Turkey: Representation of Women on Boards

Last Updated: 19 December 2014
Article by Serap Zuvin and Aybala Kurtuldu

Glass Ceiling

If an answer is to be given to a simple question on whether or not there is an acceptable percentage of representation of both genders in the work life, it would be a "No". Although it differs by the countries and people, we can conclude that legislations, organizations, global aid efforts are not sufficient enough to break the glass ceiling. As a reflection of this fact although the women play a vital role in employment, this gender is not being represented equally at the top positions and the board level.

Excursion into History

In the former Turkic States, women held rights almost in every field such as having the equal rights with men in social life, right of governance etc. During the Ottoman Empire times, certain rights of women were revoked due to religious governance. By Turkey's becoming a republic, during the years of 1926-1934, as part of the legislation reforms many rights in different fields such as education, law, social life, politics have been granted to women. One of them was, Turkish women, being entitled to elect and be elected in the parliamentary elections on December 5, 1930.

A strategy built on the representation of women on boards

Superiority of men in top positions of the companies and public institutions is an ongoing global problem. National and supranational authorities take actions to progress towards a better balance of women and men on boards. One of the primary topics of the Women's Charter1 ("Charter") of the European Commission is the representation of women on boards. Particularly, the European Commission proposed2 for a directive that aimed attaining a 40% objective of the under-represented gender in non-executive board-member positions in publicly listed companies by 2020. The small and medium size enterprises are excepted from this. However, no sanctions exist against companies applying the procedural obligations but not reaching the 40% objective.

The findings of the reports3 of the business sectors of various countries' such as (i)"Women Matter" study by Mc Kinsey (2007 to 2012), (ii) "Women on Boards", Lord Davies of Abersoch Report, (iii) UK, (2011) shared during the Session on Advancing Gender Equality in Economic Decision-Making4 of the Conference 'Equality between Women and Men' held on 19-20 September 2011 in Brussels, "more women involved companies" make more profit as compared to the others who do not involve women. According to these reports diversity in gender enriches the financial performance of the companies and improves the quality of decision-making, corporate governance and ethical behavior. The percentage of consumer purchasing decisions made by women is around 80%.

There are some policies and strategies that European Union applies to increase gender equality in the Boardrooms and break the glass ceiling which bars female talent from the superior positions. These policies include practices in companies, cross company and sector initiatives, industry self-regulation, and government legislative and other policy initiatives.

Good practices in companies

i. Practices in Companies

Good practices in companies support companies to conduct their business in a more proper atmosphere and aims to avoid the underrepresentation of women in senior management positions within the companies. Good practices include flexibility in career paths, allowing the parents to work part time, without being under the threat of being fired. With the technological development policies, home-office employment system is supported by the companies. For instance, Deutsche Telekom in Germany is the first large company to apply a voluntary based women quota. Following the implementation of good practice policies in companies, the percentage of women on boards and higher positions have considerably increased in companies.

ii. Cross company and sector initiatives

The European Union governments support and awards the companies applying a policy to keep and seek out for a higher number of women in their companies. This policy is called "cross company and sector initiatives". As a result of this, more than 180 Dutch companies and public institutions have signed an initiative by the Charter "Talent to the Top"5 aiming to increase the number of women on boards and in this context, the companies and institutions set a target on this matter and annually publish progress reports. In this Project, feedback is given by the "Talent to the Top Monitoring Committee".

iii. Self-regulation

There is a self-regulation system within the scope of the good practices: The companies prepare a code of conduct on the gender equality basis and if anyone fails to comply with the provisions of the code on the equality, then the failing companies undertake to state such non-compliance in their annual reports and announce it to the public and to their shareholders.

iv. Government legislative and other policy initiatives

Finally, Good Practices is supported by the governments by either obliging the companies to implement quotas or asks them to implement the quotas on voluntary basis. Norway made the lead among the European countries by adopting the "Norwegian Gender Equality Act" ("Act") in 1981. The Act requires that 40% of both genders must be represented on publicly appointed boards, councils and committees. The requirements of the Act were expanded in the years and the reports show that participation of women in higher levels of business had substantially increased by the enforcement of such Act. Many other European countries such as France, Netherlands, Italy etc. applied the obligatory quota implementation system as well. The most significant approach regarding the voluntary quota implementation was introduced by the UK as the "UK Equality Strategy"6 in 2010. This is a new approach of a government working together with business people to develop business-led initiatives for the promotion of women on boards. The strategy aims to achieve 25% women board members in the first 100 publicly held corporations by 2015 in UK. Other EU member states such as Finland and Sweden also implemented the voluntary approach for the promotion of gender balance on boards. In those countries, the media provided a strong flow of information promoting the news covering the gender equality. Finally in December 2014, a draft bill mandating a 30% quota for the participation of women in the boardrooms of the legal entities in Germany has been approved by the German Cabinet7.

Promising developments

Turkey's current situation on the matter of the balance between man and women on boards is not in its best position, but it has been progressing rapidly. According to the Women in European Politics –Time for Action Report8 prepared and published by the European Commission in 2009, the percentage of women working in the publicly held companies in the EU states is 3%, whereas it is 6% in Turkey. World Economic Forum carried out a similar work and according to the Corporate Gender Gap Report 20109 in the World Economic Forum, the percentage of women CEOs in three counties, which are Finland, Norway and Turkey, is more than 12%, whereas it is less than 5% in OECD and BRIC countries. Also, Turkish Industrialists' and Businessmen's Association started a survey named "Women in Business" in 2010 which was finalized in 2011 and according to the results of such survey; 10.3% among the board members of the companies participated in the survey are women.

Pursuant to the "Communiqué on the Amendment of the Communiqué on the Determination and Application of the Corporate Administration Principles10("Communiqué") published in the Official Gazette dated February 12, 2012 and numbered 28201 prepared by the Capital Markets Board, there must be at least one woman member on the boards of publicly traded joint stock companies. The foregoing regulation is not of mandatory nature but, the companies not complying with the requirement must explain to the Capital Markets Board of Turkey the reason behind their non-compliance with this requirement under the terms of the Communiqué, which is the rule of "comply or explain". The system the Communiqué brings falls under the category of the voluntary system supported by the governments, which has also been exercised by certain EU states.

Roadmap to be followed

Turkey seems to follow the same path with almost every European country aiming to break the glass ceiling on boards of the companies and the institutions. The status of women being on top positions is a contemporary issue and is being discussed at the level of parliaments of the countries or by supranational unions. Turkey started to take certain remarkable initiatives by building up a legislative arrangement and is expected to have many more regulations in favor of women in the near future.

Footnotes

1.http://ec.europa.eu/archives/commission_2010-2014/president/news/documents/pdf/20100305_1_en.pdf

2.European Commission proposal for a directive- adopted by the Commission on 14 November 2012

3.'Women Matter' by McKinsey (2007,2008,2010); 'The Bottom Line: Connecting Corporate

Performance and Gender Diversity', by Catalyst, 2007; 'Women to the Top!', 2007, by EVA

4.Advancing gender equality in economic decision-making Session of the Conference 'Equality between Women and Men' in 19-20 September 2011, Brussels

5.Number of signatories available at: http://www.talentnaardetop.nl/Home_NL/Charter/Ondertekenaars/

6.http://www.homeoffice.gov.uk/equalities/

7.http://www.dw.de/german-cabinet-approves-female-boardroom-quota-legislation/a-18122945

8.Women in European Politics - Time for Action, European Commission, 2009

9.The Corporate Gender Gap Report 2010

10.Communique on the Amendment of the Communique on the Determination and Application of the Corporate Administration Principles published in the Official Gazette dated February 11, 2012 and numbered 28201

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Authors
Serap Zuvin
Aybala Kurtuldu
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