Unlisted companies will be exempt from female quotas in their domes

In full controversy over the reform of the “if only yes” law and on the eve of International Women’s Day, the Government decided to dust off the initiative to force large companies install more women to their domes. They represent 60% of all university students, but hold only 8% of the presidential positions in European governing boards, where they are conspicuous by their absence.

What is the measure?

He ministerial council will accept the Law on equal representation of women and men in decision-making bodies this Tuesday. The rule will require that at least four out of every ten seats on company boards be held by the “underrepresented sex”, i.e. by women.

Which companies will be affected?

Odds will only affect listed companiesthat is, those who are present in IBEX 35) and the rest of the continuous market (84). At least 17 of the 35 on Ibex would have to make changes to their organization to meet that threshold, like the other 69 listed companies that are not in the selection. And that is that of the 119 companies that would receive the increase, only 32 companies currently meet the 40% target, according to a report by Atrevia and IESE. In addition, they must comply with the standard “subjects of public interest” with more than 250 employees and an annual turnover of more than 50 million euros—or with assets estimated at more than 43 million—. Micro, medium and small enterprises (SMEs) are exempt.

What are subjects of public interest?

These are companies that operate on secondary stock exchanges, credit institutions and insurance companies that are subject to supervision, and which do not necessarily have to be on the stock exchange. This section also includes investment services companies, mutual investment companies that have had at least 5,000 clients or 5,000 shareholders for two consecutive years — and management companies that manage the aforementioned institutions—, pension funds that have had at least 10,000 participants for two consecutive years and management companies that manage these funds. Likewise, banking foundations, payment institutions and electronic money institutions receive this fee. Even companies whose net turnover exceeds 2,000 million euros and whose average workforce exceeds 4,000 workers for two consecutive years.

When will it come into force?

The law will apply to listed companies from July 1, 2024 and will be introduced gradually in the case of entities of public interest, which must reach the threshold of 40% of women on their boards of directors on June 30, 2026.

Is it a pioneering law?

Although the Government assures that this law “will be a reference in Europe”, the truth is that it is nothing more than transposition – adoption into the national legal system – directive Europe approved last year after a decade of negotiations in the European Union (EU). The aforementioned decree was published on November 23, 2022. From that date, governments have two years to adopt it and, as they stated in the agreement, it is up to each executive to decide on the degree of ambition of the decree. In the case of Spain, The government limited itself to observing the established minimums and the prescribed calendarbut you can apply stricter requirements if you want.

Germany passed a law last year mandating every third management position in listed companies to be women, and every second in the case of semi-public companies. The measure was aimed at 70 companies in the German DAX, 30 of which did not even have a woman on their boards of directors.

Will it apply to public companies?

The EU has set a minimum presence of 40% of non-executive board positions or, alternatively, 33% of all senior management positions in privately listed companies. However, if a semi-public company is listed on a regulated market, it must also adapt its leadership. “Due to their nature, it is appropriate for public companies that fall within the scope of the directive to serve as a model for the private sector,” the European regulations state.

Will there be penalties for those who break the law?

That. The government must explain the punishment mechanism to Brussels in detail before December 28, 2024. According to the directive, the said sanctions must be “effective, proportionate and dissuasive.” It is up to Spain to decide on the degree of hardness: “They may consist of fines or the possibility for a judicial body (court) to annul or declare null and void the decision on the election of a manager”, says the regulation, which will expire on December 31, 2038 if the European Commission considers that the goal has been met. In addition, a list of companies meeting the targets will have to be published each year to track progress.

The presence of women in high positions has quadrupled in the last decade

With a lot of effort and many obstacles, women have made their way in companies, gradually breaking through the glass ceiling that still prevents them from reaching the highest management positions. In the last decade, their presence in the leadership of Spanish companies has almost quadrupled, from 9.5% to almost 36%, according to the latest statistics from the European Institute for Gender Equality (EIGE). The average is already very close to the 40% proposed as a target. Countries like France, Italy or the Netherlands have already exceeded it.

Despite progress in recent years to bridge this gap, the truth is that inequalities persist and are very difficult to justify with the data at hand: despite the fact that the percentage of employed women with a higher degree in Spain (83%) is almost double that of men (43%), they have difficulty reaching positions of maximum responsibility. In Ibex 35, only three companies are run by women. And, although their presence in the boards of directors of companies of the Spanish selection has increased to 37%, the truth is that only 15% of the members of the executive boards —responsible for making decisions— are women.

There is also a noticeable gap, of course, in the quality of employment and wages. 21.4% of employed women in Spain in 2022 had a part-time contract, a percentage that drops to 6.4% among the male population employed, according to the estimates of the Observatory for Employed Women collected by Europa Press.