Women Directors

The Italian Way and Beyond

P. Profeta, L. Aliberti, A. Casarico, M. D'Amico, A. Puccio

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137427489
• Topic: Business
• Subtopic: International Business
• Index: Business

Women Directors analyzes the Italian law on gender quotas in boards as a vital opportunity for the country and a key international case. It provides a broad perspective of the new Italian experience, which has the potential of influencing the way of addressing gender issues worldwide.

Introduction

A law recently passed in Italy mandates the temporary increased representation of females on boards of publicly listed and state-owned companies in Italy. The law requires that these boards have at least 33% male and female genders respectively, and sets a target of 20% for the first of the three mandates during which the law will remain in force. In the event of non-compliance, a progressive warning system with monetary fines culminates in the eventual dissolution of the board. While traditionally a poor performer on issues of gender equality, this new law has the potential to make Italy ‘best in class’.

The Italian law is receiving considerable attention in Europe, which is setting the agenda of promoting gender equality in business and more in general in society, and we expect this attention to expand all over the world.

The Italian law not only provides a unique opportunity for the country, but also makes for a very interesting case to analyse and study. Norway introduced a similar law a few years ago and since then it has represented a benchmark and the reference country for studies and analyses on the implementation and the impact of gender quotas in boards. The Italian experience will provide a new benchmark to explore. From now on research on Italy will be essential for a better understanding of the working of gender quotas in boards.

This book represents the first contribution which analyses the Italian law on gender quotas in boards as a vital opportunity for the country and a key international case. It provides a broad and complete perspective of the new Italian experience, which has the potential to influence the way of addressing gender quotas issues worldwide.

The Italian experience contributes to the arguments for setting gender quotas as best practice for promoting gender equality and as an efficient tool to exploit the best talent at top levels. These are key objectives on today’s agenda in many countries.

Promoting the idea that women may reach top positions without changing their identity is the beginning of a pervasive cultural revolution. The presence of women in leadership positions is in itself a key driver of performance and business in all countries. It also acts as a multiplier for the increased participation of women in all socio-economic spheres, which in turn is a major engine for world development and growth.

1.1 Gender quotas: the Italian way and beyond

The Italian way

This book illustrates the ‘Italian way’ to achieve a more gender-balanced representation in boards of directors. The key elements of the Italian approach can be summarized as follows: (i) the time-limited nature of the law on gender quotas, (ii) the synergies between public and private initiatives during both the legislative process and the implementation of the law, (iii) the promotion of an ex-ante intense debate to make female representation in boards a shared objective of the business community and the society at large.

We emphasize that the nature of the law itself is a crucial interesting element, together with the way in which the consensus among different parties was built, the manner different constituencies worked together to pass the law, and the role played by the principle of equality (both in a formal and in a substantial meaning) in the Italian Constitution. The process of interaction between public and private spheres is distinctive: while the law is promoted and approved by the Italian parliament as a severe form of state regulation for the targeted companies, it is also supported by the market, through a large set of initiatives undertaken in parallel by an extensive group of stakeholders, which includes companies, associations, and also individual citizens. Moreover, the law applies to both the private and the public sector. This public–private interaction represents a relevant, and to some extent, unexpected, ingredient in the process of implementation of gender quotas, which challenges traditional views on the role of the state in the economy. The nature of the process of the Italian law, from the initial design to the enlarged consensus and the final approval, as well as the features introduced in the law, guaranteed the maximum beneficial impact of regulation, in terms of both economic and policy impact.

Which form of state intervention?

Policies have a crucial role in shaping gender differences and promoting gender equality. Public interventions vary from welfare state provisions to affirmative action programs. Some countries also adopt active labour market policies, which aim at supporting female participation and female careers. Maternity and paternity leaves and daycare services for small children are also part of this set of interventions. In general, these interventions are present in most modern countries, although they vary in type, extensions, and key features, and thus also in their effectiveness and consequences. Gender quotas can be seen as an extreme form of state intervention in promoting gender equality, as they involve regulation of the private sector by law.

The adoption of different forms of state interventions in shaping gender differences in the socio-economic context has been related to the role that a country recognizes for government intervention in the economy, and differs across countries by size, composition and scope. A useful classification is provided by Esping-Andersen (1990), who refers to four models of welfare state, the main component of government intervention in the economy: (i) the corporative welfare state, dominant in Continental Europe (France, Belgium and Germany, for instance), features low redistribution and a high level of social protection, which is, however, guaranteed only to selected individuals, typically workers and people who have been active on the labour market; (ii) the social-democratic welfare state, which characterizes Scandinavian countries, also features a high level of social protection but access depends on residence or citizenship rather than on labour market participation, and thus the welfare state is more inclusive; (iii) the familiar welfare state, adopted by Mediterranean countries (Greece, Italy, Spain, and Portugal) is characterized by high social protection only for the breadwinner and a limited provision of services by the market; (iv) the liberal welfare state, dominant in Anglo-Saxon countries (UK, US, New Zealand, Canada) displays a low level of social protection for individuals: it only provides a safety net and it leaves individuals to rely on the market for private insurance provisions, mainly in health and pensions, possibly with large fiscal concessions by the state.

The relevance of this classification is validated by differences in the size and composition of the welfare state across countries. In a corporative system such as the French one, pensions and health represent the main share of welfare expenditures, but resources allocated to family and labour market expenditures are not marginal. A similar picture characterizes the Scandinavian countries, which show a substantial percentage of expenditure in labour market and family policies. Italy instead devotes the largest part of its welfare expenditure to pensions, followed by health, and very few resources are left to family-oriented interventions, or unemployment benefits and active labour market policies. In the US, although gross social expenditure is overall much lower, at least in the strictly public component, pensions and health are still the main programmes of welfare.

As the four models imply a different size of welfare and a different amount of resources devoted to family expenditure vis-à-vis other welfare expenditures (mainly pensions and health), they also suggest a different division of care responsibilities, in particular for children and the elderly, between the state and the family (see Saraceno and Keck, 2010; and Saraceno, 2011). They also suggest a different view of how important it is to promote female labour force participation and gender equality in the economy.

In the corporative and social-democratic systems the state has an active role in supporting gender equality, through incentives for female labour market participation and female careers. Work–life balance is a key target of the state, which is also the main provider responsible for childcare. The Nordic approach for instance provides generous public subsidies, which guarantee both high quality standards and almost universal access to services for children under three. In the familiar welfare state, instead, the family remains the main provider of childcare and women (mothers, grand-mothers) are the key actors in care provision. Therefore, the familistic model does not meet the needs of a household where women work. Finally, the liberal welfare state promotes private provisions in all dimensions of care responsibilities, including measures of work–life balance, support to female labour force participation, and childcare, which is provided by the market at costs which may become unaffordable.

This brief excursus suggests that, in general, the Scandinavian model is the one more in line with state interventions aimed at promoting gender equality.

Gender culture

These different models of state interventions are consistent with different ‘gender cultures’, that is different attitudes of agents, individuals, and firms, towards the role of women and men in the family, the economy, and society, and their positions in the labour market, which shapes the context in which socio-economic decisions are taken and may influence economic outcomes.

Data from the European Values Survey (2008) provide a measure of these cultural elements and suggest that gender culture largely differs across countries. In Italy, a high percentage of both men and women (71% and 63% respectively) agree with the statement, ‘A job is alright but what women really want is a home and children’. The corresponding percentages are much lower in Denmark (11% for women and 12% for men), Norway (31% for women and 37% for men) and Sweden (27% for women and 35% for men). Moreover, in Italy only 18% of both men and women agree with the statement, ‘In general fathers are as well suited to look after their children as mothers’. The corresponding percentages for women rise up to 49% in Denmark, to 54% in Sweden and to 91% in Norway against a lower, and more homogenous, 38–39% among males. Finally, only a small percentage of both men (14%) and women (23%) in Italy strongly agree with the statement, ‘A working mother can establish just as warm and secure a relationship with her children as a mother who does not work’, while the percentage increases respectively to 40% and 63% in Sweden, 54% and 64% in Denmark, and 86% and 95% in Norway. A similar pattern emerges with the statement, ‘A pre-school child is likely to suffer if his or her mother works’.

Norway and Italy

It is probably not too difficult to understand the adoption of gender quotas in Norway, a country which experiences a ‘women-friendly’ Scandinavian welfare state; an extended size of state intervention; a gender culture favourable to the equal role of men and women in the family, society, and the economy; and a general positive attitude to the promotion of women in business. The real puzzle there is why the presence of women in top positions in business was so low before the implementation of the law, given the overall context, and thus why a regulation was needed to promote gender-balanced representation in decision-making.

What about Italy? At the opposite spectrum of indicators of gender culture in relation to Norway, Italy is the leading country among familistic welfare states. The Italian state plays almost no role in the promotion of gender equality, re-conciliation policies between family and work are rare and difficult to develop, female labour force participation is the minimum in Europe and female careers are an exception; and yet Italy has introduced a law on gender quotas with revolutionary implications, borrowing directly from the Norwegian experience. The law on gender quotas is the first clear state intervention in Italy in the area of gender equality.

Other European countries have introduced gender quotas in the form of obligation (France, Belgium, Netherlands, Iceland), or recommendation (Spain), as we will explain in the book, but the Norwegian case is the one most similar to Italy in terms of features introduced with the law (namely, the sanctions and the targets).

This unusual connection between Norway and Italy on the topic of gender policies challenges the traditional Esping-Andersen classification mentioned before. As far as the introduction of gender quotas is concerned, what really matters seems to be the interaction between the state and the market. State regulations are successful when they are accepted by the market and the top tiers of business. Otherwise they fail, or they are never put in place. A combination of factors, even accidental to some extent, including the old tradition of the principle of gender equality in the constitutional law, the debate and experience of gender quotas in politics, the support of major companies and sectors in business, the role of the state as a large shareholder, created a broad acceptance of quotas, which made it possible in Italy to start and to realize a very similar process to that experienced in Norway. Differences between the two countries remain, but there are significant similarities in how the matter progressed. And, even though the Scandinavian model shows the strongest tendency towards state intervention in the economy, specific conditions meant that gender quotas were approved in Norway, but rejected in Sweden, where the ‘magic’ combination of factors did not arise (see Engelstad and Teigen, 2012).

Norway was not able to influence other Scandinavian countries in terms of adoption of similar instruments to promote gender equality, as one might have expected, but its experience was a stimulus and an inspiration for a country, such as Italy, which, according to the traditional classifications, shows a very different model of state intervention in the economy and, according to all gender statistics, a very different performance in terms of gender equality.

The experience of Norway and Italy corroborates the view that how the process works, and in particular the creation of a strong interaction between the state and the market, is a powerful ingredient for the implementation of gender quotas.

Beyond the ‘Italian way’

The Italian experience delivers important lessons – which our analysis will highlight – and has the potential to spread its influence worldwide. These lessons represent the key ingredients which, according to us, contribute to the success of the Italian law, and will be useful for other countries which aim at increasing the presence of women in boards and which are discussing the introduction of a temporary gender quota system. These key elements range from the interaction between the public and private spheres; the promotion of meritocracy consistent with the emergence of female talents; the nature of the legislative solution adopted and its effective implementation; the emergence of board-ready women, their visibility and their quality; and the monitoring process. These elements have the potential of spreading the Italian model ‘beyond’ the country.

Although being a successful result, we consider the Italian law not only a conclusion of a complex process, but also a starting point. The law represents a first step in the direction of reaching a gender-balanced process of decision-making. The law is mainly meant as a way to break the current dis-equilibrium and rebalance the gender representation in boards to achieve equality. This is intrinsic in its temporary nature. However, we expect the effects of the law to be long lasting, that is to say, to go ‘beyond’ the period of implementation of the law. This perspective applies not only to the law’s direct effects, that is the larger number of women in boards, but also to its indirect effects, such as the improvement of the quality of boards, and the increase of the presence of women in management positions. Breaking the glass ceiling via the gender quotas law may also generate spillover effects from top positions to the bottom of the job pyramid. These indirect effects will contribute by going ‘beyond’ the gender quota law and they will create a fertile terrain on which to take future steps towards achieving gender equality. These st...

Table of contents

• Cover
• Title
• 1  Introduction
• 2  The International Scenario on Gender Gaps
• 3  Quotas on Boards: Evidence from the Literature
• 4  Gender Quotas on Boards across Countries
• 5  Law 120 of 2011
• 6  Key Actions and Actors leading to the Law Implementation
• 7  First Evidence
• 8  A Comparative Evaluation of the Italian Experience
• 9  Key Learnings from Italy to Other Countries
• 10  What Is Next?
• Appendix
• Index