Quotas for women in the boardroom could be imposed by the European Union after EU Justice Commissioner Viviane Reding announced a drive to tackle the underrepresentation of women on boards.
“Personally, I am not a great fan of quotas. However, I like the results they bring,” Reding said in a statement.
While women make up the majority of university graduates in the EU, this has failed to trickle through to seats in the boardroom. The European average for female representation on company boards is currently 13.7 percent, according to European Commission figures.
Reasons ranging from sexism in the workplace to women’s lack of confidence relative to men have been cited for this low representation.
“I believe it is high time that Europe breaks the glass ceiling that continues to bar female talent from getting to the top in Europe's listed companies,” Reding said.
She called on companies to increase the number of women on boards to 30 percent by 2015 and 40 percent by 2020 last year – but so far these targets are still far away.
Consultants McKinsey have warned that Europe is risking a major "talent shortage" in the next couple of decades if current trends continue.
“Self-regulation so far has not brought about satisfactory results. The lack of women in top jobs in the business world harms Europe's competitiveness and hampers economic growth,” Reding said.
Her plans to tackle the low numbers of women on boards have already met with dismay from the business community.
Helena Morrissey, chief executive of Newton Investment Management and founder of the 30% Club, which aims to increase female representation in British boardrooms, said in a statement: “While we applaud any move to encourage greater female representation at an executive level, we believe mandatory quotas are both unnecessary and potentially damaging.”
There are wide variations across Europe in the representation of women on boards.
Norway, which has a quota system, has 42 percent, while Sweden has 25 percent, and Germany and the UK both have 16 percent.
The countries with the lowest levels of women on the boards of their biggest companies are often those which have performed worst in recent years. Malta, with 3 percent, and Cyprus with 4 percent, have the lowest level of female representation. Greece, Estonia, Italy, Portugal and Hungary are also well below the average.
A Europe-wide quota would be easier for companies operating in different countries to navigate, Reding argued.
Earnings at companies with at least one woman on the board were significantly higher than in those that had no female board member, according to a recent study by Ernst & Young.
Morrissey said: “Quotas actually undermine the principle of equality and are patronizing to women. Even those countries with quotas are still struggling with genuine equality and there’s evidence that shareholder value can be destroyed if quotas are imposed. Directors need to be there on merit. Investors don't want quotas, boards don't want quotas and women don't want quotas."