Bank / Credit Union

EU to crack down on banks with male dominated boards

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March 7, 2023

The European Banking Authority of the European Union plans to crack down on banks that have not implemented a policy to include more women in boardrooms. The authority found 800 banks have only 18% of executive and 28% of non-executive director roles filled by women, according to a report by Reuters.

Women also earned less than male counterparts, 9.5% less than male directors and 6% less than male non-executive leaders. The EBA has required banks to have diversity policies since 2014, but 28% still do not have one in place. The banks are allowed to set their own goals, although some EU countries have their own goalposts set.

"We will take action here and look at what national supervisors are doing," Bernd Rummel, senior policy expert at the EBA, told the news outlet. "It's important that all banks adopt diversity policies and have their own targets. This needs to be 100%."

Larger banks in Northern and Eastern Europe have more women in leadership roles, which may be linked to better childcare options.

Of the banks analyzed by the EBA, banks with better gender diversity have a return on equity of 7.9% compared to 5.3% with banks with only male executive directors.

The EU also recently approved a law that will require companies to have 40% of non-executive board members be woman by mid-2026.