Content area
This paper investigates gender inequality in corporate governance in Croatia, where women hold only 19% of management board positions and 25% of supervisory board roles. Through qualitative analysis of secondary sources, the study analyses company-level practices, legislative initiatives, and theoretical approaches including Diversity Theory and Agency Theory. Case studies from Hrvatski Telekom, Atlantic Grupa, and Podravka illustrate progress at the firm level, while comparisons with the EU average (34.7%) highlight Croatia's structural lag. Despite the adoption of Directive (EU) 2022/2381, the findings indicate that declarative support alone is insufficient without enforceable mechanisms and cultural transformation. The paper concludes that achieving gender-balanced governance is essential not only for fairness but also for corporate resilience, sustainable development, and long-term competitiveness.
ABSTRACT
This paper investigates gender inequality in corporate governance in Croatia, where women hold only 19% of management board positions and 25% of supervisory board roles. Through qualitative analysis of secondary sources, the study analyses company-level practices, legislative initiatives, and theoretical approaches including Diversity Theory and Agency Theory. Case studies from Hrvatski Telekom, Atlantic Grupa, and Podravka illustrate progress at the firm level, while comparisons with the EU average (34.7%) highlight Croatia's structural lag. Despite the adoption of Directive (EU) 2022/2381, the findings indicate that declarative support alone is insufficient without enforceable mechanisms and cultural transformation. The paper concludes that achieving gender-balanced governance is essential not only for fairness but also for corporate resilience, sustainable development, and long-term competitiveness.
Keywords: - Competitiveness, Corporate governance, Gender equality, Management, Sustainable development
1. INTRODUCTION
Gender equality in corporate governance is becoming an increasingly important issue not only in the field of human rights, but also in the context of economic efficiency, sustainability and competitiveness of companies. Although some progress has been recorded in recent decades, women are still underrepresented in management and supervisory positions, both at the European Union level and in Croatia. According to data from the European Institute for Gender Equality (EIGE), women make up just over 30% of board members in the EU, while the number of women in leadership positions is even lower, which points to structural barriers and gender inequality in access to economic resources and decision-making power (EIGE, 2023). In the context of the Republic of Croatia, the situation is further aggravated by long-standing social stereotypes, the lack of systematic support for women in their careers, and the slow implementation of European guidelines and standards. Although there are positive examples of companies that are recording progress in increasing the share of women in management, these cases are still exceptions, not the rule. This paper analyses the current state of gender equality in corporate governance in Croatia, identifies examples of good practice and highlights the importance of integrating Directive (EU) 2022/2381 on gender balance among directors of listed companies into the national legislative framework. This contributes to the understanding of how institutional changes, along with changes in organizational culture, can enable fairer, more efficient and more competitive governance in the business sector. The corporate governance system, as a key mechanism for ensuring management accountability to shareholders and other stakeholders, includes a number of internal and external instruments, including the composition and work of supervisory boards (Tipuric, 2006; Tipuric, 2008).
In the Croatian context, authors such as Tipurić particularly emphasize the importance of governing bodies as instruments for protecting the interests of owners and ensuring business efficiency. In accordance with the Corporate Governance Code (HANFA and Zagreb Stock Exchange, 2020), diversity in boards - especially gender - is increasingly highlighted as an important component of quality and responsible corporate governance, although in practice it is still rarely institutionalized through quotas or binding mechanisms (Dubrovski, 2023). Understanding the problem of gender equality in corporate governance requires a theoretical framework that encompasses different approaches. Diversity Theory emphasizes that diverse board compositions bring a broader perspective, greater creativity and better adaptation to the market. For example, Atlantic Grupa's strong representation of women in leadership illustrates how diversity in management can lead to broader perspectives and improved adaptability. On the other hand, Social Exchange Theory suggests that the inclusion of women in management structures increases trust among employees and contributes to social cohesion within the organization. Agency theory, which deals with the relationship between owners and managers, is also used to explain the role of supervisory boards and management boards - it is suggested that the inclusion of women can reduce agency costs through greater accountability and ethics in management.
2. LEGAL AND CULTURAL BARRIERS TO GENDER BALANCE IN CROATIA
The report concludes that, while there are positive examples and will at the declarative level, the EU needs to make further efforts to ensure that gender balance does not remain just a strategic objective, but becomes an integrated part of all policies, budgets and practices. In this sense, Directive (EU) 2022/2381 on gender balance on management boards represents a step forward - as it introduces measurable targets and time frames - but only synergy between legislation, financial instruments and cultural change will enable true transformation (ECA, 2021). They also cite the fact that gender analysis is often neglected in the programming of funds from the European Social Fund and the European Regional Development Fund. Only a small number of Member States systematically include gender indicators and commitments in their plans and reports. Croatia, unfortunately, belongs to those countries where the institutional framework is still weak, and implementation is fragmented and left to the enthusiasm of individuals rather than a systematic approach (ECA, 2021). One of the main challenges highlighted by the report is the lack of binding targets and monitoring mechanisms. In many cases, efforts towards gender balance have relied on recommendations rather than binding quotas or rules. This has reduced the effectiveness of EU strategies, despite well-established targets, such as the inclusion of 75% of women in the labour market or the reduction of the gender pay gap (European Commission, 2020). In the report, the auditors concluded that the European Commission's policies and measures in the field of gender equality were partially effective, but also insufficiently integrated into EU budgetary policy and funds. Although there were programmes and financial resources dedicated to promoting gender equality, the gender perspective was often not systematically included in the design and implementation of policies - especially in areas such as employment, innovation and regional development (ECA, 2021).
The European Union has formally advocated gender equality as a fundamental value and objective of its policies for more than two decades (European Court of Auditors, 2021). Despite numerous strategic documents, declarations and programmes, the actual impact at the Member State level remains limited, as confirmed by the European Court of Auditors' Special Report No. 10/2021, "Gender equality in the EU - more work needed on the ground" (ECA, 2021).
National-level research confirms this gap between legal efforts and concrete practice. Vrdoljak Raguž,, Krželj-Čolović and Milić Beran (2018) point out in their paper that, despite the adoption of policies and strategies aligned with European guidelines, women in Croatia still encounter structural obstacles when entering boardrooms. Their analysis shows that efforts to increase the share of women are most often declarative and insufficiently accompanied by concrete measures and implementation mechanisms, especially in the private sector. According to data from the Zagreb Stock Exchange, the share of women on the management and supervisory boards of companies listed on the stock exchange remains extremely low. As many as 71% of these companies do not have a single woman on either the Management or Supervisory Board, despite the fact that more than 60% of highly educated people in Croatia are women. This disparity points to deep-rooted decision-making patterns and a systematic neglect of gender balance in corporate structures. The following graph illustrates this worrying data:
3. THE ROLE OF THE EUROPEAN UNION IN PROMOTING GENDER BALANCE: BETWEEN STRATEGY AND REALITY
The European Union has formally committed to gender equality as a fundamental value and objective of its policies for more than two decades (European Court of Auditors, 2021). Despite numerous strategic documents, declarations and programmes, the actual impact at Member State level remains limited, as confirmed by the European Court of Auditors' Special Report No 10/2021, "Gender equality in the EU - more work needed on the ground" (ECA, 2021). In that report, the auditors concluded that the European Commission's policies and measures in the field of gender equality were partially effective, but also insufficiently integrated into EU budgetary policy and funds. Although there were programmes and financial resources dedicated to promoting gender equality, the gender perspective was often not systematically integrated into policy design and implementation - particularly in areas such as employment, innovation and regional development (ECA, 2021). One of the main challenges highlighted by the report is the lack of binding targets and monitoring mechanisms. In many cases, efforts towards gender balance have relied on recommendations rather than binding quotas or rules. This has reduced the effectiveness of EU strategies, despite well-established targets, such as the inclusion of 75% of women in the labour market or the reduction of the gender pay gap (European Commission, 2020). As an illustration, they cite the fact that gender analysis is often neglected in the programming of funds from the European Social Fund and the European Regional Development Fund. Only a small number of Member States systematically include gender indicators and commitments in their plans and reports. Croatia, unfortunately, belongs to those countries where the institutional framework 1$ still weak, and implementation is fragmented and left to the enthusiasm of individuals rather than a systematic approach (ECA, 2021). The report concludes that, while there are positive examples and will at the declarative level, the EU needs to make further efforts to ensure that gender balance does not remain just a strategic objective, but becomes an integrated part of all policies, budgets and practices. In this sense, Directive (EU) 2022/2381 on gender balance on boards represents a step forward - as it introduces measurable targets and time frames - but only synergy between legislation, financial instruments and cultural change will enable a true transformation (European Parliament and Council of the EU, 2022). In many EU Member States, soft forms of regulation such as corporate governance codes have played an important role in promoting board diversity. Although such codes do not have legally binding force, they often operate on a "comply or explain" basis, whereby companies are expected to explain in their reports the reasons for deviations from recommended practices (Tipurić, 2008). However, the absence of mandatory quotas and insufficiently precise guidelines in many codes reduce their real impact (Gargantini and Siri, 2023). According to Klettner (2016), soft regulations such as codes may have the potential to transform corporate culture more profoundly than traditional legal measures, especially when combined with internal organizational initiatives. However, the challenge is that the effectiveness of these measures varies across member states, depending on the national context and corporate will for change.
4. RECOMMENDATIONS AND GUIDELINES FOR STRENGTHENING GENDER BALANCE IN CORPORATE MANAGEMENT
Further progress in the field of gender balance requires a shift from declarative support to implementation mechanisms and a strategic approach within organizations (EIGE, 2023). In this context, recommendations can be directed towards three key dimensions: institutional commitments, organizational practice and changing social perceptions.
At the institutional level, it is recommended to introduce mandatory and standardized reporting on gender representation in management bodies for all subjects of public interest (European Commission, 2022). Such reporting should become part of corporate reporting practices, which would enable greater transparency and comparability between companies. Also, it is advisable to consider the introduction of mechanisms for monitoring and evaluating the impact of legislative measures, especially after the implementation of directives at the national level. Within the framework of organizational practices, it is important to develop internal policies that enable the identification and development of female personnel, with an emphasis on mentoring programs, work-life balance, and systems for objective evaluation of potential when selecting managerial personnel (Catalyst, 2020). Incorporating gender equality issues into human resource management strategies can ensure the sustainability of positive changes in the long term. Finally, it is crucial to encourage a change in perception and break down deeply rooted social stereotypes about the role of women in the business world (EIGE, 2021). Public campaigns, media visibility of successful women in leadership positions, as well as educating young people about the importance of equality can have a powerful transformational effect. Establishing gender-balanced structures in the economy cannot be viewed solely as a regulatory obligation, but as an opportunity to empower organizations and society as a whole.
5. CONCLUSION
Although it could be assumed that the issue of gender equality in management positions in modern society has already been resolved, reality reminds us that the road to equality is still long. The need for legal regulations and prescribed quotas, such as those of 33% and 40% prescribed by the EU Directive, indicates that changes do not come spontaneously. The fact that such measures are still needed, despite declarative support for the principles of equality, shows that institutional will is not enough without a deeper cultural and organizational transformation. The regulatory framework undoubtedly plays a key role in guiding change, but true change only occurs when organizations themselves recognize the importance of inclusiveness and diversity as part of their own vision and responsibility to society. This is precisely why it is necessary to raise awareness of the importance of gender-balanced management bodies - not only for the sake of compliance with regulations, but also for the sake of contributing to a fairer, more resilient and more socially responsible economy. This paper is based on a qualitative analysis of secondary sources, including policy documents, legislation, statistical databases, corporate reports, and academic literature. This methodological approach allowed for a comprehensive and contextual understanding of the challenges and progress related to gender equality in corporate governance in Croatia.
LITERATURE:
1. Catalyst. (2020). Why Diversity and Inclusion Matter: Quick Take. Available at: https://www. catalyst. org/research/why-diversity-and-inclusion-matter (Accessed: 4 April 2025).
2. EIGE - European Institute for Gender Equality. (2021). Gender Equality Index. Available at: https://eige. europa. eu (Accessed: 4 April 2025).
3. EIGE - European Institute for Gender Equality. (2023). Gender Statistics Database. Available at: https://e1ge. europa. eu (Accessed: 4 April 2025).
4. European Commission. (2020). 2020 Report on gender equality in the EU. Available at: https://commission. europa. eu (Accessed: 4 April 2025).
5. European Commission. (2022). Directive (EU) 2022/2381 on improving the gender balance among directors of listed companies. Official Journal of the European Union. Available at: https://eur-lex. europa. eu (Accessed: 4 April 2025).
6. European Court of Auditors (ECA). (2021). Special Report No 10/2021 - Gender equality in the EU: more effort needed in practice. Luxembourg: Publications Office of the EU.
7. HANFA - Croatian Financial Services Supervisory Agency. (2023). Annual Report 2022. Available at: https://www. hanfa. hr (Accessed: 4 April 2025).
8. Tipurić, D. (2006). Supervisory Boards and Corporate Governance. Zagreb: Sinergija.
9. Tipurić, D. (2008). Corporate Governance. Zagreb: Sinergija.
10. Vašiček, V. and Mamić Sačer, I. (2010). 'Corporate governance: theoretical framework and practice in the Republic of Croatia', Proceedings of the Faculty of Economics and Business in Zagreb, 8(1).
11. Zagreb Stock Exchange & HANFA. (2020). Corporate Governance Code. Zagreb: ZSE.
12. Gargantini, M. and Siri, M. (2023). Gender Diversity and Board Composition in Europe. European Company Law Journal, 20(1).
13. Klettner, A. (2016). Corporate Governance Regulation and the Board Decision-Making Process. Routledge.
14. Vrdoljak Raguž, I. , Krželj-Čolović, Z. and Milić Beran, I. (2018). Women on Corporate Boards in the Republic of Croatia in the Context of the European Union Directives and National Policies. International Journal of Business and Management Studies, 10(1).
Copyright Varazdin Development and Entrepreneurship Agency (VADEA) 2025