Abstract
Impact assessments are an important component of a better regulation programme—an initiative of the European Commission launched to improve the quality and transparency of the EU (European Union) law-making process. In the current article, I take a closer look at the Impact Assessment (IA) issued by the European Commission together with a Directive proposing a 40% obligatory female representation on the boards of directors in European public companies. In the IA, the Commission defined an improvement of corporate governance as one of the objectives to be achieved by the Directive. The Commission claimed that the more gender-diverse a corporate board is, the better it will perform. However, it is questionable whether mandatory quotas indeed have such a positive impact on corporate governance. Here I argue that, to properly assess the impact of a given policy, it is crucial to examine how the policy measure itself interferes with corporate performance. I present both field and laboratory studies investigating the influence of mandatory quotas on company performance, individual attitudes and group cooperation. Next, I discuss implications of these findings for the evaluation of the IA quality as well as the legality of the Directive. The current analysis of the IA shows that despite recent improvements there are still considerable flaws in conducting impact assessments of the EU legal initiatives.
Highlights
Impact assessment is a core element of a better regulation programme, that has been initiated by the European Union (EU) in 2001.1 A procedural framework for conducting impact assessments was established in 2002 by the European Commission.2 The procedure has evolved and several measures intended to improve the quality of impact assessments have been implemented since .3 Yet, the ultimate goal of impact assessment remained the same: it should provide evidence-based information in the law-making process
The findings presented above concentrated on the impact of positive action on how people perceive themselves as beneficiaries of that action, how others evaluate them and how they feel when selected based on positive action
In 2012, the European Commission issued a Proposal for a Directive requiring a 40% share of women on the boards of directors in all publicly listed European companies, to be achieved by 2020
Summary
Impact assessment is a core element of a better regulation programme, that has been initiated by the European Union (EU) in 2001.1 A procedural framework for conducting impact assessments was established in 2002 by the European Commission. The procedure has evolved and several measures intended to improve the quality of impact assessments have been implemented since . Yet, the ultimate goal of impact assessment remained the same: it should provide evidence-based information in the law-making process. The ultimate goal of impact assessment remained the same: it should provide evidence-based information in the law-making process It should assist with but not replace a political decision.. Disappointed by a slow growth of women participation in economic decisionmaking, the European Commission in 2012 proposed a Directive that would establish mandatory quotas for women on corporate boards.. I will challenge the assumptions of the European Commission presented in the Impact Assessment with respect to the positive influence of mandatory quotas on company performance and corporate governance. The Commission states that increased gender diversity in a boardroom improves corporate governance and company performance—the more gender-diverse a board is, the better its performance. I will refer to the literature discussing the challenges of regulatory assessments in the area of corporate governance, in which the difficulties in assessing potential consequences of intended reforms are pronounced due to complexity of the corporate environment and often contradictory empirical results
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