In 2012, women made up 13.7% of board
positions in large listed companies in the E.U., and 15% for nonexecutive board
positions, according to The Wall Street
Journal. In the U.S., according to Kay Koplovitz of USA Network, the number
of women on corporate boards had been stalled at more or less 15 percent for
over ten years. Whereas in the U.S., people would look at Congress to enact a
uniform inter-state standard or else leave the matter to individual
corporations, the E.U. has other alternative means, such as the directive. That
device relies on the state governments to decide on the penalties as well as
enforcement against violators of the E.U. law. Even though the Commission could
take a state refusing to implement a directive to the European Court of
Justice, the “cost” of the flexibility in the state-based implementation is a
possible dilution in the law’s aims being achieved throughout the E.U. rather
than just in a few states. Put another way, even as the ideological diversity
within the empire-scale union is accommodated, advocates of more female
representation on corporate boards may be disappointed as some states give
non-complying companies only a slap on the wrist.
Initially, Viviane Redig, the E.U.
Justice Commissioner, proposed federal fines for companies in the E.U. that
fail to have female board membership of at least 40% by 2020. Facing opposition
from Britain, the Netherlands, Malta, the Czech Republic, Latvia, and Bulgaria
over legally binding provisions to be enforced by the Commission, she “revised
and resubmitted” her propose now in the form of a directive whereby sanctions
would be determined by the individual states. “In the new proposal,” according
to the New York Times, “sanctions
would apply only in cases where companies that fell short of the 40 percent
threshold failed to establish adequate selection procedures.” Additionally, the
states decide what are to be the sanctions. Hence, even though the states are
required (i.e., directed) to implement the E.U. law under the commissioner’s
amended proposal, the discretion, which is considerable, could be expected to
result in substantive differences in enforcement throughout the union. In other
words, the E.U. Commission would have a difficult case arguing before the ECJ
that a state had refused to implement the directive. The court would have to
wade in on what counts as minimally adequate selection procedures and
sanctions. The device itself—the directive—is explicitly oriented to
accommodating differences that exist between the states, so
judicially-established “minimum standards” applicable to every state
implementing a directive would doubtless be far lower than the advocates of the
particular policy would prefer.
Meanwhile, in the US at least four
states had recently decided not to expand health-insurance subsidies to the
uninsured poor under the expanded Medicaid program that had been passed by
Congress as part of “Obamacare.” In its ruling on the federal law, the federal
Supreme Court decided that requiring the states to expand their participation
in the program constituted an encroachment by the U.S. on the state
governments. Someone looking at this
“opting out” by states including Florida, South Carolina, Alabama, Iowa, and
Louisiana might conclude that the directive on women on boards in the E.U. would
similarly enable “red states,” including Britain and the Czech Republic, to
opt-out too. The respective costs are that uninsured poor in states like South
Carolina continue to be uninsured (and thus without access to clinics) and
women in states like Britain continue to be discriminated against at the board
level. In short, accommodating real differences between states in empire-scale
unions has a cost in terms of specific policy objectives, and one might even
say equality itself.
At the time of the debate on a mandated
quota by the college of commissioners, considerable diversity at the state
level existed in the E.U. with respect to public policy on quotas. In the state
of France, women made up 22.3% of board-membership at blue-chip companies at
the time—the state having already introduced quotas with an aim of 40% by 2017.
The Netherlands too had enacted mandatory quotas, but without major penalties.
Spain and Italy had enacted only voluntary quotas, and as one might expect, the
British House of Lords had criticized the very notion of mandatory quotas. This
diversity is innate, and thus entirely reasonable in a union as large as the E.U.
We could expect the same sort of spectrum from state to state in the U.S.
Inhibiting interstate diversity has a
cost, as a one-size-fits-all federal rule does not accommodate the differences
and thus builds political pressure within the federal system. Yet obviating
this cost by the E.U. directive (and the expanded-Medicaid opt-outs from
“Obamacare” in the U.S.) is bound to result in another sort of cost. In
particular, the goal of 40% female representation union-wide will almost certainly
by stymied by the states refusing to implement the directive by enacting an
involuntary mandate with teeth. Either way, there is a cost. Giving each its
due is difficult because the costs are qualitatively different and thus are
difficult to compare and weigh with each other.
In the U.S. during the twentieth
century, the overwhelming trend was to avoid the cost in terms of reaching
goals union-wide on particular issues. This came at the expense of recognizing
the legitimate differences between the states. Considerable pressure of pent-up
or frustrated diversity had doubtless accumulated in the process, though an
eruption could presumably be decades or even centuries off. The accent in
American politics had been on achieving particular policy aims, union-wide,
rather than on maintaining a balance in the federal system between the union
and the states. It is an open question, at least as of 2012, whether the E.U.
too would follow such a trajectory as it matures past its development stage.
That E.U. states had been extant far
longer before creating a union may delay any such “inevitable” consolidation.
More significant, however, may be the more direct involvement of heads of the
state governments in the European Council (rather than having delegates, or
senators) along with the established device of the directive as an alternative
to union-wide rules. That is to say, rather than relying on the states’ rights
ideology at the state level in the current generation (something that was also
the case in the U.S. during its first hundred years), the federal design might turn out to be more decisive, though perhaps
ultimately insufficient if a future generation wants or insists on union-wide
achievement of particular policy-aims.
Ideally, particular policy-aims should
be balanced against the need in any empire-scale federal system to allow its
states some breathing room owing to the inherent differences between them. The
viability of this principle does not depend on what the people prefer, as long
as there are differences between the states culturally and ideologically and
public-policy aims whose validity can claim to be universal in nature. As
modern American history illustrates, it can be all too tempting to succumb to
the normative point that women should not be discriminated against and thus
suspend one’s concern for the viability of diversity within the federal system.
Yet the hegemony of particular ideological or normative goals can unintentionally
compromise the achievement of a more perfect union.
Sources:
Frances Robinson, “EU
Directive to Balance Women in Boardroom,” The Wall Street Journal, November 13,
2012.
James Kanter, “Renewed Push in Europe To
Seat Women on Boards,” The New York Times,
November 14, 2012.
Kay Koplovitz, “Women on
Corporate Boards in U.S. Lagging the Global Trends,”
The Huffington Post, September 19, 2012.
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