions, EU legislation must be used, members of the European Parliament say.

Given that the balance of men and women in the global population is just about equal (1.01 men to every woman), it could be argued that a target of 30 percent is quite unambitious. However, it would still be a considerable improvement on the current ratio — women now comprise 10 percent of directors and only 3 percent of CEOs at the largest listed EU companies. As the number of women in corporate boards is currently increasing by only half a percentage point per year, it would take another fifty years before boardrooms have at least 40 percent women.

Women are a little better represented on the boards of American companies than European. Research by the 2020 Women on Boards campaign found that the percentage of women on boards for the Fortune 1000 is 14.6 percent. The research also identified that the smaller the company, the fewer women in the boardroom. The Fortune 100 are at 19.4 percent while this number drops to 16.4 percent for the Fortune 500 and to 12.4 percent for the Fortune 501 – 1000. Despite their head start over Europe, the campaign is surprisingly modest in calling for an increase in the percentage of women who serve on U.S. corporate boards of directors to 20 percent or greater by the year 2020.

One country that is noticeably more gender balanced at the board level is Norway, where, since 2005, legislation has required that 40 percent of public company board representatives must be women. Not surprisingly, the rather heavy hint dropped by the European Union this summer has led many countries to explore the possibility of imposing similar quotas. Member states and companies have already taken various measures, ranging from 'soft measures' such as corporate governance codes and charters to legislative measures, such as gender quotas (Norway, Iceland, Spain, Austria and France).

In the U.K., The Lord Davies' review (published in February) recommended that U.K. companies listed in the FTSE 100 (largest public companies in the U.K.) should aim for a minimum of 25 percent female board member representation by 2015. The number of women now holding FTSE 100 board directorships is 155 out of a total of 1,092 positions (14.2 percent).

This week, representatives of the DAX 30 companies (the largest public companies in Germany) will present their proposals on how they intend to increase the share of women among middle and upper management to 30 percent by the year 2020. In advance of the proposal, Employment Minister Ursula Von der Leyen warned: “I am going to look personally at each of the companies in detail. There are those who are at the forefront and there are those who will forever live in the past. We should name them and shame them because we have had enough lip service now.”

The Netherlands soon will have an official target set by the government of 30 percent female representation. However, the latest Dutch Female Board Index compiled by Erasmus University shows that most big Dutch firms still have no women at all on either the supervisory (non-executive) or the management (executive) board. Of the 97 Dutch companies investigated for the index, only one, TNT Express, has achieved the 30 percent target. In total, only 9.2 percent of management board positions and 11.2 percent of supervisory board positions are currently filled by women.

In light of these developments, it is interesting to consider the status of women among the boards of major staffing companies. The good news is that the ten largest global staffing companies already exceed some of the targets or quotas being set. Out of 158 executives sitting on either the executive board, board of management or supervisory board (different countries have different board structures) of these firms, 33 (21 percent) are women.

There are some negative interpretations you could make of this number however. Given the relatively high numbers of women that work in the staffing industry, 21 percent is not really such an achievement and evidence that a glass ceiling still exists in staffing as much as any other industry.

It would also be to fair to say that there is quite a wide disparity among this elite ten. There are no women on Adecco’s executive committee or Randstad’s board of directors. Further, Allegis’ four senior executives are all men. In contrast, Kelly Services has six women (out of 19) on its executive committee, while Robert Half International has five (out of 14).

Moreover, women holding operational board roles in major staffing companies are few and far between, with Françoise Gri at ManpowerGroup, Pamela Berklich and Teresa Carroll at Kelly, and Paula Streit at RHI among the notable exceptions. The majority of women on staffing company boards fulfill administrative/support roles such as HR, marketing, and legal. However, two companies can boast female CFOs: Patricia Little at Kelly and Leen Geirnaerdt at The Netherland’s USG People.

Only one of the 10 leading global staffing companies is led by a woman: Temp Holdings, the Japanese staffing provider with $2.38 billion in revenue for 2010. Founder, Chairman and President Yoshiko Shinohara still owns 40 percent of the company, making her the most powerful woman in the staffing industry. Surprisingly, the rest of the directors on the company’s board are men.

With an increasing proportion of women comprising the workforce, the debate on gender equality among senior executives can only increase. The staffing industry can take the lead in this respect and is in a strong position to exceed other industries in the future. More enlightened companies are already addressing the issue in advance of any legal enforcement. But old patriarchal attitudes still persist. Swiss banker and CEO of Deutsche Bank, Josef Ackermann did little to enhance his personal reputation with a recent comment that a woman's presence on a company board might make meetings “prettier and more colorful”.

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