Taking a Hammer to the Glass Ceiling in Europe

The underrepresentation of women in senior corporate positions remains a concern, but U.S. government officials haven’t taken direct action to help women break the "glass ceiling." Unless gender-based discrimination plays a part in keeping women out of the boardroom or C-suite, the federal government generally takes a hands-off approach.

Not so on the other side of the Atlantic Ocean.

There has been a growing trend in European nations to address the issue of male-dominated corporate management through the imposition of voluntary or mandatory quotas, something U.S. companies with European operations need to take into account.

The European Commission, for example, has proposed a 40 percent women's quota for nonexecutive board member positions in publicly listed companies by 2020. The proposal would need to be agreed to by the European Council and then passed by the European Parliament before becoming effective.

Since the beginning of last year, certain German companies have had to meet a mandatory 30 percent quota for filling vacant supervisory board positions with women. Many other companies in Germany have become subject to a voluntary quota.

The German government is addressing a situation in which, prior to the adoption of the new legislation, the share of female managers on the executive boards of the highest-revenue companies was 6 percent, and the share of women on the supervisory boards of these 200 companies was only 20 percent. Germany has also enacted gender pay parity legislation likely to become effective this year.

In the U.K., where male managers are 40 percent more likely to be promoted into senior and higher-paying management roles than their female counterparts, employers with more than 250 employees are required to publish gender and bonus pay gap details. While there is no legally binding quota for female representation in management, a "voluntary code of conduct" has resulted in a quarter of all board seats at Britain’s top 100 listed companies being held by women, and the government-commissioned report Women on Boards has set a target of 33 percent by 2020.

Sweden has put on hold a proposal to ensure that at least 40 percent of board members in selected companies are female, but employers with 10 or more employees are required to annually report gender-specific salary statistics to a national database, and companies are expected to adopt policies and procedures designed to further gender equality in the workplace.

More to Come?

According to a recent report from the World Economic Forum, the slow pace at which the economic gender gap is narrowing globally "suggests that it will take the world another 118 years—or until 2133—to close it entirely."

Given this situation and the European penchant to use governmental power in pushing for change, it’s realistic to expect additional nudges in the form of voluntary or mandatory quotas. Whether it’s the glass ceiling or some other issue, global enterprises should keep in mind that European lawmakers are more likely than their U.S. counterparts to step in and impose new requirements rather than waiting for businesses to address matters on their own.

Bloomberg BNA’s International HR Decision Support Network  provides resources, including labor and employment law primers on more than 70 countries, to help you stay compliant and develop policies for your international operations. Start your free trial  today.