Closing the gender gap: Spain's plan for more women in corporate leadership

The Spanish government approved of gender parity law that makes it mandatory for corporate boards to be composed of at least 40 percent women on Tuesday.

In a statement released by the government, it stated that the rule will aim to ensure that boards contain at least 40 percent "of the least represented gender" and that they provide similar levels of equity to the top management as well.

The law aims to support and increase female representation in decision-making domains by establishing quotas for women in politics, business, and other professional associations.

"This is useful policy that changes people's lives," the country's finance minister, Nadia Calviño, said on Tuesday adding that while it's clear that they've come a long way but there's still a lot to do.

What is the new draft?

The proposed rule mandates political parties to require an equal number of male and female candidates during elections, whether national or municipal. At present, women make up 43% of Spain's congress and 40% of its senate.

Parties that lead the central government will have to appoint a cabinet that consists of at least 40% representation of each gender. The Socialist-led government which has 23 cabinet ministers consists of 14 women, and all three deputy prime ministers are female.

Calviño stated that publicly listed companies will have until July 1, 2024, to make sure that the corporate boards include at least 40 percent of the "underrepresented sex." Meanwhile, companies with more than 250 workers and an annual turnover that exceeds €50 million will have until June 30, 2026, to ensure the same.

"If women represent half of society, then half of the political power and half of the economic power must belong to women," said the Socialist prime minister, Pedro Sánchez, as he announced the legislation.

"There will be people who find this irritating and even absolutely disproportionate. But we think it is justice, plain and simple," he added.

The draft law was welcomed by Fedepe, the Spanish federation that represents female executives, professionals, and entrepreneurs on Tuesday.

"But we're waiting to see the fine print and how this is applied," said Ana Bujaldón, the group's president.

"All too often we're seeing what we call 'equality washing' – actions that are more cosmetic than real. So let's see how this turns out," she added.

Spain has been making significant progress in representing women in workforces

According to the Spanish Securities and Exchange Commission, the percentage of women on the boards of listed companies reached 23.7 percent in 2019, up from 19.9 percent in 2018.

While female representation on boards of directors among the IBEX companies increased by 3.6 percent in 2019 to 27.5 percent, it still fell short of the CNMV's target of 30 percent for 2020 and 40 percent for 2022.

In 1994, Belgium became one of the first countries in the world to enact gender quotas at all electoral levels, requiring that no more than two-thirds of candidates be of either gender.

Earlier this year, Spain became the first country in Europe to offer state-funded menstrual leave.

The gender-gap in U.K. has widened four time more than other developed countries

Meanwhile, the gender pay gap in the United Kingdom has widened four times faster than in other developed countries since the pandemic, as women continue to face a hefty "motherhood penalty" at work. It widened by 2.4 percentage points to 14.4 percent in 2021, exceeding the 13.8 percent average for OECD countries such as the United States, Sweden, and Germany.

This has caused a set back to the country's long-term good record on pay parity. According to consultancy PwC, it could take upto 50 years to reach equality which produces an influential annual index on UK's gender pay gap. It further blamed the high childcare costs in Britain for pricing women out of job markets.