The European Central Bank (ECB) is often criticized for its inefficient or untimely decisions. Now critics can add another pejorative adjective to that list: discriminative. At least in the European Parliament’s (EP) opinion, which postponed a hearing with the nominee for a vacant position on the ECB for one simple reason: the candidate was male.
In mid-summer, members of the European Parliament Committee on Economic and Monetary Affairs (ECON) were due to meet Luxembourg central bank governor Yves Mersch, nominated by eurozone finance ministers and recommended by the Council of the European Union, and debate his accession to the European Central Bank board. But the vote on his appointment never happened.
Sharon Bowles, the British member of ECON, raised concerns about gender imbalance on the ECB board, and apparently convinced others not to proceed with the nomination. Her worries are not without apparent foundation: the previous vacancy on the board was filled by Belgian’s Peter Praet, who defeated a female applicant, the Slovakian Elena Kohutikova. The ECB’s executive board and governing council now consist of 22 men. Were Mersch given a seat, there would be no vacancies until 2018. The bank’s previous track record is not any better: only two women, Finland’s Sirkka Hämäläinen and Austria’s Gertrude Tumpel Gugurell, have ever served on the board.
Eurozone governments select candidates for ECB board positions, and the EP has no legal power to reject nominations. This has been the first complaint since the bank was set up in 1998. The appointment, however, needs to be concluded soon as the three-month deadline since Mersch’s nomination is approaching. Since the parliament does not have a right of veto, the European Commission and the European Council may circumvent the EP altogether, saying the deadline has passed.
Whatever they decide, the problem of women being underrepresented in boardrooms remains unsolved. Forced placement should not be an answer, but practice shows a little push never hurts.
So believes the European Union’s justice commissioner, Viviane Reding, who is backing a motion to set quotas and timetables to increase the number of women on the boards of public companies. The commissioner’s proposal to make companies employ more female directors may face resistance from EU states led by the UK, who prefer voluntary measures to encourage more female business leaders. The draft legislation says companies listed in EU member countries would face sanctions if they failed to reserve at least 40% of their non-executive board seats for women.
Defining the conditions of the sanctions would be the responsibility of member states. The proposal is expected to be published this month or next.
The representation of women in board positions is highest in northern European countries like Norway (42%), Latvia, Finland and Sweden (approximately 30%), and lowest in the south in Greece, Italy, Cyprus and Malta (under 10%). At the executive level, the ratio of women on boards is even lower.