Israel

Melissa Fishkin, Associate
Paul Hastings (Washington, DC)

Shai Vander, Associate
Paul Hastings (New York)

Israel is one of a number of countries that has specific laws to address and combat discrimination against women, as well as representation of women on company boards of directors.

Equality for men and women has existed in the law since 1951, three years after the establishment of the State of Israel, with the passage by the Knesset (the Israeli Parliament) of the Woman’s Equal Rights Law (the “Equal Rights Law”).  The Equal Rights Law's intention was to ensure “women are to enjoy all rights enjoyed by men” and “special rights and privileges accorded women are to be preserved.”1 In 2011, a legislative amendment required “appropriate representation of women in inquiry commissions and national examination committees.”2  Another law, the Equal Employment Opportunities Law, was enacted in 1988.  The Equal Employment Opportunities Law prohibits employers from discriminating between their employees or those seeking employment based on a number of characteristics, including gender and pregnancy.3  With these guiding principles in mind, Israel went on to enact and implement laws and regulations that help achieve a more diverse representation on boards of public and government companies.

Public Companies

The Israel Companies Law (the “Companies Law”), enacted in 1999, is applicable to public companies in Israel and states that if a board is composed of only one gender, any new non-executive director appointments must be of the other gender, thus requiring that boards of public companies include at least one woman.4  An amendment in 2011 established that the Israel Securities Authority has the authority to impose monetary sanctions on any company that violates such provision.5

Catalyst, an international nonprofit organization focused on expanding the representation of women in business and in executive positions, in conjunction with the Strauss Group and the Israel Women’s Network, issued a series of published reports (the “Israeli Catalyst Reports”) studying representation of women in public companies in Israel.  The most recent Israeli Catalyst Report, from 2013, provides a comprehensive look at the percentage of women in senior executive positions and on the boards of directors of Israel’s 100 most highly traded companies on the Tel Aviv Stock Exchange (the “TA100”).  

According to the 2013 report, the Israeli workforce was made up of 47% women and 31% of executive positions were held by women.6  In comparison to 2012, the report points out that “[w]omen account for almost half of the workforce, but their status in the labor market is unstable and has even grown weaker.”7  In the TA100, 7.5% of CEOs were women (down from 7.9% in 2012) and 19% of the top executives were women (down from 20% in 2012).8

In terms of board membership, in 2013, 2% of TA100 board chairpersons were women (down from 5% in 2011 and 3% in 2012) and 17.2% of board members were women.9  For board representation, Israel was ranked sixth in the world out of the 44 countries examined (down from fourth place in 2012).10  In the TA100, 89% of the companies had at least one woman on the board (down from 91% in 2012).11  For context, this statistic tied the TA100 with the USA Fortune 500 and UK FTSE 100.12  The report notes, “[s]ince 2012, there has been a rising trend in the percentage of women board members in the banking industry (up from 19.4% to 22.4%), in the wood, paper and paper products industry (up from 12% to 22.2%), in the computer industry (up from 12.5% to 17.2%) and in the oil exploration industry (up from 12.2% to 15.4%);”13 however, the percentage of women board members dropped between 2012 and 2013 in other industries (communications and media; electrical and electronics; and financial services).14

Although the Israeli Catalyst Reports are the most robust studies on women on boards pertaining to Israel, there have not been any new reports released with updated facts and figures since the 2013 report.  Other more recent articles and reports have provided glimpses into the current landscape.  As of 2016, Israel was one of 16 countries that had 100% of boards with at least one female board member, and the average was approximately two women per board.15  Furthermore, 20% of CEOs were female and 20% of CFOs were female.16  In the TA25 (Israel's 25 most highly traded companies) in 2016, 25% of board members were women and 12% of boards had women chairpersons.17

Government Companies

A government company, as defined in the Government Companies Law of 1975, is a company in which the State (or the State together with another government company) has “more than half of the voting power at general meetings or the right to appoint more than half the number of directors.”18  Government companies, or state-owned enterprises (SOEs), are subject to the Government Companies Law, and are under the authority of the Government Companies Authority.  In 1993, an amendment to the Governmental Companies Law stated that all SOEs must have adequate representation of both genders on their boards.19  Further to such amendment, in 2007, a government resolution stated that SOEs must have an equal representation of both genders on their board, thus requiring 50% of those boards to be made up of women.20 

Since 2013, the Government Companies Authority has implemented a procedure entitled the “Team of Directors,” which is a list of recommended candidates that government ministers, who are responsible for appointing directors to SOEs, rely upon for selecting and appointing directors.21  This procedure includes set quotas for certain members of the population, including women. 22   Additionally, in 2013, the Israeli Authority for the Advancement of the Status of Women conducted a training program for supervisors on the status of women in government companies,23 highlighting the Israeli government's focus on ensuring the issue of diversity on boards, especially for women, is in the forefront. 

Since 2007, there has been a 10% increase in the rate of women on the boards of SOEs, 33% in 2007, 40% in 2011 and 43% in 2017 (of the 437 total directors serving in 2017, 189 were women).24  In addition, 67% of government companies had reached the equal representation standard set by the 1993 Governmental Companies Law Amendment.25  Following implementation of the Team of Directors, there was a significant increase in the representation of women on boards of government companies: 44% of the directors appointed from the Team of Directors were women.26

Private Companies

There are no specific laws requiring gender representation on boards of private companies.  There is also limited publicly available information that specifically relates to the composition of private boards.

Conclusion

While Israel is still striving toward the goal of gender equality among public, private, and government companies, there is reason for optimism given the relatively high percentage of women in executive positions and on boards compared to other countries.  In the World Economic Forum rankings on the global gender gap index, Israel ranks number one (along with 26 other countries) in educational attainment,27 potentially positioning women for higher representation in leadership roles in years to come.

1 Women’s Equal Rights Law 5711-1951; Albeck, P., The Status of Women in Israel, 20 Am.  J. Comp. L. (1972).

2 Ensuring equal rights for women in Israel, Israel Foreign Affairs (Oct. 25, 2015), https://israelforeignaffairs.com/2015/10/ensuring-equal-rights-for-women-in-israel/.

3 Equal Employment Opportunity Act 5748-1988.

4 Part VI, ch. 1, art. E(d), Companies Law 5759-1999.

5 Annex No. II, Statistic Information, Attached to the 6th Periodic Report Concerning the Implementation of the International Convention on the Elimination of All Forms of Discrimination Against Women (CEDAW), State of Israel, Ministry of Justice (2017), https://tbinternet.ohchr.org/Treaties/CEDAW/Shared%20Documents/ISR/INT_CEDAW_ADR_ISR_27760_E.pdf.

6 The Israeli Catalyst Report, Women Leading Business, The Fourth Israeli Census Report 2013 Women’s Representation in the TA-100 Companies Index 5, The Strauss Group & Israel Women’s Network (Mar. 2014), https://www.strauss-group.com/wp-content/blogs.dir/3/files/sites/3/Israel-Catalyst-Census-TLV-100-2013_Final.pdf.

7 Id.

8 Id. at 6.

9 Id.

10 Id. at 13.

11 Id. at 6.

12 Id. at 14.

13 Id. at 12.

14 Id.

15 2016 Global Board Diversity Analysis, Egon Zehnder (2017), https://www.gbda.online/assets/EZ_2016GBDA_DIGITAL.pdf.

16 Id.

17 Women in the boardroom: A global perspective, Deloitte (2017), https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Risk/Women%20in%20the%20boardroom%20a%20global%20perspective%20fifth%20edition.pdf, citing Israel Securities Authority.

18 Government Companies Law, 5735-1975, ch. One, 1(a).

19 Deloitte, supra note 17, citingGovernment Companies Law, Sec. 18A.

20 Id., citing The State Comptroller of Israel Report on the Representation of Women at Senior Positions in Public Service (Mar. 2014).

21 State of Israel, supra note 5, at 27.

22 Id.

23 Id. at 28.

24 Id. at 26.

25 Id. at 27.

26 Id.

27The Global Gender Gap Report 2017, World Economic Forum(2017), http://www3.weforum.org/docs/WEF_GGGR_2017.pdf.