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“Women on Board” Directive – A Chance for Real Change?

CAREERS"Women on Board" Directive - A Chance for Real Change?

On the occasion of International Women’s Day, many people ponder over the ideal gift. However, what women need is equal treatment at every level of their careers. Will the implementation of the “Women on Boards” directive make a difference in this regard? – explains Patrycja Załuska, a labour market expert from SWPS University.

The discussion about equal opportunities for women has been ongoing for many years and has gone through various stages. Thanks to the “Women on Boards” directive, this debate stands a chance to set a coherent and constructive direction that promotes equal treatment.

The most significant progress related to increasing the presence of women on the boards of companies has been noted in those countries where binding recommendations have been introduced. Initiatives that left enterprises free to self-regulate, introduced in several member states, did not bring significant changes in this area.

“To make equal treatment a reality, it is necessary to combine two different concepts: a formalised approach to equal treatment and the implementation of informal bottom-up initiatives aimed at achieving real equality. A comprehensive approach is key and necessary in the process of achieving equal treatment, which includes supporting gender-balanced decision-making processes in companies at all levels, as well as narrowing the wage gap between women and men” – explains Patrycja Załuska, a management expert at SWPS University.

By July 2026, all stock market listed companies in the European Union with more than 250 employees will have to change the way they form their boards. The new rules require at least 40% of director positions, which are not related to operational activities, to be occupied by individuals from the underrepresented sex. Companies that do not comply with these regulations will be fined.

Currently, there is a clear gender imbalance on the boards of large companies in the EU. In 2021, only about 30.6% of board members in the largest listed companies were women. This situation varied between individual member states, for example, in France, the representation of women on boards was 45.3%, while in Cyprus, only 8.5%. Even with the introduction of gender balance on boards, less than 10% of the largest listed companies had a woman in the position of CEO or Managing Director in 2022.

“Discussing equal access for women to both executive and non-executive positions, we address companies’ readiness to accept diversity. If boards do not include diversity in their strategy, for example by changing recruitment processes, introducing inclusive policies, and changing organisational culture and management style, even the best initiatives or recommendations will not bring the desired results” – explains the expert.

Benefits of Diversity

Striving for diversity is worthwhile as it brings many benefits, including:

1. Increasing innovation through diverse perspectives in teams, leading to propositions of more creative solutions in organisations.
2. Strengthening effective management, which takes into account diverse views on the market and moves away from limited, one-sided thinking.
3. Reaching new market niches and acquiring new customer groups, thereby strengthening current competitive advantages and securing future activities.

As companies are now expected to conduct business in a sustainable and ethical manner, their boards face challenges not only in maintaining competitiveness but also in adapting to national and EU regulations, such as the CSRD (Corporate Sustainability Reporting Directive), and in relation to transparent wages. Faster internal changes in organisations are needed, especially as research from December 2022 shows that only 17.2% of board members of Polish companies are women. Moreover, the representation of women is increasing very slowly, by only 0.6 percentage point per year, meaning that achieving equality will take many years.

“The lack of women’s representation on boards is due to various obstacles they encounter in their career paths. From the very beginning, at the recruitment stage, women grapple with stereotypes and unconscious biases. Then, during development within the organisation and upgrading qualifications, the system often disregards women’s career breaks. As a result, there is a lack of a sufficient number of female candidates for promotion to managerial positions” – explains the expert.

Building Equal Opportunities in Practice

Equal opportunities mean equal access to opportunities and resources in the organisation for all employees. They can become reality if we look at this challenge from the perspective of employees’ professional lives. Adapting HR processes to the employee’s career path can bring many benefits, such as:

1. Strengthening integration and belonging among employees.
2. Supporting line managers who have a significant impact on employees in creating a positive work environment.
3. Providing a comprehensive approach to equal treatment, opportunities for development and promotion, which increases the pool of potential female candidates for managerial and non-executive positions.
4. Ensuring the presence of an inclusive approach that takes full advantage of diversity at every stage of the company’s life.

“Introducing a requirement of 40% women’s participation on boards may be a step in the right direction, but it will not be enough to solve long-standing issues. The actual participation of women on boards depends on many factors such as recruitment, business goals, and promotion policies. If we do not adjust HR processes to take into account diversity, including gender, skills and experience, we will not build a sufficient pool of candidates for executive and non-executive positions. This could result in maintaining homogeneous management styles and decisions, impacting the structure of the organisation and its business environment” – Patrycja Załuska explains.

Another problem is the lack of formal networks supporting women in organisations, which can lead to favouring candidates already known to managers. HR processes and diversity policies can be part of the solution to these problems.

Although HR processes and diversity policies may seem like a minor element in the face of overall economic challenges, any change can have a significant impact. Failure to take into account diversity can affect the financial results of companies and their valuation by investors, which is why it is worth focusing on these areas. The “Women on Boards” directive can help organise and increase the synergistic effects of expected results.

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