COMPANY LAW AND REPRESENTATION OF WOMEN Leena Linnainmaa Senior Deputy Director
Women as board members - Benefit or liability? ▪ Catalyst, www.catalyst.org – Fortune 500 companies • When women directors more than average, profits + 35 % compared to companies with less than average women directors ▪ Survey of the Finnish rating company Suomen Asiakastieto 7/2005 – TOP 500 Finnish companies • 28 CEOs, 19 chair-women, 7 both women • Profits etc considerably higher in companies led by women ▪ Study in Uppsala University, Sweden – Lönnqvist/Niska/Mäkinen-Salmi • 24 listed companies with the most women on board and 24 with no women on board (years 2005, 2004 and 2002) • Difference in profitability up to + 93 % with women directors
Glass ceiling – Women: 5 % top management (Finland and Netherlands) – Despite • women’s higher education • Women working full-time (part-time work of women: Finland 18.5 %, Netherlands 75.3 %) • Availability of child care (Finland available; NL not available) – How to break the glass ceiling? • New attitudes • Role models • Women’s networking • Mentoring • Training programs
Women lawyers in action ▪ EWLA – Resolution in Budapest May 2006 • EU reaction – Statement in Brussels March 2007 – Discussions with the Commission ▪ Regional projects
EWLA Resolution on the Balanced Participation of Women and Men on the Boards of Listed Companies ▪ urges the Commission to promote a balanced participation of women and men on the boards of listed companies by issuing a specific Recommendation on this matter. ▪ expects the Commission to evaluate the effectiveness of its Recommendation after a period of no more than five years with a view to recommending further measures such as national legislation on binding quotas if it finds that the Recommendation has not been implemented.
EWLA Statement on Women in Economic Decision-making Positions ▪ Urges the Commission to issue a Recommendation including: – national programs – a duty to give information on gender distribution in management in the annual accounts of companies with more than 50 employees. – annual reports on action and results. – creation of a high-level government and private sector forum to discuss regularly actions for promoting women in decision-making positions. – assess the effectiveness of its Recommendation in 5 years - further measures. ▪ Suggests that the Commission launches an annual prize for employers who take innovative action in promoting women’s advancement.
Director Training Program for Women Lawyers ▪ EWLA in cooperation with WLA Finland, in Helsinki ▪ One year program with ca 20 evening seminars ▪ Different aspects of leadership – Strategic planning – Personnel management – Board work – Personal development etc ▪ Women directors and experts are trainers for free ▪ Sponsors ▪ Model and experiences could be used in other countries
Women Dinner – Corporate Governance ▪ DJB organises on 18 October in Berlin ▪ High level event to draw attention to promoting women’s particapation in board work ▪ A comparative article to be published
Board Candidate Data Base ▪ Norway – Women Lawyers Justitias Døtre – www.kvinneristyret.no
Women as board members ▪ Europe’s top 300 companies – Study by European Professional Women’s Network www.EuropeanPWN.net: ▪ Norway 28.8 % ▪ Sweden 22.8 % ▪ Finland 20 % ▪ Denmark 17.9 % ▪ UK 11.4 % ▪ France 7.6 % ▪ Germany 7.2 % (Supervisory boards with employee representation, not executive boards) ▪ The Netherlands 6.5 % ▪ Switzerland 5.9 % ▪ Belgium 5.8 % ▪ Greece 4.4 % ▪ Spain 4.1 % ▪ Italy 1.9 % ▪ Portugal 0 % ▪ USA and Canada are ahead of Europe, Norway leads the world
New codes and recommendations ▪ OECD Principles of Corporate Governance, 2004 ▪ Combined Code, 2006 (UK) ▪ Le gouvernement d’entreprise des sociétés cotées 2003 (F) ▪ Deutscher Corporate Governance Kodex, 2006 ▪ Greece 2001 ▪ Austrian Code 2002 ▪ Italy 2002 ▪ Sarbanes Oxley Act of 2002 (USA) ▪ Finland, Recommendation for Listed Companies, 2003 (unlisted 2006) ▪ Netherlands 2003 ▪ Belgian Code 2004 ▪ Iceland, Recommendation 2004 ▪ Swedish Code 2004 ▪ Japan 2004 ▪ Norway 2004 ▪ Spain 2006 ▪ Denmark 2005 ▪ www.ecgi.org
Gender equality and CG codes ▪ codes don’t include gender equality ▪ 3 exceptions – Finnish code of 2003 – “It is imperative for the board work and its effective functioning that the board is composed of directors with versatile and mutually complementing capabilities and skills. The age mix and the proportion of both sexes can also be taken into account in the composition of the board.”
Gender Equality and CG codes ▪ Swedish Code of 2004 – 3.2.1 An equal gender distribution on the board is to be an aim. ▪ Spain 2006 (also legislation 2007) ▪ UK: Higgs report includes the issue, but the Combined Code of 2006 does not
Women’s board membership and legislation ▪ Norwegian law – 33-50 % of board members of listed and state-owned companies shall be women by 2005 • Sanction: Company dissolution – Alleviated by law amendment in December 2006 • As of 1 January, 2006 for new listed companies • By the end of 2007 existing companies must conform. 83 % of publicly owned companies complied by 1.2007 • State-owned companies: target fulfilled
Swedish experience ▪ Minister Winberg threathened with quotas in 2002 – Women’s membership doubled in 2003 ▪ Government target: quotas to be set unless 25 % of board members voluntarily women – Report including law proposal 2006 ▪ New government announced: no law on quotas – Women’s number going down? ▪ Annual Accounts Act 2004: Annual report to include management’s distribution of gender ▪ State companies: target 40 %, achieved
Denmark – 17,9 % women on board – State majority owned companies – law on quota 2000 • Balanced participation according to possibilities
Finland ▪ Government promotes women’s board membership in state-owned companies, targets achieved 2006 (40 %) – Prime Minister’s and Gender Equality Minister’s letter to listed companies 25 August 2006 – Government program ▪ Financial newspapers and magazines follow the development eagerly • Annual Women Leaders issue and Gala of Talouselämä Magazine (Financial Life)
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