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Understanding the limits of free movement

Syed Kamall

As a Londoner, I am proud to represent one of the most diverse cities in the world. For centuries, the UK and London have opened our doors to people from all over the world seeking a better life and looking to contribute to life in Britain.

However, when voters express concerns, politicians cannot simply bury their head in the sand or dismiss their concerns. To do so only fuels the rise of extremist forces. The role of all politicians must be to listen to the people they represent, and at present they are telling me on the doorsteps of London that there is lack of confidence in EU freedom of movement. Politicians need to look at what needs to be done to regain that confidence.

The founding principles of Freedom of Movement are well intentioned; better opportunities to start businesses and trade across the European Union (EU), and greater opportunities to travel, live, learn and work. It is an appealing prospect to someone like me who believes in open trade and open markets. The spirit of exploration and of foreign investment is how Britain and many other EU countries became great.

And of course, I believe that the freedom to live, work and travel gives us all as nations the important opportunity to understand each other, to see each other’s differences and similarities, and gain a greater appreciation of different cultures.

Freedom of movement is also a reaction to the world in which we live: a globalised world where the movement of goods, people and capital is a reality. We cannot seek to seal ourselves from some parts of modern living yet enjoy a world of imported foods, iPads, furniture, cheaper holidays and travel and global companies.

The UK has always been a successful trading nation and has built relationships around the world to help its companies prosper, which is why we continue to support the strengthening of a genuine EU Internal Market. But in reality countries differ in their specialisation, and the skills they have to offer. Increasingly those skills shortages are filled with other nation’s populations.

Some would say those skills shortages can be filled by putting in place a visa scheme, and putting strict limits on those that can come and work and live in a country. However, in my experience of talking to international businesses, the challenge is to put in place a well-functioning and efficient visa system that is not costly, time consuming or overly bureaucratic,  but also is flexible enough to adapt to changing demands.  Companies from fast growing economies in Asia and the United States want an economy and a system that is simple to navigate.

Free movement allows businesses to recruit from a much wider pool of individuals. It allows companies to fill skills shortages, expand into new markets, increase their supply chains and have the flexibility needed during periods of growth and loss. In my country, our public services and services sectors would find it very difficult to cope without migrants.

 

In the UK, many migrants don’t just come to work; they come to start a business. According to a 2014 report by the Centre for Entrepreneurs, 14% of start-up businesses in the UK were founded by immigrant entrepreneurs. It said that there are 456,073 immigrant entrepreneurs working in the UK who have founded 464,527 businesses which employ 8.3 million people. Whether they are from countries inside or outside the EU, we must retain these job-creating entrepreneurs. However, in the UK we face the worrying prospect that those entrepreneurs studying in the UK will take those skills out of the country to set up businesses elsewhere. 42 percent of non-EU students have said that they intend to set up their own business after graduation, but only a third will do so in the UK.

So let’s be clear that many people who go to other countries either plug an important skills gap, or are entrepreneurs who generate growth, jobs and opportunities in their host country. And let us also be clear that EU migration works both ways. More than 14 million EU citizens are resident in another member state – 2.8% of the total EU population, nearly 2.5 million of those people are British.

However, as a politician I hear on many doorsteps concerns about the impact that freedom of movement is having. The main concerns are over the numbers of immigrants, the ensuing pressures on local health or education services, cultural cohesion as well as opposition to benefits tourism.

Freedom of movement was introduced in order to facilitate workers and the movement of goods and people. However, increasingly the people of European Union countries feel that through peripheral legislation from the EU, and a number of contentious judgements from the European Court of Justice, they simple are not a part of what they signed up for. They fear that an area of free movement has become an area of harmonised EU social security.

The rules should be simple and they should be clear, that if you go to a country you either need to be able to find employment or be able to financially support yourself. David Cameron, along with Angela Merkel and a number of other national leaders from other EU countries are looking at how they can bring in reforms to address these issues. Many of these reforms can be negotiated through the already existing framework, such as national reforms of social security systems, or reclaiming healthcare payments from an EU migrants’ home Member State. We can also tighten domestic law to ensure people who cannot support themselves and have not contributed to the social security system can be returned to their home state. In my own country, I believe that the simplest (but also most radical) way to tackle the concerns would be to move towards a contributory benefits system.

However, some Member States will always provide a pull factor. My own home city of London is an obvious example. It is not only the greatest city in the world, but one that people from all over the world want to visit, and make their life there. Much like New York, Berlin, Paris, or Barcelona, bustling cities will always draw people to them in search of new opportunities.

It is an undeniable truth that Europe’s colossal disparity in wages will continue to draw people to other countries. In 2012, company employees in Bulgaria received, on average, €3,598 (£2,809; $4,495) net annually. In Romania that figure is €4,004. For the UK the figure was €33,216, for Germany €26,925 and Denmark €32,396. They will equalise as growth, trade, infrastructure and wages pick up in countries that are still recovering from decades of Communism, but not for some time (especially in the current climate).

The ambitions of Member States is for the EU to expand its membership. In the UK, my Party has championed enlargement to Central and Eastern Europe. However, those countries joining the EU and subsequently the Schengen area should display the necessary economic, social and judicial infrastructure, and the ability to guard the external border. Countries should not be admitted without transitional controls whilst there is “work in progress”. I say this as much out of concern for the economies of the countries that join. I have spoken to politicians from ‘new’ EU countries such as Poland and Bulgaria who have complained to me that London and the UK is attracting some of their best and brightest people. It is frustrating that they only whisper these concerns and to me and to the British Prime Minister David Cameron while publicly expressing concerns over British attempts to reform freedom of movement, but they are genuinely concerned about the impact that ‘brain drain’ is having on the economic situation in their countries. We should be concerned about this both from the perspective of countries attracting new migrants as well as those losing their brightest and most talented people, when looking at future accession negotiations.

It has been my experience that people believe in fairness. They believe in systems that reward hard work and those who play by the rules. Somewhere along the way in much of northern Europe, something has gone wrong and people are losing support for freedom of movement. I firmly believe that, as politicians, our job is to respond to those concerns by tightening our domestic social security laws, by tackling those who abuse free movement, but most importantly, by showing that many people who move abroad do so with entrepreneurial intent.

I always tell people – as my father used to tell me – that you can achieve whatever you want to as long as you work hard and believe in yourself. If people want to come to my country, work hard, create a business, pay taxes, live by the rules, and employ other people, we should welcome that. The fact that so many people are concerned shows that the system needs reform and improvement, to restore people’s confidence in the functioning of freedom of movement within the EU.

Retrieved from The New European, issue 4

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A fabric of many golden threads

One of the most important effects of free movement is the exchange of opinions and experiences. But are we finally witnessing the creation of a common and lasting European identity? Or is it something limited to élites and, in the end, an utopia?

By Claudia Samaras
The right to travel, live, work, study or retire in any EU country is the first of the four fundamental freedoms of the European single market, as well as well as a fundamental component of the set of rights linked to the status of EU citizenship. The concept of free movement of people was first established with the signing of the Schengen Agreement in 1985 and the subsequent Schengen Convention in 1990, which initiated the abolition of border controls between participating countries. Being part of the EU legal and institutional framework, the Schengen cooperation has gradually been extended to include most EU Member States as well as some non-EU countries. At present, “the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States” is guaranteed by Title IV of the Treaty on the Functioning of the European Union (TFEU) and the Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004.

Undeniably, the right to travel and reside freely in any Member State represents an immense potential for European citizens. Remarkably, as confirmed by the Standard Eurobarometer 81, the possibility of visiting the Eiffel Tour in Paris or the Coliseum in Rome without bureaucratic burdens is highly valued by European citizens. According to the report, “the freedom to travel, study and work in Europe remains the main representation associated with the European Union”. It is, in other words, the most appreciated aspect of what the European Union is and represents; it is the one element that citizens would not want to see themselves deprived of.

Over the years, European citizens have learnt to appreciate that immense potential, as they have the opportunity to experience unhindered all different cultures, traditions and lifestyles of the European Union. These are numerous and extremely diverse from one another – the cultural and linguistic richness of Europe is namely astonishing. Let it suffice to mention that in Europe there are as much as 225 indigenous languages and countless traditional dances and culinary peculiarities. Being able to study and work abroad brings people and cultures closer and makes them more open to accept differences and diversity. Eventually, it promotes a perception of differences less as a threat but rather as an opportunity for development. Think of the over 3 million students who benefitted from EU Erasmus grants since the exchange programme’s launch in 1987. Think of a Spanish young man living for 6 months in Germany, thereby experiencing the German culture, traditions and language, but also experiencing the cultures, traditions and languages of the British, Italian, Portuguese, French, Bulgarian and Croatian students who decided to spend the same period of time in the same university as he did. This can lead to nothing else than a personal openness towards European cultures and thus to an always stronger European internal cohesion and acceptance of diversity.

According to a study conducted by Russell King and Enric Ruiz-Gelices in 2003, the participation to an international exchange programme gives students and graduates a more ‘European’ identity and a greater insight into European issues. Secondly, this experience increases the chances that graduates would pursue their subsequent career paths in continental Europe, continuing thereby the cultural exchange initiated by the programme. In other words, such an experience makes European citizens more European, thus more caring about the European Union and its mission.

Hence, the central question to be asked is “does the free movement of people contribute to the achievement of a strong European identity?”

In order to provide this question with an answer, one should first clarify the meaning of the very concept of identity, which over the years has been subject to great academic debate. One argument widely present in research trying to go in the depth of the concept of identity is that this notion is always linked to the dichotomy self-other. This argument goes far back in history and finds a prominent articulation in Hegel’s Phenomenology of Spirit:  “Each is for the other the middle term, through which each mediates itself; and each is for himself, and for the other, an immediate being on its own accord, which at the same time is such only through its mediation. They recognize themselves as mutually recognizing one another”.  In other words, the definition of a collective identity depends on the definition of an opposite, different identity.

Collective identities, as highlighted by British Sociologist Gerard Delanty in his paper “Is there a European Identity?”, also possess a narrative dimension. “They can be seen as the stories people tell about themselves in order to give continuity to their existence. Such narratives are the basis of memory and express the performative and public aspect of identity”. Some academics argue that, since Europeans share the same set of values, they also share a common European identity. However, European values are in many aspects very similar to, say, the American ones; this cannot therefore be the discriminating variable for the existence of a European identity.

Unknown to many, there is a Declaration on European Identity signed in 1973 by the Heads of State or Government of nine Member States with the intention “to introduce the concept of European identity into their common foreign relations”. Although a mere formal declaration is not enough to guarantee the de facto existence of such identity, it was a strong statement at the time to show the commitment of political actors to promote a strong European identity. This is therefore important for, as proven by the study of Michael Bruter “Winning Hearts and Minds for Europe”, the communication activity and the promotion of symbols associated with the EU on part of European and national institutions has a significant effect on European identity.

Interestingly, at the European council meeting in Laeken in 2001, the opposite vision of the EU as a threat to national identities was brought up. This diametrically different perception of the European reality either as a threat to the national ones or as an opportunity to be promoted should be kept in mind in any consideration of the topic. It is indeed very recurrent and inevitable when dealing with multiple feelings of belonging as it is the case of the concept of the European identity. As reported by the Standard Eurobarometer 77, published in July 2012 but still the most recent one on the topic, “a very large majority of Europeans are attached to their country (91%) and more than half of them are “very attached” to it (51%)”. Local attachments also appear to be strong: 88% of Europeans are attached to their city/town/village including 49% who are “very attached”. This highlights a very important aspect: feelings of belonging are not exclusive. If an individual feels very attached to his/her city, town or village, this does not prevent him or her from having an attachment to the country. The same applies to the attachment to the European Union, which shall over time be definitely added to the feelings of belonging that citizens already feel towards closer realities. Using the words of Edgar Morin, “the European identity, like any identity can be a component of a poly identity”.

Possibly, the quantifiable aspect that most reflects European identity is the one of “attachment to the EU” measured by the European Commission on occasion of the Standard Eurobarometer 77 mentioned above. According to it, there has been a strong deterioration in citizen’s attachment to the European Union from 2010 to 2012 – possibly due to the economic crisis that hit the European economy since 2008. The data collected show that 46% of respondents declare to be attached to the EU (-7 percentage points compared to 2010), whereas 52% declared not to feel any attachment to it. This data must be considered carefully and no superficial conclusion should be drawn from it. It is indeed evident that contingencies such as economic or political crises affect the punctual results of pools such as the one presented above. As a consequence, these should not be regarded as an indicator of a long-time period trend but rather as punctual indicator of citizen’s satisfaction with the European project. In other words, the cultural identification with the European Union could be a component of the answers, but not the only one. Other factors could influence the answers, such as the disappointment with specific policies or with the handling of extraordinary socio-political circumstances.

Finally, one last aspect should be considered: The fact that attachment to the EU is more widespread among citizens who show a high political interest index (56%, compared with 37% of those citizens with no interest in politics) indicates that, should political participation increase, with good probability so would citizens’ attachment to the EU. Also, since political interest usually leads to more political information and knowledge, one of the reasons for such a lack of attachment to the EU and, thus, European identity, could be the stereotypes and the commonplaces about the EU. These could and should be fought on the side of European, national and local institutions and media through both schooling and educational campaigns, accompanying European citizens towards a greater and deeper knowledge of the European reality.

So, “does free movement of people contribute to the achievement of a strong European identity?”. Yes. It contributes to an always stronger European identity. However, it is far from determining it alone. There is a need for top-down educational campaigns and a strong effort on side of the institutions to promote a positive perception of the European Union. Of course, since every communication requires two interlocutors, citizens must be proactive and responsive to such institutional endeavour.

The identitarian mosaic of European society is the invaluable result of centuries of history and should therefore be safeguarded and cherished. Nonetheless, European identity should equally be promoted and enforced, for by no means it represents a threat to such a great heritage. Countless golden threads are better off if pulled together in a strong and refined fabric then confusedly left in a twisted knot.

Retrieved from The New European, issue 4

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Freedom of movement: remedy or disease?

Dr Adem Kumcu, President of UNITEE.

According to some experts on EU affairs, the defining political issue of coming years will be free movement of labour. We can already see it unfold: the daily political debate is increasingly polarised between those who advocate for limiting freedom of movement and those instead calling for its expansion. A vivid representation of this debate is to be found in the constant exchanges between British Prime Minister Cameron, the main supporter of the need to scale down the right to free movement, and German Chancellor Angela Merkel, with her reminder that freedom of movement is one of the fundamental values at the core of the EU, and thus untouchable.

It is exactly its position at the core of the European Union that makes the debate on free movement so relevant:  as the one of the ‘four freedoms’, as they are called, more connected to the concept of EU citizenship, its evolution will have long-term effects for all of us. For this reason, it is important to understand the two sides’ motives, without dismissing one or the other. It is worth to understand both those who think free movement is a ‘disease’ and those who think it is a ‘remedy’, if we may say so.

Let us start with the negative aspects of free movement. They are commonly represented by media and political leaders with alarmed tones which more often than not fall into the scope of populism and easy electoral gain. But this does not mean that they are not existent: on the contrary, they manifest realistic concerns on the health of free movement principle. And indeed, in recent years some worries about freedom of movement have emerged, stronger after the 2007 accession of Romania and Bulgaria: among all the possibility that it might endanger social cohesion and bring about delinquency and the risk of drain on national finances, present in the debate with the term ‘benefits tourism’. The perceived risk, in other words, is that a policy of open borders will foster movement of individuals from less favoured areas to the most advanced ones, thus bringing about unsustainable pressure on local health and education, on the one hand, and an increased wage competition, on the other. An issue which does not have to be underestimated is also the potential cultural clash deriving from the new diversity of our pluri-national societies.

All these aspects have contributed in creating a sense of impending danger, which has quickly grown to encircle the concept itself of European Union, as it has been well expressed at the last European elections with the exploit of so-called ‘Eurosceptic’ parties. The solutions advocated by them seems easy: the return to a policy of closed borders. The ideal set-up of these groups is the one of ‘fortress Europe’, reinforced: not only strong controls on the external borders of the EU, but also limitations at its very heart.

As appealing as this solution might look, I cannot help from seeing it as defeatist and backward-looking. It is risk-averse, but as such it ends up throwing away the baby with the bath-water. Indeed, with all its risks – which must certainly be correctly managed – freedom of movement also offers opportunities to Europe. In our global times, we cannot afford to close ourselves off to the world: to be successfully competitive we have to manage complexity, not to erase it.

And indeed, free movement of labour has shown so far to be an important tool to decisively answer to some of the most pressing needs of the modern economy. First, it contributes to fill the needed jobs with the right people, notwithstanding their location. A Polish firefighter unable to find a job in his hometown can find one in London: in this way, Poland will have one less person unemployed and the UK will have one more fireman. Far from being a drain on public resources, it is easy to see how such a movement can help national finances, by allowing a more efficient allocation of resources.

Secondly, in an era in which job creation is seen as a utopia, free movement of labour also contribute to innovation and entrepreneurship. Not only migrants have been proven to be more prone to creating business and become entrepreneurs, but also they can foster the flux of capitals and ideas from one place to the other, thus favouring innovation. EU migrants, thanks to their multiple belonging and their ability to bridge countries and cultures, can also make easier for companies to internationalise, a factor key in determining success.

There is a third area, finally, in which free movement has value-added for the EU, and it is as a tool for external projection. Free movement is the characterising feat of the European Union, and as such is perceived by many other regional blocs around the world willing, in some measures, to follow Europe’s path, from MERCOSUR to ASEAN. We might say that free movement is the key constituent of the EU’s brand in the world, allowing it to position itself.

There is also a more practical way for the EU to make good use of free movement of individuals, and it is as an instrument of strategic partnership with neighbouring countries: allowing individuals from countries such as Tunisia, Morocco or Ukraine to travel more freely inside the EU could be a terrific way to strengthen relationships with those countries and contribute to their development. Engaging civil society first will make it possible for broader political change to happen. An example of this process is currently taking place in Turkey with the visa dialogue, started in 2013. I follow the process with interest and I believe that, in case of a positive conclusion, it will put Turkey and the EU closer than they have ever been, with consequences ranging from political stability to security and energy supply.

As all principles, it is clear that free movement has its own limits and problems, and the voices highlighting them should be listened to. But it is also true that altogether renouncing to it would be a blind choice: not only because of its prominence in making the European Union work as it does, but especially for the opportunities to competitiveness and progress it offers, both domestically and internationally. If Europe wants to be a successful actor in the global era, it cannot afford to look backward. It needs to understand its successes, see what is not working well and try to solve it. Freedom of movement can definitely be a remedy for the EU’s current problems. But all remedies have risks. It is focusing only on them, without looking at the positive sides, that transforms them in a disease.

Retrieved from The New European, issue 4

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The Freedom of Movement – A core principle of European citizenship

Jo Leinen MEP, President of the European Movement International (EMI)

Following the discussions in some Member States of the European Union to limit the freedom of movement, the European Movement International (EMI) called for the safeguarding of this fundamental right for all European citizens in a resolution adopted at its Members Council on 11 April 2014 in Athens, Greece.  One year later and the freedom of movement is once again being questioned, most notably in response to the Charlie Hebdo attacks and the Copenhagen shootings. This worrying tendency painfully affects the very core of European citizenship.

The right to work and move freely within the Union is a fundamental right of all European citizens, going hand in hand with the free movement of goods, services and capital. Together with the European fundamental values, these four freedoms constitute the foundations of European law and must be fully respected by all Member States of the European Union and the European Economic Area (EEA).

Studies show that the free movement of persons within Europe stimulates economic growth. In contradistinction to popular beliefs, the misuse of social benefit schemes is negligible, and the benefits of immigrants to national budgets are much higher than the costs. The possibility for European citizens to seek work in other Member States without lengthy bureaucratic procedures allows businesses to react flexibly to gaps in the labour market, making use of migrants’ capacities, which leads to more job creation. Furthermore, the cross-cultural interactions immigrants bring lead to enhanced innovation. Countries that make use of these qualities of labour migrants also compete best internationally. This means that both the economy and native workers profit from growth generated by labour migrants.

Safeguards to prevent the exploitation of national social security systems are already in place at the European level, and research shows that the vast majority of migrants from Member States of the European Union and the European Economic Area move to other EU countries to work, contributing on average 34% more to the fiscal system than they take out. Labour mobility within the single market is not only key for the economic recovery and success of Europe, but also one of the most appreciated benefits of the European Union directly affecting its citizens and businesses.

Increased labour mobility means higher employment

Thanks to these positive effects of the free movement of persons, increasing intra-EU mobility is part of the solution for tackling the high unemployment rate in Europe. Increased labour mobility can mitigate imbalances between the Member States’ labour markets caused by the economic crisis as well as the ageing and shrinking workforce in some parts of Europe. While some regions in Europe suffer from extreme unemployment rates, economic progress in other regions is slowed down by a worrying shortage of skilled labour. For example, many companies in Germany, which has a historically low birth-rate, can only grow because they find skilled employees in other Member States, while many well-educated people in the Member States hit most severely by the crises are offered opportunities abroad.

Despite this, common misconceptions and anti-mobility rhetoric prevail, even amongst some political leaders. The populist rhetoric has a strong impact on the public perception of the internal mobility of European citizens, which is often perceived as a factor endangering the economic situation in the respective Member States as well the social security of their citizens. It is a case in point that the most mobile European citizens from the central and eastern European Member States are often the target of populist and xenophobic campaigns conducted by far-right parties, such as the Dutch Freedom Party (PVV) and the British UK Independence Party (UKIP). Sadly, even mainstream governmental rhetoric increasingly infringes this founding principle of the European Union, as witnessed lately in the UK with Prime Minister David Cameron’s stance towards immigration and movement of EU citizens. This attitude is even less comprehensible when one considers the UK’s role as a strong advocate of the single market. After all, the single market can only exist if not only goods, services and capital can move freely, but also people.

At the same time, many people, especially those from the newer Member States, feel threatened by the anti-migrant sentiments, which discourage their ability to move Europe-wide. Even though they share the full beneficiaries of rights as European citizens, societal challenges may constitute a serious obstacle to a full democratic integration into a host community. A strongly negative political climate these days does not allow for the full exercise of rights deriving from European citizenship.

A fact based and responsible debate

Clearly some municipalities are more affected by the challenges of free movement, and may struggle to cope with a fast influx of a large number of European citizens. This, however, is no reason to dispute the principle of the free movement as such. Instead, it should be an incentive to support the individually affected municipalities in order to enable them to mitigate possible adverse effects and make full use of the potential provided by the newcomers. Furthermore, the best way to avoid poverty migration within the European Union is to reduce poverty and social exclusion in sending countries, instead of closing the borders of receiving states.

With extremist views arising in the very heart of Europe, all political actors and institutions in the European Union and its Member States must return to a fact based and responsible debate and abstain from exploiting the issue of free movement of persons for populist campaigns, which sows xenophobic and Eurosceptic sentiments.

Retrieved from The New European, issue 4

 

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The positive impact of EU migrants

ECAS interview

  • “Benefit tourism” is highly topical in the EU today with the UK talking of quotas on immigrants and Germany planning to establish a six-month maximum stay for migrant jobseekers. But what exactly is “benefit tourism”?

“Benefits tourism” is a term to describe a situation where a migrant moves to a country with the sole intention of claiming social assistance there. 

It is not the same thing as “benefits fraud” which involves the making of fraudulent claims for social assistance.

  • Has this concept intensified or decreased in Europe, ten years later, after the largest enlargement of the EU in 2004?

The debate about benefits tourism is not a new phenomenon and has been a topic of controversy in the UK since at least 1994. 

The debate has intensified since the Big Bang Accession in 2004 and has spread beyond the UK to include Austria, Germany and the Netherlands.

Denmark is the latest country where the controversy has arisen, although the Confederation of Danish Employers has published its own study showing EU migrants are net contributors to the Danish economy.

  • According to your 2014 study, migrants from EU countries have made positive contributions to the UK, Germany, Austria and the Netherlands. What kind of contributions?

Our study looked at the fiscal impact of EU migrants in these four EU countries.  We found that EU migrants are net contributors to the public finances in Austria, Germany, the Netherlands and the UK.

This means that, on the whole, EU migrants contribute more to public finances by way of income taxes and VAT than they take out through welfare benefits and other social assistance.

We estimate that EU migrants contributed €19 bn. to public finances in Germany in 2013 and up to €25.3 bn. if we factor in consumption taxes such as VAT.

In the UK, our study shows that EU migrants contributed €2.1 bn. to the Treasury in 2013 and reaches € 7.7 bn. When taking into account VAT and other indirect taxes. 

For Austria, our estimates show that EU migrants contributed €1.7 bn. to the public purse in 2013 or €2.6 bn. if we factor in public revenue generated from consumption.                                                                                        

As for the Netherlands, the net fiscal contribution of EU migrants was €0.5 bn. and trebles to €1.5 bn. after taking into account taxes raised from consumption.      

Our estimates are based on publicly available data and information obtained through freedom of information requests.

These four countries were selected because the governments of these countries wrote a letter to the Presidency of the Council of the EU in 2013 calling for further restrictions on free movement to be imposed and citing benefits tourism as the reason for doing so.

  • What challenges did you face in defining the migrant population?

The collection of the data from the targeted countries – the UK, Germany, Austria and the Netherlands – took more time than initially anticipated due to the lack of uniform and publicly available data on migrants’ contributions and spending by nationality. This necessitated the checking of different sources and the collection of certain statistics through access to information requests to the relevant institutions in the four countries.

This is why one of the Recommendations (“Strategies”) in our Right to Move campaign is that the Member states collate better statistics on the free movement of persons.

The collection of data on the free movement of EU citizens and their family members would encourage better evidence-based policy-making by the Member States as well as the EU.

  • Is the study’s conclusion also the case with migrants from non-EU countries?

No. Our study focused solely on the fiscal impact of EU migrants and their family members.

There have been some studies looking at the impact of both EU and non-EU migrants in specific countries, such as the study undertaken by University College London in 2013.

  • You have also mentioned in the study that despite migrants being more active in the labour market and have a lower unemployment rate compared to the native population, they receive significantly less benefits and wages. So what is behind political talks, media news and researches claiming that many migrants are leeching on social welfare systems of EU states?

It is true that in general migrants are less likely to claim, and therefore receive, benefits that they are entitled to.

For government and mainstream politicians, it is likely that allegations of “benefits tourism” provide a convenient explanation for the imposition of budgetary cuts and the reduction in welfare support by the state following the economic crisis.  

For more reactionary or xenophobic parties, “benefits tourism” is used as an illustration of the negative effect that migrants have on society.

  • Why are such claims getting increasingly popular among politicians and citizens than they ought to be?

Benefits tourism provides a narrative that makes the cuts more palatable to the public. It is a time-honoured stratagem to blame migrants as a means to deflect attention away from the genuine reasons for a country’s woes, such as the mismanagement of public finances.

  • The 2013 European Commission study on the impact of intra-EU migrants on social security systems said that there is little evidence of “benefit tourism” in Europe, contrast to what some politicians and experts have claimed. Is “benefit tourism” a reality or a myth in the EU?

Individual cases of benefits tourism may exist, but they are very limited. As the recent judgment of the EU Court of Justice in the Dano case shows, such cases are often short-lived episodes because the national authorities take relatively swift action to terminate the payment of benefits. 

The scale of the problem is heavily contested.  None of the European governments which have raised the issue have been able to provide empirical evidence that quantifies the scale of the problem.

What is clear is that several independent studies have shown that, on the whole, EU migrants contribute more to the public finances than they take out.

  • Last November, the European Court of Justice has ruled that national governments have the power to exclude migrants who are non-job seekers from receiving unemployment benefits. Given this court decision, does the EU still adhere the fundamental freedom of movement of the Union?

The Dano case does not call into question the free movement of persons as enshrined by the EU Treaties. The case has only confirmed that under the free movement rules, EU citizen who do not work and are not looking for work will not be able to claim benefits unless they can first demonstrate that they have sufficient resources of their own. The European Court of Justice simply reaffirms the EU rules already in existence.

  • Ironically, the supposed “benefit tourism” crackdown last November has been supported by several EU countries (UK & Germany) who have greatly benefitted from their large migrant population. What is behind this growing fear of migrants?

As we mentioned before, blaming migrants is not a new phenomenon.  The issue is being exploited for several different political purposes. What is new is the extent to which those concerns have been brought up at European level without being substantiated by numbers and figures. Moreover, those concerns have been voiced by the  Interior Ministries of the UK, the Netherlands, Germany and Austria, which usually are not responsible for either European migration matters nor social benefits claims. This is a worrying nationalistic trend, which goes against the rights and values that the EU has created.

  • What is the role of civil society organisations like ECAS in changing public opinion on migrants and “benefit tourism”?

Free movement is the achievement of the EU that is the most cherished by the majority of European citizens.  ECAS provides legal advice to more than 20 000 EU citizens who exercise their right of free movement in the EU annually and has an in-depth expertise in this area.

Through its work in the field of EU citizens’ rights for more than 24 years, ECAS has developed knowledge that enables the organisation to voice legitimate concerns and to put forward informed suggestions for possible solutions  to  policy-makers when free movement rights are under threat. We believe that every discussion should be based on facts and evidence rather than playing on people’s fears. Therefore we encourage evidence-based decision-making by the EU and national institutions alike.

 retrieved from The New European, issue 4.

 

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European Year of Citizens 2013

The European Commission has designated 2013 as the European Year of Citizens, which is dedicated to the rights that come with EU citizenship. Over this year, the EC will encourage dialogue between all levels of government, civil society and business at events and conferences around Europe to discuss those EU rights and build a vision of how the EU should be in 2020. In fact, the year will focus both on what has already been achieved for citizens and on meeting citizens’ expectations for the future. The Year will provide an opportunity for people throughout Europe to:

• learn about the rights and opportunities open to them through EU citizenship – particularly their right to live and work anywhere in the EU

• take part in debates about the obstacles to using these rights and generate specific proposals for addressing them

• participate in civic fora on EU policies and issues

• prepare to vote in the 2014 European elections and engage in the EU’s democratic life

To prepare the ground for the European Year, the Commission held a broad public consultation in 2012 asking citizens what problems they have encountered in exercising their rights as EU citizens. The contributions, which are currently being analysed, will feed into the Citizenship Report to be published on 9 May 2013.

For the opening of the European Year of Citizens 2013, EPN attended to the Forum on Civil Dialogue Participation on the 28th of January 2013 at the European Economic Social Committee. During the conference, the speakers stressed that citizens play a central role in securing Europe’s future and pointed out that the concept of active and participatory citizenship includes consolidation of the fundamental values of democracy, discussion of respect for citizens’ political, economic and social rights and their obligations, and strengthening the feeling of belonging to the EU. The European Year should also focus on the diversity of society’s needs and the fight against discrimination and inequalities, giving special attention to women, migrant, elderly and people with disabilities.

Some interventions were particularly significant for us and we are glad to report some key concepts:

Roundtable 1 – European Year of Citizens : main issues and challenges

Ariane Rodert is a Member of the EESC since 2010. She gave a general presentation of the European Year of Citizens. Ms. Rodert expressed the importance of this year and the primary roles that citizens have for the future of Europe. She asked “What does it mean today to be a European citizen?” and shared statistic results of the participation of citizens in Europe in terms of votes, knowledge of their rights, knowledge of their influence on the situation of Europe. She explained that:

• 42% know what it is to be a EU citizen

• only 32% are well informed of their rights

• 40% took part in the past elections

• and that only 30% know they can influence EU policy

She also underlined that these percentages are decreasing. That is why, this year is about bringing citizens together in order to build a better European community. The key poles of the project are:

• Easy accessible information for everyone

• Dialogue agreements

• Common values and principles

• Mechanisms to evaluate

• Matching the EU Policy with the European values for all Member States

• Better communication with Member States

Mr Rodert concluded stating that freedom of movement does not stand for citizenship! European citizenship means education, economic solvency, youth employment and social communication.

Riva Kastoriano – as the Director of CNRS Paris – spoke about the sense of belonging in the EU. She explained that << […] when we speak about Europe we speak about diversity – a linguistic, cultural ans social diversity. We have a dominant culture which is the majority culture and the minority culture, so we should ask ourselves what we mean for European identity or what identity do we refer to? Migrants, extraeuropean migrants, intra-european migrants develop new belongings and look for new points of references. In the context of migration and European integration, the concept of citizenship changes and evolves. >>.Ms. Kastoriano elucidated that the practice of citizenship is based on the practice of the common good which, nowadays, distances itself from the conception of national identity. Identities become transnational finding a way to work around the the single souveregnities. In this context, the consolidation of transnational communities lies upon a paradoxe: transnationalism does not eliminate national societies in the sense that states have a strong interest in maintaining their sovereignty. Their sovereign status remains the foundation of the state identity. The States fear the loss of souvereignity. And it is actually this fear that encourages populist discourses.

Moreover, populism often mobilise hostility against immigration with the justification that immigrants invade our territory and take advantages of our welfare. In this way, the immigration issue has become a matter of security and of border control.

Ms Kastoriano stated that, today more then ever, Europe needs to build another image. Another vision of itself and of its culture. She pointed out that the European Union needs new forms of political negotiations and of participative democracy, that the notion of citizenship needs to be more inclusive: << The universalism demanded from a global culture is confronted to particularisms, regional governance and individualistic societies. So in order to develop a political commun culture, citizens need to go through a most comprehensive process of acculturation, a multi-dimensional process involving languages, cultural beliefs and values exchange between cultures. We need a society where the integration of members of the minority group into the social structure of the majority group goes beyond the concepts of “multiculturalism” and “assimilation” (both much criticized). We should be asking ourselves this crucial question: has free circulation, pillar of the European Union, become a conflict itself? >>. She concluded by encouraging the European citizens to be responsible of finding different contents for a new European legitimacy.

Gabriella Civico, member of European Year of Citizens Alliance, presented her organisation which represents more than 3000 organizations in Europe and called on the EU institutions to:

• give European citizenship its meaning by fully taking into account article 11 of the Treaty on European Union (TEU) dedicated to the citizens’ participation in the democratic life

• ensure that the implementation of the European Year of Citizens 2013 is given appropriate financial means since the current budget proposal would only allow for top-down communication measures and not for tangible actions

• closely involve the civil society organizations in the preparation and the implementation of the European Year of Citizens 2013 She also reminded us that EYCA prepared a “Manifesto” on EU citizenship that can be consulted at: http://www.eurolocal-cas.com/?p=6304

Roundtable 2 : socio-economic integration as the prerequisite to civic participation?

Marie Arena, Senator and Former Federal Minister of Social Integration, Equality of Chances and Intercultural Dialogue, made some political comments on the national perspective. She said: << We can’t talk about citizenship unless Europe defends us. Europe is guilty for the financial situation and citizens are paying for it. We need politicians to participate and fight for more socialization in Europe … From now on every aspect should be solved at a European level! European citizenship is everywhere, at a local, regional and national level! >>.

Bruno Amoroso, Docent Emeritus at the University of Roskilde, gave us his insight on the socio-economic integration and participation. He stressed that in order to give content to the general principle of citizenship, the EU needs to motivate and educate people and migrants on the functioning of the european democracy. He says: << Is it understanding the EU an obstacle? No. It is the lack of information and interest which represents an obstacle. We cannot speak about “interculture” without establishing clear terms for such a big project. We should also review and give strenght to the EU institutions. The European Parliament should be a real parliament and the European Commission should consist of commissioners elected by the people. >>.

Commission should consist of commissioners elected by the people. >>. He also presented a case study concerning the Romanian community in Italy. He explained how the Romanians are very close to the italian culture although they face some intercultural problems in this country. Misperceptions on the role of their clan and their family system make integration difficult for this group, even if – in his opinion – integration should be “pluirsided” and not “unisided”. In fact, Romanians are mainly active in the informal sector and the illegal one. Italy’s challenge is to bring out this community from the “grey” sector by recognizing their skills. In fact, they have strong experience in social entreprises. They actually know how to establish business activities in different sectors and they know how to work in groups. The problem is that the EU wishes to resolve this problem through individualistic solutions but they are not appropriate. Romanians more than other groups, act in a cooperative way and build their communities on family structure.

Mr. Amoroso concluded by saying that we are not just individuals. We leave in groups and work together. The European Union should find new solutions about how to educate this community on our values in terms of solidarity (not on how to read the European constitution!). They deserve to emerge from the sector of informal economy to join the official one because they have qualifications and the EU has just to find a way to recognize their know-how.

Elzbieta Kuzma, Researcher at ULB, presented her research on the role of immigrant associations in socio-economic integration by focussing on the Polish community. She specified that a particular element caracterising the Polish community in Belgium is that it developed in an informal way, at least until the 1st May 2009, when Belgium suppressed any mobility limitation for Polish migrants and their real integration started.

As regards political participation in the context of migration, Ms. Kuzma underlined that it remains still low and weak due to the general lack of trust and the need of people to deal with daily problems. In Belgium, we have just seen two very inclusive “communes”during the municipal elections : Saint-Gilles and Etterbeek which have involved concretely migrants of different nationalities. She called for politics to decostrunct stereotypes and be closer to the citizens.

social_media_and_your_business

Social Media & Your Business

Without doubt, social media is transforming our social and private lives. We can connect more easily with friends and old school mates, read reviews of products and services from other consumers before we decide to buy a TV or book a hotel room – even find a soul mate.

But professionals have wildly different views on, and experiences of, social media for business-to-business use. There are fervent advocates, firms whose staff are blogging, tweeting, setting up LinkedIn and Facebook pages. They see social media platforms as a key communication medium of the future. Others regard social media with clear distain and see its use as damaging to both brand and reputation.

Wherever you sit on the social media opinion spectrum, be in no doubt that it cannot and should not be ignored. And because social media is still very much in the early developmental and experimental phase, because it is so instantaneous, because new forms of social media are emerging all the time, it’s extremely difficult for researchers to forecast medium to long term trends of its impact in all business sectors and different geographical regions. The result of this is that your company, if not prepared, could find itself, quite quickly, trailing your competition.

Hearst Magazines UK is a wholly-owned subsidiary of US-headquartered global media giant Hearst Corporation. It publishes 22 magazines and 21 websites in the UK.

Its CEO Arnaud de Puyfontaine, also Executive Vice President of Hearst Magazines International, believes that all companies now, regardless of sector and geographical region, need to have a social media strategy – even if they are not using social media.

“Whether you want to use it or you don’t want to use it, you have a corporate image and a role within a social environment, whether you like it or not. In one way or shape or form, you are going to be taken by social media,” says Arnaud.

“Social media will continue to impact on the provision of information, including traditional media. It has to be part of the way brands manage their reputation and their image. But it will not replace the power of trusted sources of information. People form opinions and take decisions on trusted facts.”

Arnaud says that there is no balance in social media between fact and opinion, or assurances on the integrity of information that is communicated via social media. But he says social media is not a threat to the provision of information of integrity, “Because it’s a fad – Look at TripAdvisor which you can manipulate. The day I own a hotel and resort I will be very happy to use TripAdvisor to get lots of five star reviews. And Wikipedia. You can read on Wikipedia I have five wonderful daughters – of course, one of my daughters wrote it and she was absolutely right!”

Arnaud says his profession, the media industry, which should really be leading in this area, is still adapting to the impact of social media.

“We distribute and circulate content the way our consumers want to consume it. Social media is a catalyst for change in traditional media along with the internet and e-commerce, which are enabling the media industry to think radically about what type of ecosystem it has to build.

“The traditional definition of the media – broadcast, radio and print – is becoming less and less relevant. What is important is to be able to focus the raison d’être of the media around each customer. How are we going to leverage our connection? With EsquireCosmopolitanHarper’s Bazaar, we build around this connection to create a more in-depth relationship which is a multi-touch-points approach to make the relationship more and more of an addiction, and with more with more and more must haves, to create opportunities to get into new revenue sources.

Arnaud believes that social media has the potential to damage corporate and personal brands if it is not regulated and note integrated into corporate strategy.

“I am a racing driver but I respect the speed limit. Theoretically I could do 150 miles on the road, but I don’t. Every potential tool has the potential for excess, it’s how you regulate to make the tool a positive rather than a negative. I am a chief executive. My private face is not going to interfere with my public face.

“There will always be excesses, but for a company to have more connections with its customers is a positive – that is the way I view it.”

Eighteen months ago Kris de Jager of IIC Partners’ Australia-based member firm de JAGER & Associates decided that social media was the way forward.

“At the time I was extremely committed to speed up our level of interaction within the social media space. I engaged an outside expert and gave him carte blanche to act on our behalf as though he was an employee.

“But he did not take us on a journey, he ran away from us. He made of a lot of assumptions in terms of our commitment and understanding of social media and our engagement levels. I had a lot of people in the firm who were totally against the whole thing. The problem is you can’t learn live – it was a hell of a price to pay.

“We had a blog, a Linkedin group, a Twitter account and various other sites. And once these blogs and tweets go out and they are out there forever. Eighteen months later I am still getting 50 to 60 WordPress posts every week asking me to comment on things I wrote eighteen months ago.

“Experts in the digital and social media industry do a lot without thinking as it is still a new volatile and evolving space. Simply getting exposure is often seen as success and it’s not about the quality of the communication.

“You have to be very careful about what goes out into cyberspace as it is so sensitive to cultural interpretation. A colleague in India could say something that is perfectly acceptable as a business communication in India, but which could embarrass the company in Russia.”

Kris has seen many professionals enthusiastically seize social media tools only to end up posting what they ate for breakfast or worse, sycophantic commentary of no value to their audience.

“If you blog or tweet it has to be strategic and of genuine value. Be aware it may not be relevant six months later and you can’t defend it. You have to be able to feed quality content on a continuous basis because you lose credibility if you can’t keep up the pace or the quality. You need to decide who your information is directed at; there are a lot of people who have a very dim view of social media.

“And from a compliance point of view you have to be very, very careful. If someone says something that is contentious or is even illegal, the whole company can be implicated. Social media communication is only as strong as the weakest link. It only takes one….

“I believe that social media is the communication medium for the future without any doubt. But professionals need to ensure they have mechanisms in their organizations to control what goes out. The people with most technical expertise in a business are never the most knowledgeable when it comes to the core business and content.

“So we have done away with the tweets, our Facebook pages and blogs. We are still on Linkedin. We are very strict with what we post to ensure consistency. Photographs, definitions, grammar opinions are all very professional. That is where we are right now. From a brand positioning point, it’s not right to become too reliant on social media.”

Golden Rules for Getting it Right

Social media for professional communications is evolving at different rates within countries and business sectors, and its acceptance as a professional communication tool varies between these countries and sectors. Social media walks a blurred line between personal and professional communication.

1. Be useful – Seek out and share content that is going to be of value or interest to your target audience – your clients and other contacts; take a client-centric ‘outside-in approach';

2. Be generous – Share other people’s tweets, updates and blogs when you value what they have written, and you believe other contacts and clients may also value the information;

3. Show yourself – Inject some personality into your blogs/tweets to create genuine touch points with clients and others. Why you are running the London Marathon for charity is interesting, especially if it has provided professional learning points; spotting a celebrity or saying you just ate breakfast is not;

4. Be appropriate – Do not advertise, or worse, say how great you or your firm are. If you need to criticize, criticize the idea not the person;

5. Be perfect – Ensure grammar and spelling are correct;

6. Start at a pace you can maintain – Don’t blog or tweet or post every day or every few days if you can’t maintain the pace and quality of information.

And of course, check to see your organization’s brand and messaging guidelines – what you post may need authorization first, even if you are doing it in your own time.

International Social Media Usage

Research by Neilsen, published in September 2011, shows stark differences in social media take-up and preferences in 10 countries – Australia, Brazil, France, Germany, Italy, Japan, Spain, Switzerland, the United Kingdom and the United States.

The United Kingdom and Australia are the countries with the highest percentage of internet users in the world, in terms of percentage of total population at 82.7% and 80.1% respectively, according to Internetworldstats.com). They were also the only two countries where LinkedIn, which is the leading global social media platform for professionals, featured in the top five most popular social media platforms among internet users. In the UK, 9.31% of internet users use LinkedIn, compared with 10.34% in Australia.

Across all 10 countries reviewed, the use of Twitter varied greatly with Brazil at 31.37%, Japan 24.1%, Spain 13.82%, the UK 13%, the USA 12.37% and Australia 10.66%. Twitter didn’t make the top five list in the other countries. Google-owned Blogger, and the self-hosted WordPress, both popular free-to-use blogging tools, also feature strongly. In Brazil 53.73% of internet users use Blogger, compared to WordPress at 28.3%, in Spain Blogger is at 43.15% and WordPress is at 19.04%, in Italy Blogger is at 30.74% and WordPress is at 13.5%, in Australia 26.57% of internet users use Blogger and 13.32% use WordPress, in the UK, Blogger is at 22.5% and WordPress at 10.39 and in the USA Blogger is at 23.96% and WordPress is at 10.23%. France and Germany have Blogger at 19.4% and 13.16% respectively (WordPress did not make the top five social media platforms in France or Germany).

And in China, Facebook and Twitter are banned.

By Polly Stewart

* This article is taken from the following link: http://iicpartners.com/

Portrait of a cheerful middle aged business woman with her blur team in meeting

Why Board Diversity Matters?

Women make up 51% of the world’s population, spend $US20 trillion globally and influence at least 80% of all the purchasing decisions. So why do the women of the US Fortune 500 hold only 15.7% of publicly-listed corporate board positions, and women in the UK only hold 13% of FTSE 100 companies executive and non-executive board directorships?

Co-CEOs of New York City’s Chadick Ellig, Susan Chadick and Janice Ellig, talk to IIC Partners CMCO Polly Stewart about board diversity.

“I’m going to ask you to consider a scenario that may make you feel a little uncomfortable: imagine if the majority of boards were comprised almost entirely of African American male directors?” says Janice Ellig, adding: “Why is it then that the majority of boards comprised mainly of white males is acceptable?”

“Some may ask: why look for change if our predominately white male boards are functioning?” Susan Chadick states. “Is there any need for more diversity? In fact the issue, highlighted by the recent global financial crisis in 2008, is that corporate current boards are not functioning optimally and ‘group think’ may be at the heart of the problem.”

Michael Lewis, author of ‘The Big Short’ and ‘Liar’s Poker’, observed: “One of the distinctive traits of the financial disaster was how little women had to do with it.”

If the bottom line is what really counts, then the business case for the changing status quo has been made in a myriad of studies. McKinsey, Catalyst and others, show a strong correlation between better financial performance when there are more women in the board room. And these numbers are significantly better. According to one study by Catalyst, on average ROE was 53% greater for companies with more women in the boardroom; and for those who had more women in the C-Suite, ROE was on average 35% greater. Furthermore,  looking at stock price increases from 2008 to 2009 among S&P 500 companies,  the stocks of the 15 led by women CEOs gained 46% compared with the overall S+P 500 gaining 25%.

What is holding companies back?
Many organizations embrace the concept of more gender diversity. Yet, what is really holding companies back from adding more women to their board? According to Ellig, one reason is that “while companies pay lip service to wanting more women, there are no teeth in the directive”. Boards, CEOs and senior management need to be rewarded or penalized for the lack of diversity on their team. Diversity must be embraced at the top and through the organization as a strategic business imperative.”If it doesn’t get measured, it doesn’t get done!”

“The crux of the issue is that men do not see gender diversity as critical to a company’s success,” explains Ellig. This is depicted in Bain & Company’s research, The Great Disappearing Act: Gender Parity up the Corporate Ladder‘ where , 84% of women said greater diversity should be a strategic objective for their  companies while only 44% of men saw this as a critical issue

Another obstacle to gender diversity is that CEOs and boards prefer, and seek out professionals that are like them, selecting sitting and retired CEOs. In the US, the pool of female sitting CEOs is currently 12 in the F500. Boards say there is not a pipeline of qualified women, and perhaps not if the pool is only in the CEO category. However, the pipeline is bulging with female talent from other sources such as entrepreneurs, academia, sciences, those in the C-Suite and those leading major P&L divisions of corporations which could be stand-alone companies. The supply is there, it is about looking outside the box to reach broader pools of talented women.

“Old habits die hard,” Chadick explains. “Those on boards  want to bring on people they already know as  the old boys’ network is still managing to exclude women.”

She explains: “The Bain & Company study also showed that while men and women agree on the advancement of women, twice the number of women as men believe that being appointed to higher positions is not as likely to happen. Men do not see that as a problem; they believe the glass ceiling has been cracked if their own company has  promoted women. They  are unable to look beyond their own company to  see what is occurring in thewider corporate environment.”

Who is promoting diversity?
Countries including Norway, France and Spain have passed legislation requiring a 40% representation of women on all boards. In the U.S. Stephanie Sonnabend, CEO of Sonnesta Hotels, has started the following initiative: 20% female representation on US public boards by 2020. In the UK a 30% initiative has been started by Helena Morrissey, Chief Executive Officer of Newton Investment Management Ltd, favoring an increase of women representation to 30% by 2015, without having legislating quotas. The UK statistics prompted the former UK government minister, Lord Davies, to warn British firms that they were in the “last chance saloon”. If they didn’t move quickly to appoint more women to top positions, they would have to face quotas.

Organizations such as Catalyst, ION, Women Corporate Directors, The International Women’s Forum, DirectWomen, C200, 85 Broads and others, are promoting their members by helping establish a talent pipeline of women to serve on corporate boards. External forces – like the Securities Exchange Commission (SEC) in the US – are requiring greater transparency to describe why and how directors qualify to be on a specific corporate board. They want to know if the company has a diversity policy, and how that affects  its board recruitment practices.

Organizations such as CALPERS, CALSTERS, CALVERT and PAX are voting to withhold investment funds at companies who do not practice greater diversity on boards. In the past two years, the carrot and stick approach is showing positive results, .

According to Ellig, “We  will see this as a developing trend moving forward, and if the large index funds held by, Blackrock , Vanguard, State Street and T.Rowe Price exert their muscle, change will occur..”

Multi-prong Solutions
Without quotas, no single force will be responsible for ultimately changing the face of global boardrooms.  Change, particularly in the U.S., will be driven through an organic, collective effort within the business community and from multiple voices continuing to advocate the bottom line benefits of leadership diversity.

CEOs need to take a public stand that diversity is a business imperative demonstrating to the boards, senior management and middle management, employees, shareholders and the public that more gender diversity means better financial performance for their organization.

On the institutional investor side, large institutional investors need to not vote for directors where it is an all male board.

Chadick and Ellig recommend that corporations and the Executive Search Industry be more proactive:

1) Educate the board and management of the positive, financial performance impact greater diversity has. Make diversity a strategic business imperative, comparable to revenue targets. The board and CEOs must penalize leaders for not meeting this objective;

Ellig stresses that CEOs and boards need more than just tone at the top. Accelerating change requires a TEAM approach-Tone, Education, Action, Metrics-that is embraced and integrated throughout the entire organization.

2) Develop an internal pipeline of talent as a feeder group for the C-Suite and for external board positions. It is not a level playing field within companies, and when women at the top leave their positions it is difficult to regain that representation. According to Bain & Company, even a 5% difference in the female attrition rate results in having half the number of women at the top after a 10 year period;

3) Widen the sources to new pools of talent in order to increase diversity at the board level, to attain a diverse slate of highly qualified, candidates. Search firms need to be more proactive with clients.

4) Board assessments need to be more rigorous, not just at the board or committee levels, but of individual directors. Dead wood does exist in virtually every boardroom and to protect shareholder value and uphold fiduciary responsibility, board members and institutional investors need to refresh the composition of the board.

5) Make a proactive plan and stick to it. Commitment at the top by Boards such as Texas Instruments paid off over a 10 year period, resulting in 40% diversity and excellent financial performance.

“The optimist in me says if we keep talking about it, and if we keep writing about it, increased diversity on boards will happen naturally,” Chadick states. “The realist in me says let’s give this a big push to ensure diversity parity is attained.”

By Polly Stewart

* This article is taken from the following link: http://iicpartners.com/