Indicator C9 of the VSME standard refers to the ratio of gender diversity in the governing body of a small or medium-sized enterprise (SME). This indicator is important for assessing the gender balance in the company's high-level decision-making.

Definitions

Gender diversity refers to the balanced representation of different genders in organisational structures, ensuring that both men and women have equal opportunities for participation and influence.

According to the VSME standard, the governing body is the highest decision-making authority in a company. Its form may vary depending on the country and the legal classification of the entity. In Romania, the form of organisation of the governance body in a small or medium-sized enterprise (SME) depends on the type of company: the General Meeting of Associates, the Administrator, the Associates, the General Meeting of Shareholders, the Board of Directors, the Management Board and the Supervisory Board.

Gender diversity ratio calculation

The VSME Standard, building on the requirements of the Financial Sector Sustainability Disclosure Disclosure Regulation (SFDR), defines the gender diversity ratio of the governing body as the average ratio of the number of women to the number of men on the governing body.

The formula used is.

Gender diversity ratio = Number of female members / Number of male members​

For example, if a governance body is composed of six members, three of whom are women, the gender diversity ratio will be 1, indicating a perfect gender balance.

International policies and European legislation on gender diversity

International organisations such as the OECD promote gender diversity in companies' management structures. The OECD recommends measures such as voluntary targets, reporting requirements and private initiatives to improve gender diversity on boards and in senior management of listed companies. These measures are designed to counter the phenomenon of "groupthink" and bring diverse perspectives into the decision-making process.

At the European level, the Directive on Gender Balance on Company Boards (also known as the "Women on Boards Directive") mainly covers large companies listed on regulated markets. SMEs are not directly obliged to comply with these requirements. However, adopting practices that promote gender diversity can bring significant benefits and prepare the company for possible future regulation in this area.

Romania has a legal framework that promotes equal opportunities and equal treatment between women and men. The Framework Law on Equal Opportunities for Women and Men provides, among other things, for the prohibition of direct or indirect gender discrimination in the field of labour and the promotion of balanced participation of women and men in decision-making positions in all spheres of public and private life. However, the law does not provide for mandatory quotas for women in private companies.

Indicator use by SMEs

Although SMEs are not obliged to fulfil the same standards as large listed companies, the use of the C9 indicator can bring significant benefits. Reporting this indicator demonstrates a commitment to transparency and fairness, which is valued by investors, business partners and other stakeholders.

To implement this indicator effectively, it is recommended that the SME:

• develop internal diversity and inclusion policies: these policies should underline the company's commitment to promoting gender diversity at all levels of the organisation.
• establish fair recruitment and promotion procedures: ensuring that hiring and promotion processes are transparent and merit-based, without gender discrimination.
• regularly monitor and evaluate gender diversity: collect and analyse data on the gender composition of the staff and the governance body to identify possible imbalances and implement corrective measures.
• report publicly on progress: Publishing gender diversity information in annual reports or other official company communications, highlighting initiatives and results achieved.

Although Romanian SMEs do not have strict legal obligations on gender diversity in governance bodies, the implementation and reporting of the C9 indicator according to the VSME standard reflects a proactive commitment to international good practice and can contribute to improving company performance and reputation.