About 5,000 board chairmen will receive a letter on their desk on Wednesday. Whether they want to state from now on how many women are on their supervisory or management boards, and how many women are active in senior management. If there is no balance yet – and there is a good chance – the company must indicate with substantiated plans how this will change in the future. Participation is required by law, but ‘zero’ is not yet a wrong answer for non-listed companies.
Transparency is going to be the carrot and the stick here
All figures and ambitions will then be publicly visible to everyone from the end of this year in a diversity portal officially opened on Tuesday. “Transparency is going to be the carrot and the stick here,” says Kim Putters, chairman of the Social and Economic Council, the organization responsible for reporting from the companies. According to him, companies will not like it if their figures are lagging behind. “Works councils and shareholders can check the state of affairs for each company, which target figures have been set for top and sub-top, and how people expect to achieve them.”
In addition, he hopes, female applicants will take this information into account when deciding whether to work for an organization. “Being an attractive employer is of great importance in these times of tightness on the labor market.”
It is the first time that Dutch companies are obliged to make visible where they stand in the field of male-female distribution in the highest echelons. The registration is a result of the Diversity Act that came into effect on 1 January 2022. This law is the provisional conclusion of a long discussion whether the promotion of women to the highest positions should be enforced with a quota regulation, as has happened in Norway, for example. Proponents saw it as the only way to break through the barriers, opponents argued that such a duty would actually reduce women’s stature. As soon as there are enough qualified women in the positions below the top, they argued, those appointments as directors or supervisory directors will follow automatically.
Read also: More women at the top? Only those companies that are required to do so can do that
Compromise
The Dutch law and the resulting diversity portal have become a compromise. Since last year, only listed companies have an actual duty to achieve a more balanced ratio in the supervisory board, which means that at least one third must consist of women – or men. Sitting supervisory directors need not fear for their jobs. Only in the case of a vacancy is it examined whether the appointment contributes to meeting the statutory criterion. If that is not the case, the appointment is null and void and the company must look for another (female) supervisory director.
At the end of last year, it became apparent that companies sometimes push the boundaries: meal delivery company Just Eat Takeaway turned it around in such a way that a woman was first appointed and – briefly – the correct quota was created, after which a man was appointed as chairperson.
The only rule that applies to management boards or boards of directors is that they must be open about matters and that they must indicate publicly how they are going to make the distribution between men and women more balanced. Because the registration obligation also applies to non-listed companies – approximately 5,000 ‘large’ companies – and by also asking for target figures for senior management, the often-heard argument that ‘there are no good, experienced women to be found for positions such as director or supervisor’ lose power. Companies must declare their figures and plans if they meet at least two of three criteria: the value of the assets is more than 20 million euros, the net turnover is more than 40 million or they employ more than 250 people .
Room for improvement
Companies have ten months to provide the data for 2022. Only then will it become clear whether public visibility will have an effect. The presentation of the diversity portal took place on Tuesday at the headquarters of PostNL, one of the few large companies with a woman as CEO, Herna Verhagen. “In order to get more women to the top, it is very important that there are enough women in middle and senior management. That is chefsache, the directors have to be constantly working on that,” says Verhagen.
This discussion really should have yielded results faster
Verhagen is pleased that companies now have to provide insight, ‘although as far as I’m concerned this discussion really should have yielded results faster’. There is therefore still plenty of room for improvement. This is evident from the annual Female Board Index, an initiative of Tilburg professor Mijntje Lückerath in 2022 the share of female directors at listed companies had gone from 14 to 15 percent. The increase was slightly more convincing among female supervisory directors: the share had risen from 33 to 38 percent in the 89 listed companies surveyed.
Regulations have also been introduced in other countries to reduce the differences between men and women in the workplace. This applies to the proportion of women in higher positions, but also, for example, to salary differences. In the United Kingdom, since 2018, companies with more than 250 employees have been required to declare all gender pay gaps, for all job levels. A reporting obligation will soon also be imposed by the European Union.
It is now becoming clear who the frontrunners are. And that should encourage other companies not to lag behind
In the UK, reporting on pay gaps has become mandatory, accelerating the discussion about the representation of women. Is the Netherlands not too soft towards companies? SER chairman Putters does not rule out the possibility that additional regulations will also be introduced in the Netherlands. But he is already satisfied that there can be more public reckoning about appointments: “It is now becoming visible who the frontrunners are. And that should encourage other companies not to lag behind.”