Men appointed to boards because it’s ‘easier’

Women are still very underrepresented in Swiss company boardrooms Peter Klaunzer / KEYSTONE

Few women sit on company boards in Switzerland - and the rate is low compared to other European countries. While parliament on Tuesday put off deciding about quotas, the business world has clear ideas about what should be done.

The Senate on Tuesday threw out a revision of Swiss Company Law, that would have included the issue of female quotas for company boards. It has now gone back to committee stage to be revised.

The most important duty of a company board is to oversee top management – and to have a 360-degree view of what should be done. That’s why members should preferably bring diverse skills and experience to the table, says Rudolf Meyer, founding member and honorary present of Actares,External link an organisation representing small shareholders that promotes sustainable company policies.

But most Swiss boards are dominated or are completely made up of men. There are in fact only 16% women in the boards of the 100 largest Swiss companies. “This is despite the fact that everybody knows that short-term upheavals are less disruptive and that there is more serious decision-making in mixed committees. Also there is a better performance overall,” Meyer said.

There are enough qualified women around who meet requirements, who would be ready to accept the responsibility and to get involved, added Meyer.

Old boys’ club

In some cases, the differing ways in which men and women perceive themselves may play a role. “Men are much more prepared to accept several mandates, although in many cases you are left wondering how they can possibly manage all these duties. Women are probably in general more cautious and conscientious on this point,” Meyer continued.

Another, more key reason for women’s underrepresentation, is that it simply takes more effort to find a woman to sit on a board, he argued. Most firms recruit board members themselves and often with minimum effort. That means getting someone from your wider circle, known to you. And as men usually have a better network than women, male board leavers are normally replaced by men.

This is also the viewExternal link of the SwissBoardForum,External link SBF (formerly Swiss Institute for Board Members) lobbies for “the promotion of professional board activities”. For the SBF, the low numbers of women on boards is mostly not down to decisions against women as such, but from “a certain laxity or even convenience”.

The SBF agrees that the best possible boards are “diversified and a reflection of the company’s challenges, market and potential”.

But it believes that it’s up to companies to promote women, not lawmakers.

Company responsibility or law?

SBF president Silvan Felder gives two reasons against using legal measures to boost the number of women representatives on executive boards. “Listed companies are in the spotlight more than ever before. They can no longer can afford to ignore gender diversity, especially for image reasons,” he said.

In addition, the Swiss Code of Best Practice for Corporate Governance,External link drawn up by the Swiss Business Federation economiesuisse, now requires companies to explain why they do not adhere to the recommended composition for boards (including women’s representation).

However, this recommendation does not go as far as the government’s proposal, which wants gender quotas in boardrooms of large companies, with more than 250 employees, enshrined in the Code of Obligations – that regulates contract law and corporations.

Firms would have to ensure that 30% of the Board of Directors and 20% of the Executive Board is female, over the next five and ten years respectively.

However, the bill stops short of imposing sanctions for companies which fail to implement the quota. Instead, it proposes a “comply or explain” regulation as a best practice standard.

+ Read about the background to these gender equality quotas

Felder says the guidelines are desirable but if they are put into company law, they would be “a further example of regulation-craziness in politics”.

Shareholder group Actares does not agree. There needs to be a more radical approach to policy, it argues. It welcomes the government’s proposal. Actares honorary president Meyer is amazed that opposition to this “flexible solution” is also so strong in parliament, because it is not such a significant attack on company freedom as opponents say.

The government’s proposal was accepted by a small margin in the House of Representatives in June. But the Senate was not happy with the whole packet of measures to revise company law – not just because of the quotas issue – and sent it back to its legal committee on Tuesday. This means that promotion of women in boards is currently stalled on a political level.

Women onboard

In a recent report on Swiss public television SRF on the issue of women in boardrooms, Karin Lenzlinger, who sits on several boards, said she was against quotas because she wanted to be asked to take a post due to her experience, not to fill a quota.

Firms seem to be looking for women with board experience, rather than for new faces, the report found. Esther-Mirjam de Boer, whose company specializes in finding female board members, said that women with board experience often receive multiple requests and cannot take all the work on. For her part, Lenzlinger said there were enough qualified women around, but that they must become more visible. She did this by taking part in business forums, getting involved in politics.