Authored By The Worden Report
Mandating More Women on Corporate Boards in the E.U.
In 2012, women made up 13.7% of board positions in large listed companies in the EU, and 15% for nonexecutive board positions, according to The Wall Street Journal. In the US, according to Kay Koplovitz of USA Network, the number of women on corporate boards had been stalled at more or less 15 percent for over ten years. Whereas in the US, people would look at Congress to enact a uniform inter-state standard or else leave the matter to individual corporations, the EU has other alternative means, such as the directive. That device relies on the state governments to decide on the penalties as well as enforcement against violators of the EU law. The “cost” of this flexibility is a possible dilution in the union attaining the policy’s aims. That is, even as the ideological diversity within the empire-scale union is accommodated, advocates of more female representation on corporate boards may be disappointed.
The college of commissioners at the European Commission, the EU’s executive branch, decided in November 2012 that rather than have federal fines for companies in the EU that fail to have female board membership of at least 40% by 2020, the Commission would propose a directive whereby both the targets and sanctions would be left to the states. Meanwhile, in the US at least four states had decided not to expand health-insurance subsidies to the uninsured poor—the federal Supreme Court having given the states that right under “Obamacare.” Someone looking at this might conclude that the directive on women on boards in the EU would similarly enable “red states” to opt out.
At the time of the Commissioners’ debate, considerable diversity at the state level existed in the EU with respect to public policy on quotas. In the state of France, women made up 22.3% of board-membership at blue-chip companies at the time—the state having already introduced quotas with an aim of 40% by 2017. The Netherlands too had enacted mandatory quotas, but without major penalties. Spain and Italy had enacted only voluntary quotas, and as one might expect, the British House of Lords had criticized the very notion of mandatory quotas. This diversity is innate, and thus entirely reasonable in a union as large as the EU. We could expect the same sort of spectrum from state to state in the US.
Inhibiting interstate diversity has a cost, as a one-size-fits-all federal rule does not accommodate the differences and thus builds political pressure within the federal system. Yet obviating this cost by the EU directive (and the expanded-medicaid opt-outs from “Obamacare” in the US) is bound to result in another sort of cost. In particular, the goal of 40% female representation union-wide will almost certainly by stymied by the states refusing to implement the directive by enacting an involuntary mandate with teeth. Either way, there is a cost. Giving each its due is difficult because the costs are qualitatively different and thus are difficult to compare and weigh with each other.
In the US during the twentieth century, the overwhelming trend was to avoid the cost in terms of reaching goals union-wide on particular issues. This came at the expense of recognizing the legitimate differences between the states. Considerable pressure of pent-up or frustrated diversity had doubtless accumulated in the process, though an eruption could presumably be decades or even centuries off. The accent in American politics had been on achieving particular policy aims, union-wide, rather than on maintaining a balance in the federal system between the union and the states. It is an open question, at least as of 2012, whether the EU too would follow such a trajectory as it matures past its development stage.
That EU states had been extant far longer before creating a union may delay any such “inevitable” consolidation. More significant, however, may be the more direct involvement of heads of the state governments in the European Council (rather than having delegates, or senators) along with the established device of the directive as an alternative to union-wide rules. That is to say, rather than relying on the states’ rights ideology at the state level in the current generation (something that was also the case in the US during its first hundred years), the federal design might turn out to be more decisive, though perhaps ultimately insufficient if a future generation wants or insists on union-wide achievement of particular policy-aims.
Ideally, particular policy-aims should be balanced against the need in any empire-scale federal system to allow its states some breathing room owing to the inherent differences between them. The viability of this principle does not depend on what the people prefer, as long as there are differences between the states culturally and ideologically and public-policy aims whose validity can claim to be universal in nature. As modern American history illustrates, it can be all too tempting to succumb to the normative point that women should not be discriminated against and thus suspend one’s concern for the viability of diversity within the federal system. Yet the hegemony of particular ideological or normative goals can unintentionally compromise the achievement of a more perfect union.
Frances Robinson, “EU Directive to Balance Women in Boardroom,” The Wall Street Journal, November 13, 2012.
Kay Koplovitz, “Women on Corporate Boards in U.S. Lagging the Global Trends,” The Huffington Post, September 19, 2012.
Authored By The Worden Report
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