Equbusiness book VERSION 28SEPT2023 - Flipbook - Page 81
EXTERNAL FACTORS
7. REGULATING GENDER DIVERSITY ON CORPORATE BOARDS
By Burak Meydancı
7.1. INTRODUCTION
Despite global gender parity, the representation of men and women in corporate boardrooms remains disparate,
with men predominating. This incongruity, once accepted as the norm, has come under increased scrutiny in
recent years. Historically devoid of regulations addressing gender diversity, corporate boards were predominantly
male-dominated.
Several European countries, notably Norway, then France, Spain and other EU countries, considered this a
problem and have undertaken regulatory initiatives in response to mounting discussions on gender diversity in
corporations (Mensi-Klarbach et al. 2017). These nations advocate for gender balance through laws mandating
quotas in boardrooms. In contrast, some countries like the United States have primarily entrusted corporations
with voluntary actions to establish gender diversity on boards (Suk, 2012).
Following the footsteps of Norway and other followers, the European Union (EU) has regulated gender diversity
on corporate boards. Ultimately, the EU has introduced the 'Woman on Board' directive, formally known as
DIRECTIVE (EU) 2022/2381 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on improving the gender
balance among directors of listed companies and related measures, adopted on November 23, 2022. Alternative
to quota and Woman on Board Directive's solutions, Germany has enacted legislation addressing mothers' rights
within corporate boards. This way, Germany has supported diversity in corporate boards by enabling motherhood
rights for board members.
In this section, we will examine the national regulations adopted by European countries and EU laws and their
impact on women and corporations. Additionally, supplementary measures aimed at establishing gender balance
will be explored, contributing to a comprehensive understanding of gender diversity on boards of directors.
7.2. THE HISTORY OF GENDER DIVERSITY RULES ON CORPORATE BOARDS
The debates surrounding the underrepresentation of women in corporate roles and the imperative for gender
diversity on boards have gained momentum over the last two decades. However, until 2002, the number and
proportion of women in senior positions were not legally addressed, even as discussions advocating equal rights
and pay for women were ongoing. But finally, the focus on increasing the number of women in senior positions
found its origins in Norway (Mensi-Klarbach et al. 2017).
In 2002, Norway began to enact rules that would regulate gender diversity on corporate boards. Despite this
legislative initiative, the practical implementation of these rules did not occur until 2006. The regulatory
framework was conceived as an amendment to the Corporate Act of Norway to foster gender balance on
corporate boards. Its adoption faced deliberations that extended until 2006 (Huse & Seierstad, 2014). In the
meantime the proposition to regulate corporate boards for gender diversity was perceived as a radical move by
some Norwegians and other nations alike (Mensi-Klarbach, 2017).
It is crucial to note that, in 2002, Norway was already recognized as one of the most egalitarian countries globally.
Despite this reputation, the Norwegian Parliament engaged in extensive discussions over several years before
endorsing the gender diversity regulations.
