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 yesterday 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. Vallaud-Belkacem this week attended the ninth annual Women’s Forum in Deauville, France.
The rankings were based on criteria including the number of women on the executive committee, the makeup 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,” 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 Belkacem gets her way.
Last month, Belkacem, 36, who’s also the spokesman for the government of President Francois Hollande, introduced a wide-ranging draft law that would fine companies that fail to meet standards for equality between the sexes up to 1 percent 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 in France.
Female executives attending the Deauville Forum welcomed the rankings.
“Having objectives is very important,” said Mouna Sepehri, executive vice president in the office of the chief executive officer at Renault SA. The carmaker has set a target of 30 percent for recruiting women engineers, for instance, based on the fact that about 30 percent of engineering graduates are women. So far, the company is at 27 percent, 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 percent of board members by 2014, and 40 percent 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.” 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 U.S. with the highest proportion of women on boards of directors. A quarter of board members in France are women compared with 20 percent in the U.S., according to a January 2013 survey by the Corporate Women Directors International.
While the quotas and laws about equal pay were passed before Belkacem took office in May 2012, she has been applying them aggressively, said Veronique Morali, president of the Women’s Forum and founder of web site Terrafemina.
“When she was first named minister, she focused on violence and women’s rights, but has enlarged the role,” Morali said. “She’s put herself under the flag of the economy and companies.”
France isn’t the only country to impose quotas for female representation on boards, but it may be the first where the government has come up with a ranking.
In the U.K., 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 comprehensive ranking that also weighs women’s roles in management.
“I think we should look to do similar in the U.K.,” said Helena Morrissey, CEO of Newton Investment Management Ltd. and founder of the 30 Percent Club.
In the French rankings, even the top-ranked firms didn’t get perfect grades. Orange, which has 35 women among its top 100 managers and has an internal women’s mentoring network, got 67 points out of a possible total of 100.
That was still way more than the two firms that tied for last place, Vilmorin & Cie, a Paris-based producer of seeds for agriculture, and AB Science, a biotechnology company. Both got zero points.
“These rankings are a very powerful medium,” said Morali. “They give visibility to actions.”