European Union

Jenna McGrath, Associate
Paul Hastings (Washington DC)

Both gender equality and minority rights are foundational principles of the European Union (EU),1 as evidenced throughout the EU Commission’s recommendations and directives.2  The Charter of Fundamental Rights of the European Union includes an expansive prohibition on discrimination on any ground, including “sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation.”3 The Charter is the starting point for a number of the EU Commission’s pronouncements and directives to advance equality in European society. 

Notwithstanding these overt commitments to advance gender equality, persistent inequality has plagued the EU as a whole, and its Member States individually, due to complex societal and cultural factors.  The EU has actively addressed these systemic inequalities through initiatives discussed below and, as a result, has made significant progress in the area of gender equality.  However, the EU has been criticized for its lack of policies to promote other types of diversity—including ethnic and racial diversity—within the leadership of its own ranks and to promote equality within its Member States.

EU Gender Equality Initiatives

The Treaty on the Functioning of the European Union (the “EU Treaty”) charged Member States with the responsibility of ensuring equal pay between men and women. To act on that commitment, and in response to a long history of gender inequality in the EU, in 2006 the EU Commission launched the “Strategy for Equality between Women and Men 2006-2010” (the “EU First Strategy”).4  The EU First Strategy was the first of several strategies to frame gender equality as a fundamental right within the EU, critical to the EU’s broader objectives of “growth, social employment, and social cohesion.”5  The EU releases an updated strategy every five years. 

The EU First Strategy identified six strategic priorities for 2006-2010: “equal economic independence for women and men; reconciliation of private and professional life; equal representation in decision-making; eradication of all forms of gender-based violence; elimination of gender stereotypes; [and] promotion of gender equality in external and development policies.”6  For each priority area, the EU First Strategy set forth specific actions.  To promote gender equality in decision-making decisions, the EU Commission’s commitments focused on information gathering, such as researching and monitoring women’s representation in decision-making, establishing a network of women in such positions, and supporting existing EU practices and structures advancing gender equality.7  The EU First Strategy also recognized the severe gender disparity in corporate decision-making bodies, noting that, at the end of 2004, “in the top 50 publicly quoted companies… women make up 10% of the members and only 3% of the presidents” of those bodies.8

In December 2006, the EU Commission also adopted a proposal to establish the European Institute for Gender Equality (EIGE).9  The EIGE furthered the goals of the EU First Strategy by creating an organization that would: collect, analyze, and develop methods to obtain objective data on gender equality; develop tools to integrate gender equality within the EU’s institutions; conduct surveys; organize meetings; and raise awareness of gender equality issues.10  The EIGE management board was nominated by the EU’s Member States and began meetings in 2007.  The EIGE’s management board consists of 18 representatives from Member States (operating on a rotating basis to ensure optimal efficiency and representation), and one representing the European Commission.11

The European Commission issued its “Strategy for Equality between Women and Men 2010-2015” (the “EU Second Strategy”) on September 21, 2010, providing a framework of objectives and action items for the next five-year period, including recognizing gender inequality on corporate boards. 

In light of the lack of women’s representation in decision-making, the EU Second Strategy expressly prioritized women’s representation on corporate boards of directors.12  At the time it was released (2010), women represented almost half of the EU’s workforce and more than half of its college graduates.13  Because of this gender imbalance and women’s historic lack of economic independence and equality in terms of pay and decision-making representation, the EU Second Strategy set forth a number of action items for the European Commission, Member States, and the EU’s business sector, including an express request that publicly listed companies implement measures to advance women’s representation on corporate boards.14

To advance the EU Second Strategy, the EU Commission published its Green Paper on Corporate Governance (the “Green Paper”), which surveyed Member States, the European Parliament, and EU Committees and stakeholders on corporate governance issues, including the issue of women’s underrepresentation on corporate boards. The EU Commission sought feedback on actionable measures it could take to close the gender gap, asking about 1) suggested recruitment policies to ensure a diverse board, 2) whether public companies should be required to disclose diversity policies and gender diversity progress in the company, and 3) whether listed companies should be required to have a balanced gender representation on their boards and, if so, what measures should be taken.15  Beyond mandatory incentives such as quotas, the Green Paper also sought feedback on whether companies should implement work-life balance initiatives and mentoring and training programs for management positions to address the gender disparity.16

Respondents to the survey overwhelmingly expressed views in favor of gender diversity on boards, but varied in their responses as to what measures should be taken to promote diversity.17 While some supported mandatory “hard” measures such as quotas, most supported some combination of soft measures and self-regulation.18  Most of the participants considered self-regulation and/or “soft” measures such as an EU recommendation, rather than mandatory directives, while others suggested monitoring the progress of countries without quotas and considering introducing quotas if soft measures fail to yield meaningful progress.19

In March of 2011, Viviane Reding (EU Justice Commissioner) issued a press release challenging EU publicly listed companies to sign on to the “Women on the Board Pledge for Europe.”20 The pledge represents a voluntary commitment targeting an increase to 30% women on boards by 2015 and a 40% target for 2020. Commissioner Reding implored companies to “develop their own credible way to get more women into top jobs,” emphasizing that the following 10 months would be a testing period to “give self-regulation a last chance” before regulators would develop their own creative solutions.21 Later, in November 2011, the EU Commission published its Work Program for 2012, which indicated it was considering “soft” legislative measures to improve gender balance on boards. 22

On November 14, 2012, the EU Commission issued a legislative proposal setting a minimum objective of 40% of women in non-executive board positions in listed companies in Europe by 2020, and by 2018 for public undertakings (e.g., companies where Member States exercise a dominant influence through ownership or other control).23 The proposal would have applied to around 5,000 listed companies in the EU, leaving the Member States to decide appropriate penalties for failure to meet the objective, but requiring those companies that failed to meet the quota to introduce fair selection procedures to prioritize the selection of qualified female candidates.24  The proposal was driven by data indicating slow progress in Member States, and its finding that nearly nine out of 10 Europeans agree that women should be equally represented in leadership in such countries, with three-quarters of Europeans in favor of legislation on gender balance on such boards.25 

In December 2012, shortly after issuing a legislative proposal that would establish targets for women’s representation in non-executive board positions (discussed further below), Commissioner Reding published a progress report titled “Women in Economic Decision-making in the EU: Progress Report” (the “Progress Report”), which analyzed the progress of public companies in the EU in advancing gender diversity on boards, and whether self-regulation was working.26 The Progress Report concluded that 2010 to 2012 evidenced “the best progress in many years” in advancing gender equality on corporate boards.27  However, it stated that about 40% of the EU-wide change was concentrated in France, which had adopted a legal quota for women’s representation on boards (40% representation on boards by 2017) in January 2011.28 It also represented that this progress (11.8% in 2010 to 13.7 percent at the beginning of 2012) fell notably short of the 30 percent target for 2015 that Commissioner Reding announced in 2011 (discussed above), and at that pace, it would take 40 years to achieve gender-balanced boards (at least 40% of each gender).29 

On November 20, 2013, the European Parliament voted to back the legislative proposal for quotas (discussed above) with strengthened language, including proposed mandatory sanctions and the removal of certain exemptions.30  In order to be adopted by qualified majority and become law, agreement on the legislation’s language among the Member States and the European Parliament must be reached. Despite several pronouncements of continued support, including a 2016 recommendation in the EU Parliament’s Work Plan that adopting the directive should be a priority for 2016, the proposal failed to pass.31

The Strategic Engagement for Gender Equality 2016-2019 (the “EU Third Strategy”) was released on December 12, 2015.  While the report touted women’s highest employment rate ever recorded at 64% in 2014, it noted “persistent inequality” in other areas, including pay and earnings, and described promoting women to decision-making roles as the area least-addressed by the EU Member States.32  As of the date of the EU Third Strategy, women comprised only 21% of the board positions of the largest listed companies, 29% of the EU Parliament and national parliament positions in EU Member States, and 27% of Member States’ national governments and the European Commission.33

Reflecting policy themes from the previous strategies, the EU Third Strategy identified key priorities for 2016-2019, including increasing women’s employment, reducing the compensation gap between men and women, advancing equality in decision-making, ending gender-based violence, and advancing gender equality around the world.34 Key actions to address these priorities include:

With respect to promoting women’s access to decision-making positions and representation among leadership positions, the EU Third Strategy identified several key actions specifically with respect to workplace gender balance and representation of women in management:

The EIGE’s 2017 gender equality index report, which analyzed data from 2005 to 2015, found only marginal progress toward gender equality generally, with the most significant progress reflected in a growing representation of women on corporate boards.37  Since 2005, immediately before the formal strategies were introduced, the proportion of women on boards of the largest companies nearly doubled over 10 years (by 2015);38 60% of such companies had more than one woman on the board, and the percentage of companies with all male boards dropped to 21% from 50%.39  The EIGE’s latest data, as of October 2017, shows that women account for 25.3% of board members in the largest publicly listed companies in Europe, up from 21% per the EU Third Strategy’s released in 2015.40   The EIGE attributes much of this progress to the imposition of mandatory quotas for board diversity in a number of the most successful Member States.41 While progress has been made in this area, the EIGE has noted a slowing in the rate at which women are being added to corporate boards of publicly listed companies.42

On July 19, 2017, the European Commission issued a new Diversity and Inclusion Charter providing a general commitment to inclusion within the European Commission regardless of gender,43 and adopting a number of measures to bring female representation in its own management to at least 40% by November 1, 2019. Among the measures are specific targets for leadership in all European Commission departments, and those that fail to achieve their targets may be asked to attract suitable female candidates before appointing department heads.44 

In November 2017, the European Commission issued the EU’s Action Plan 2017-2019 (the “Action Plan”), which reiterates the Commission’s commitment to breaking the glass ceiling, and encouraging Member States to adopt strategies with concrete measures to ensure improved gender balance in decision-making.45

EU Diversity Initiatives

Beyond gender equality, the Charter of Fundamental Rights of the European Union (the “Charter”) discussed above includes an expansive prohibition on discrimination on any grounds, including “sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation.”46  The European Commission has initiated a number of directives under the Charter intended to protect a broad range of rights, including:

Despite nominally promoting equality of these protected groups, the European Commission has been criticized for a lack of specific commitments for ethnic and racial diversity, and for generally failing to introduce the same kind of targeted data collection and strategic plans that it has implemented to achieve gender equality.  As an example, the Diversity and Inclusion Charter of July 2017 discussed above, which focused on the Commission’s own management, include specific programs supporting women, disabled staff, LGBTI awareness and bias training, and monitoring age discrimination.  Despite references to the European Commission’s broad anti-discrimination mandate and Article 21, the Charter failed to identify any meaningful initiatives for racial and ethnic equality and diversity.

Conclusion

The European Commission has signaled its ongoing commitment to achieve gender-balanced boards and, as a result, has had some success in increasing the proportion of women on corporate boards, and more generally, in corporate management.  While the European Parliament and certain Member States have advocated for mandatory quotas, and some have implemented them at the Member State level, proposed directives applying mandates at the European level have not passed, although the EIGE’s data suggests such “hard” measures have been effective.54  Despite positive developments over the past 10 years, such measures failed to reach their stated target goals of 30% by 2015, and with a slowing rate of increase, are not on track to achieve 40% by 2020.  With respect to other forms of diversity, though the European Commission has implemented certain specific programs, such as supporting workplace diversity for women, the disabled, and the LGBTI community, and monitoring and preventing age discrimination, it has failed to implement meaningful, specific policies in furtherance of its broad conception of diversity enshrined in the Charter.

1  Article 2 of the European Union Treaty recognizes equality between women and men in European community, and the respect for the rights of minorities. See Article 21 on Non-discrimination “based on any ground” including, inter alia, “sex, race colour, ethnic or social origin, genetic features…[or] membership of a national minority.”  Article 23 of the Charter of Fundamental Rights of the European Union specifically addresses pay equality between women and men.  See Treaty on the Functioning of the European Union, art. 157 (addressing equal pay for male and female workers).

2  Council Directive 75/117/EEC (gender equality in pay); Council Directive 76/207/EEC (gender equality in employment, training, and employment opportunities; Council Directive 79/7/EEC (gender equality in access to social security); Council Directive 2000/78/EEC (gender equality in working conditions and treatment at work); Directive of the European Parliament and Council 2006/54/EC (gender equality in employment); and the Recommendations of the EU Commission No. 84/635 (proactive implementation of eliminating gender inequality).

3  2000 O.J. (C 364) 1, art. 23, http://www.europarl.europa.eu/charter/pdf/text_en.pdf.

4  Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: A Roadmap for equality between women and men, 2006-2010, COM (2006) 92 final, 2 (Jan. 3, 2006), https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52006DC0092&from=en.

5  Id.

6  Id.

7  Id. at 28.

8  Id., Annex at 9, http://ec.europa.eu/smart-regulation/impact/ia_carried_out/docs/ia_2006/sec_2006_0275_en.pdf.

9  2006 O.J. (L 403) 9, https://web.archive.org/web/20081218165847/http://ec.europa.eu/employment_social/gender_equality/gender_institute/index_en.html.

10  Id., art. II.

11  Management Board, Eur. Inst. for Gender Equal., http://eige.europa.eu/about-eige/eiges-structure/management-board (last visited Sept. 3, 2018).

12  Communication From The Commission to The European Parliament, The European Economic and Social Committee and The Committee of The Regions: Strategy for equality between women and men, 2010-2015, COM(2010)0491, Sec. 3 (Sept. 9, 2010), https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0491:FIN:EN:PDF.

13  Id.

14  Id.

15  See Green Paper: The EU corporate governance framework, COM (2011) 164 final, Sec. 1.1.3 (Apr. 5, 2011), http://ec.europa.eu/internal_market/company/docs/modern/com2011-164_en.pdf.

16  Id. at 7.

17  See responses to the Green Paper at http://ec.europa.eu/internal_market/consultations/2011/corporate-governance-framework/index_en.htm.

18  See id.

19  See Green Paper: The EU corporate governance framework, Euroshareholders reply (July 22, 2011), http://ec.europa.eu/internal_market/consultations/2011/corporate-governance-framework/individual-replies/euroshareholders_en.pdf.

20  Id.

21  Id.

22  Annex to the Communication From The Commission to The European Parliament, The Council, The European Economic and Social Committee and The Committee of The Regions, COM/(2011) 777 (Nov. 15, 2011), https://ec.europa.eu/info/sites/info/files/cwp2012_annex_en.pdf  (“Following the gender equality strategy, a Recommendation would aim to improve gender balance in company boards. As well as being a fundamental right, gender equality is crucial for the EU’s growth and competitiveness.”).

23  Proposal for a Directive of the European Parliament and of the Council on improving gender balance among non-executive directors of companies listed on stock exchanges and related measures, COM/2012/614 615 final (Nov. 14, 2012), https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52012PC0614&from=EN. See Press Release, Women on Boards: Commission proposes 40% objective, European Comm’n (Nov. 14, 2012), http://europa.eu/rapid/press-release_IP-12-1205_en.htm.  Public undertakings for purposes of the proposal are defined in Commission Directive on the Transparency of  Financial Relations between Member States and Public Undertakings as Well as on Financial Transparency within Certain Undertakings, COM(2006)111 (Nov. 16, 2006),
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32006L0111&from=EN.

24  Id.

25  Id.

26  Women in economic decision-making in the EU: Progress report, Directorate—General for Justice (Eur. Comm’n) (Dec. 20, 2012), https://publications.europa.eu/en/publication-detail/-/publication/8832ea16-e2e6-4095-b1eb-cc72a22e28df/language-en.

27  Id.

28  Id. at 11.

29  Id. at 15.

30  European Commission Press Release, Cracking Europe’s Glass Ceiling: European Parliament backs Commission’s Women on Boards proposal, Eur. Comm’n (Nov. 20, 2013), http://europa.eu/rapid/press-release_IP-13-1118_en.htm.

31  Gender Balance on Boards, European Parliament, http://www.europarl.europa.eu/legislative-train/theme-area-of-justice-and-fundamental-rights/file-gender-balance-on-boards (lasted updated July 20, 2018).

32  Strategic Engagement for Gender Equality 2016-2019, European Comm’n 6 (2016), https://ec.europa.eu/info/sites/info/files/strategic_engagement_en.pdf.

33  Id. at 7.

34  Id. at 9.

35  Id.

36  Id. at 14.

37  Gender Equality Index 2017: Measuring gender equality in the European Union 2005-2015, Eur. Inst. for Gender Equal. 37 (2017), https://eige.europa.eu/rdc/eige-publications/gender-equality-index-2017-measuring-gender-equality-european-union-2005-2015-report.

38  Id. at 47.

39  Id.

40  2018 Report on equality between women and men in the EU, Eur. Comm’n 31 (2018), http://ec.europa.eu/newsroom/just/document.cfm?doc_id=50074.

41  Id.

42  Id. at 32.

43  EU Commission’s new Diversity and Inclusion Charter, EU Business (July 19, 2017), https://www.eubusiness.com/topics/employment/diversity-inclusion.  The charter includes commitments for gender and other types of diversity, as discussed below.

44  Id.

45  Communication From The Commission to The European Parliament, The Council and The European Economic and Social Committee: EU Action Plan 2017-2019, Tackling the gender pay gap, COM(2017) 678 final (Nov. 20, 2017), https://eur-lex.europa.eu/resource.html?uri=cellar:19320cc0-cde3-11e7-a5d5-01aa75ed71a1.0022.02/DOC_1&format=PDF.

46  Charter of Fundamental Rights of the European Union, art. 23.

47  Directive 2000/43/EC (June 9, 2000), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32000L0043:en:HTML.

48  Directive 2000/78/EC (Nov. 27, 2000), http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32000L0078.

49  Directive 2006/54/EC (July 5, 2006), http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32006L0054.

50  Directive 2010/41/EU (July 7, 2010), http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32010L0041.

51  Directive 92/85/EEC (Oct. 19, 1992), http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A31992L0085.

52  Directive Proposal COM/2008/462, http://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A52008PC0426.

53  Directive 2004/113/EC, http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32004L0113.

54  See European Parliament, supra note 31.