Austria

Jenna McGrath, Associate
Paul Hastings (Washington DC)

Austria has historically struggled to keep up with the rest of the EU in its progress toward gender diversity on boards.  As discussed further below, limited soft measures in Austria (and ostensibly general social progress in gender equality) have increased the percentage of women on boards over the past decade.  In 2010, only 5.3% of executive board positions were held by women, and women held 9.7% of supervisory seats of the top 200 Austrian companies (by sales).1  As of January 2018, the proportion of women on the supervisory boards of the top 200 companies in Austria (by sales) was 18.5%, and the proportion of women on boards of Austria’s publicly traded companies was 18%.2  In 2018, taking a cue from other EU countries that have made meaningful progress through the implementation of gender quotas,3 Austria adopted similar measures.  As of January 1, 2018, Austria’s “Law on Equality for Women and Men as Non-Executive Directors on Company Boards” took effect, which imposed a mandatory 30% gender quota on the supervisory boards of Austria’s largest companies, with appointments made in contravention of the law considered legally void.  As one of the most recent adopters of a mandatory quota, Austria will be a country to watch moving forward as a benchmark for the efficacy of such quotas.

Austrian Gender Diversity Laws

Article 7 of the Austrian Federal Constitutional Law requires that “all nationals are equal under the law” and that “privileges based on upon...sex” are prohibited.4  In 1998, to conform to the UN General Assembly’s Convention on the Elimination of All Forms of Discrimination against Women (CEDAW), Article 7(2) was added to the Constitution, requiring federal, state, and municipal government to “promote factual equality of women and men, particularly by eliminating actually existing inequalities…”5  In 2009, Austria amended its Constitution once again to provide for the “equal status of women and men in budgeting.”6 

Austria’s Equal Treatment Act was first enacted in 1979 to address the equal treatment of men and women at work,7 and now includes several later amendments expanding gender equality protections, including prohibition of unequal treatment on the basis of gender.8  The law originally only addressed the treatment of women and men in employment at private enterprises, but was later expanded to cover areas tangential to and outside of work. 9  The scope of the Equal Treatment Act of 1979 (the “ETAct”) prohibits gender discrimination in a wide range of contexts, including hiring and firing employees, promotions, access to job training, access to employees’ organizations, self-employment-related activities, and access to public benefits.10 The prohibition on gender discrimination includes discrimination based on pregnancy.11  The ETAct does not prohibit positive discrimination, such as providing special training programs for underrepresented groups, including training programs to advance women in management.12 Claims of discrimination under the ETAct are heard before Austria’s Equal Treatment Commission.13

Federal laws for the promotion of women in the workplace have advanced since the early 2000s.  In 2000, the government established the Inter-ministerial Working Group for Gender Mainstreaming to promote gender mainstreaming across Austrian ministries.14  In 2011, Austria’s National Action Plan for Gender Equality in the Labor Market law (“National Action Plan”) introduced a number of measures to enhance workplace gender equality to be carried out by various government institutions such as the Federal Ministry of Labor, Social Affairs, and Consumer Protection, and the Federal Chancellery.15  It further required companies with 1,000 employees or more to publish a report indicating average salaries by gender.16  Austria also implemented gender quotas for public institutions: 45% for almost all positions in the Austrian Public Broadcasting Service; 40% for members of decision-making committees and boards of Austrian universities; and 50% for federal staff positions.  A separate regulation provides that the academic panels at the University of Applied Sciences shall be comprised of 45% women “if possible.”17  While these quotas are laudable, there are no sanctions for failure to comply.18 

In March 2011, the Austrian government also imposed quotas for corporate boards of directors of majority state-owned companies: they were required to achieve 25% women by 2013, and 35% by December 2018.  According to an annual progress report that provides statistics on the law’s effectiveness, 2017 was the first year that all 54 companies subject to the rule met the 2013 quota target.19  Some companies have exceeded the quota: looking at the average across the state-owned companies, women’s board representation reached 46.7% in 2017 (a substantial increase compared to the previous year at 40.3%), and 37 companies met or exceeded the 2018 target of 35%.20  In late 2017, the Austrian finance minister announced a targeted quota of 50% women for supervisory boards of companies associated with the Finance Ministry (which would include state-owned entities, as the federal government has delegated the Finance Ministry authority to manage the government’s equity interests in companies).21  This may have driven the 6.4% increase from 2016 to 2017 in women’s board representation at majority state-owned companies.22  Although meaningful progress has been made, it should be noted that the affected companies – majority state-owned companies – are a small subset of all companies in Austria.

Most recently, on July 26, 2017, Austria adopted the Law on Equality for Women and Men as Non-Executive Directors on Company Boards (the “Law”), which became effective January 1, 2018.23  The Law requires companies listed on a regulated stock exchange in Austria, the EU, the Economic Area, or any other equivalent market, and those with more than 1000 employees, to have boards comprised of at least 30% women and men.24  The Law exempts companies with boards of fewer than six members, and companies with less than 20% of total employees of the underrepresented gender, or “single gender” companies.25  Like similar laws in Europe, including Germany and Belgium, any appointment made in violation of the Law is void.26  According to information provided by all listed companies, only 31 companies are covered by the new law.

In Austria, companies generally must have a management board, and stock corporations are required to have a two-tier management structure including a management (or executive) board and a supervisory board.27  As of 2010, before implementation of the National Action Plan, only 5.3% of executive board seats and 9.7% of supervisory board seats were held by women.28 According to the annual survey of public and top 200 companies in Austria by sales, the proportion of women on the management board of the top 200 companies is currently just 8.4%, and in the supervisory boards, women represent 18.5%.29 Only 37 of the top 200 companies by sales have women on both the supervisory board and the management board.30 Only 13 companies, and thus 6.5% of the top 200 companies, report that they have a balanced board (that is, a board where each gender has 40% to 60% board representation). 31 More than a quarter of the top 200 companies surveyed (56 out of 200) did not have a single female member of the Supervisory Board.32

In surveys, publicly traded companies fare worse.  The proportion of women on the supervisory boards of publicly traded companies (listed on a stock exchange) is lower, at just 18%.33  Of the 68 companies listed on the Vienna Stock Exchange, only 13 met the criteria stipulated under Austria’s new quota system of boards with gender representation of at least 30%, and almost one third of the Supervisory Board committees of listed companies examined are exclusively men.34

Corporate Governance Code

In addition to the laws noted above, Austria’s Code of Corporate Governance, published by the Austrian Working Group for Corporate Governance, is mandatory for companies listed on the Prime Market of the Vienna Stock Exchange.35  Section 52 provides that, when new board members are appointed, “reasonable attention is to be given to the aspect of diversity of the supervisory board with respect to the representation of both genders…”36  The Code also requires transparency measures in company annual reports, including information on the gender compositions of the supervisory boards and management positions, as well as “measures taken to promote women to the management board, supervisory board and to management positions in the company during the reporting year.”37

General Diversity Initiatives

Austria’s Constitution provides in Article 7 that there shall be no privilege on the basis of “birth, sex, estate, class, or religion.” Austria’s ETAct provides more granularity to this concept of non-discrimination, including prohibitions on discrimination on the basis of gender, ethnicity, religion or beliefs, age, or sexual orientation.38 The prohibition on discrimination on these grounds applies to employment, pay, benefits, training, promotion, working conditions, and termination.39 Remedies for such discrimination include monetary damages or remediation of the discriminatory practice.40 Discrimination on the basis of disability is also prohibited under a separate mandate for Equal Treatment of People with Disabilities, enacted in 2006.41  The protections for individuals with disabilities are in some cases more stringent than those under the Equal Protection Act, but generally overlap with the rights of individuals under the Equal Protection Act.

In addition to these legal protections, Austria also has a Diversity Charter that was established in 2010, initiated by the Austrian Federal Economic Chamber and the Vienna Chamber of Trade and Commerce and a private diversity consultancy (the “Diversity Charter”).42 The Diversity Charter, which has approximately 215 signatures, including both public and private companies,43 promotes diversity based on the same classes protected under the Equal Treatment Act and mandate for Equal Treatment of People with Disabilities.  It is purely voluntary, and signals a public commitment by signatories to diversity principles and advancement of diverse individuals in the workplace.44

Conclusion

Over the past decade, Austria has struggled to keep pace with the rest of Europe with respect to women’s representation on boards.  However, it has signaled a strong commitment to improving the situation by establishing mandatory measures for state-owned companies in 2011, and mandatory quotas for publicly listed and companies with 1,000 or more employees in 2018.  Austria’s ETAct provides broad legal protections for women and other diversity classes.  The measures for state-owned companies have led to meaningful progress toward gender equality on boards of these companies, but not at the pace originally envisioned.  Austria’s very recent quotas for public and 1,000-plus employee companies may spur an increase in the rate of change, although the quotas apply to a very limited range of companies, and its “single gender” company exception could provide a loophole for companies with the most significant need for equality measures.

1  National Action Plan, Gender Equality in the Labour Market, Bundeskanzleramt Osterriech 23 (June 2010), https://www.bmgf.gv.at/cms/home/attachments/4/5/7/CH1553/CMS1465832947892/napbericht_en_2011_26512.pdf.

2  Frauen Management Report 2018, Abteilung Betriebswirtschaft, AK Wien (2018), https://media.arbeiterkammer.at/wien/PDF/studien/AK.Frauen.Management.Report.2018.pdf.

3  Other countries in the European Union that have adopted mandatory quotas include Belgium, Germany, and France.  See the profiles for these countries infraSee also Women in the boardroom: A global perspective, Deloitte 46, 52-53 (2017), https://www2.deloitte.com/content/dam/Deloitte/za/Documents/technology-media-telecommunications/za_Wome_in_the_boardroom_a_global_perspective_fifth_edition.pdf.

4  Austrian Constitution of 1920 (reinstated 1945, amended 2009), https://www.constituteproject.org/constitution/Austria_2009.pdf.

5  Id.; see Austria, Eur. Inst. for Gender Equal., http://eige.europa.eu/gender-mainstreaming/countries/austria/about (last visited Aug. 29, 2018).

6  Austrian Constitution of 1920 (reinstated 1945, amended 2009).

7  Equal Opportunities: Equal Treatment Legislation in Austria, Fed. Ministry of Labour, Social Affairs & Consumer Protection 6-7 (2016), https://broschuerenservice.sozialministerium.at/Home/Download?publicationId=46.

8  Id.  In 2008, non-discrimination on the basis of gender was extended to apply beyond the workplace, and in 2011, expanded measures for transparency in gender income disparity were included.  Additional measures were added in 2013 to cover self-employment.  Id. at 7.

9  Id. at 11-12.

10  Id.

11  Id.

12  Id. at 25.

13  Id. at 39.

14  Austria, Eur. Inst. for Gender Equal., http://eige.europa.eu/gender-mainstreaming/countries/austria/laws-and-policies (last visited Aug. 31, 2018).

15  Achievements in Austrian Gender and Social Policy, Austrian Embassy Washington (June 24, 2015), http://www.austria.org/austrianinformation/2015/6/24/achievements-in-austrian-gender-and-social-policy.

16  Id.

17  Id; see University of Applied Sciences Act § 10 (2014), https://bmbwf.gv.at/fileadmin/user_upload/E_FHStG.pdf.

18  Id.; see Deloitte, supra note 3, at 45.

19  Fortschrittsbericht 2018 über die Erhöhung des Frauenanteils in den Aufsichtsgremien der Unternehmen mit einem Bundesanteil von 50% und darüber, Bundeskanzleramt Osterriech (Mar. 1, 2018),  https://www.bundeskanzleramt.gv.at/documents/131008/688849/10_5_mrv.pdf/b9d0db13-56a5-45c4-afcc-c6e2af082d32.  In 2016, eight companies did not meet the 2013 quota.

20  Id.

21  See Schelling: “Supervisory boards of Finance Ministry associates consist mainly of women” Austrian Finance Minister meets supervisory-board members of BMF-associated companies, Fed. Ministry Republic of Austria (Oct. 11, 2017), https://english.bmf.gv.at/ministry/press/BMF_female_supervisory_board_members_are_majorityy.html; Management of State-Owned Enterprises, Fed. Ministry Republic of Austria (2018), https://english.bmf.gv.at/budget-economic-policy/Management-of-State-Owned-Enterprises.html (last visited Sept. 12, 2018).

22  Bundeskanzleramt Osterriech, supra note 19.

23  Gleichstellungsgesetz von Frauen und Männern im Aufsichtsrat (2017), https://www.ris.bka.gv.at/Dokumente/BgblAuth/BGBLA_2017_I_104/BGBLA_2017_I_104.html.

24  Abteilung Betriebswirtschaft, supra note 2, at 16.

25  Austria enacts legislation for a 30% quota of women on Supervisory company boards, Eur. Comm’n (Nov. 23, 2017), https://www.equalitylaw.eu/downloads/4510-austria-austria-enacts-legislation-for-a-30-quota-of-women-on-supervisory-company-boards-pdf-168-kb.

26  Id.; see 2018 Report on equality between women and men in the EU, Eur. Comm’n 34 (2018), https://publications.europa.eu/en/publication-detail/-/publication/950dce57-6222-11e8-ab9c-01aa75ed71a1/language-en.

27  Austrian Corporate Governance Code (amended 2015).

28  Bundeskanzleramt Osterriech, supra note 1.

29  Abteilung Betriebswirtschaft, supra note 2, at 23.

30  Id.

31  Id. at 24.

32  Id. at 26.

33  Id. at 30.

34  Id.

35  Austrian Corporate Governance Code (amended 2015).

36  Id.

37  Id., § VI, Annex 1, Annex 2a.

38  Fed. Ministry of Labour, Social Affairs & Consumer Protection, supra note 7. 
Austria, Eur. Inst. for Gender Equal. (2018), http://eige.europa.eu/gender-mainstreaming/countries/austria/laws-and-policies (last visited Aug. 31, 2018).

39  Id.

40  Id.

41  Id.

42  See Charter der Vielfalt, Austrian Econ. Chambers (2018), https://www.wko.at/site/Charta-der-Vielfalt/index.html?shorturl=charta-der-vielfaltat (last visited Sept. 12, 2018).

43  19 Diversity Charters in the EU, Equality Strategies (Dec. 19, 2017), https://www.equalitystrategies.com/blog/2017/12/19/19-diversity-charters-in-the-eu/.

44  See Austrian Econ. Chambers, supra note 42.