Firms can win prizes but also be fined over ratios of women in management. By Laura Colby and Jacqueline Simmons.
France's biggest companies last year overtook the US with the highest proportion of women on boards of directors.
To foster equality between the sexes at its biggest companies, France is using both the carrot and the baguette.
Firms with the best records of getting women into positions of power were given prizes late last week by the Ministry of Women’s Rights, which ranked advancement of women at 120 publicly traded companies that make up the Societe des Bourses Francaises index. Companies that fail to work on gender equality may be punished.
”The purpose of these rankings is to shine light on the gap between men and women in the governance of companies, to showcase the companies that have taken the matter to heart, and to encourage others to do the same,” Najat Vallaud-Belkacem, the minister, said in a statement.
The rankings were based on criteria including the number of women on the executive committee, the make-up of the board of directors and its compensation and recruiting committees, and whether managers’ pay was based in part on achieving goals of equality between the sexes. Phone company Orange SA came in first, followed by Medica SA, which operates a chain of retirement homes, and Compagnie de St-Gobain, a maker of glass and building materials.
”I know how attached companies are to their images,” Ms Belkacem said. ”From now on, the energy that companies spend fighting inequality between men and women should also be a criterion for a good or bad reputation.”
Ignoring inequality may hurt more than a firm’s reputation if she gets her way. Last month, Ms Belkacem, who’s also the spokeswoman for the government of President Francois Hollande, introduced a draft law that would fine companies that fail to meet standards for equality between the sexes up to 1 per cent of their total payroll per month.
The law would ban non-compliant companies from bidding on public contracts. It also includes a measure to offer fathers a six-month paternity leave. Mothers already have state-mandated leave.
”Having objectives is very important,” said Mouna Sepehri, executive vice-president in the office of the chief executive officer at Renault. The carmaker has set a target of 30 per cent for recruiting women engineers, based on the fact that about 30 per cent of engineering graduates are women. So far, the company is at 27 per cent, Ms Sepehri said. Renault came in at No. 46 in the ranking.
France required large companies to have non-executive women account for at least 20 per cent of board members by 2014, and 40 per cent by 2017.
”We have more women on boards,” thanks to the quota, said Virginie Morgon, chief investment officer of investment firm Eurazeo SA. ”We have to translate this to the executive level.” Ms Morgon sits on the boards of hotelier Accor SA (ranked No. 9) and L’Oreal SA (No.37).
France’s biggest companies last year overtook the US with the highest proportion of women on boards of directors. A quarter of board members in France are women compared with 20 per cent in the US.
”When [Ms Belkacem] was named minister, she focused on violence and women’s rights, but has enlarged the role,” said Veronique Morali, president of the Women’s Forum. ”She’s put herself under the flag of the economy and companies.”
In Britain, where quotas are voluntary, the 30 Percent Club ranks FTSE 100 companies by the scale of female representation on boards, but doesn’t do a ranking that also weighs women’s roles in management. ”I think we should look to do similar in the UK,” said Helena Morrissey, founder of the 30 Percent Club.