Female representation on boards within the EU may soon be backed by law, with the head of the European Commission reviving proposals from nearly a decade ago.
Legislation backing a quota for women on boards has been blocked by some national governments since 2012, not necessarily because they oppose the measure but because they believe it is in the national sphere of jurisdiction.
Some of these states have already imposed laws to increase female board membership. For example, Denmark passed a law in 2013 requiring the 1,400 largest Danish companies to set targets for the proportion of women on their boards and to develop a policy to increase numbers of women in management. This led to the proportion of women being elected to Danish boards increasing by 70% within five years.
Now, European Commission president Ursula von der Leyen has said she will try to get the new rules passed.
Von der Leyen, the first female head of the Commission, told the Financial Times: “It’s time to move forward with this file,” on Wednesday.
Diversity and inclusion
“It’s been sitting on the shelf for 10 years now, but in these 10 years there has been a lot of movement and learning.”
Von der Leyen said there was overwhelming evidence that companies with boardroom diversity were more successful and introducing legal requirements would quicken the pace of progress towards more gender-balanced representation.
The 2012 legal proposal would require listed the EU’s listed companies to fill at least 40% of their non-executive board seats with women.
Now, however, with France holding the EU’s rotating presidency, von der Leyen indicated there was more impetus to push for the proposed directive. She said she was also optimistic that the new German government would welcome reviving the proposals.
France has the best figures for female representation in boardrooms of the largest listed companies at 45% against a 30% average for the EU as a whole.
Von der Leyen said EU lawmakers should aim to settle the directive in the first half of the year if possible, and a deal could be done in 2022.
The directive does not set out sanctions, leaving these to member states, and it will not apply to small and medium-sized, or unlisted, companies – although it does state that these firms should be encouraged to promote diversity.
The current blocked legislation emphasises that, to achieve gender equality in the workplace, companies should develop a “gender-balanced model of decision-making at all levels, while taking steps to eliminate the gender pay gap and introducing flexible working conditions for all employees”.
In 2012 the European Parliament received “reasoned opinions” from the national parliaments of Denmark, the Netherlands, Poland, Sweden, the UK, the Czech Republic, alleging that the proposals did not comply with the principle of subsidiarity. Some delegations continue to prefer national measures or non-binding measures at EU level.