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BackFollowing a long battle, EU Commissioner and Vice President Reding has succeeded in pushing through a legislative proposal within the Commission, according to which 40 percent of all supervisory board seats in listed European companies have to be occupied by women. The pressure had simply become too much; the rejectionists within the Commission could no longer halt the foray of the Luxembourg Commissioner. Shortly before the resolution was passed, the AK sent an open letter to all EU Commissioners asking for their support for Reding’s proposal.
No female quota for executive boards
It is certainly welcome that there is now a legislative proposal on a female quota in supervisory boards; however, it is very regrettable that Commissioner Reding was not able to convince her colleagues in the Commission to support her demand for a female quota for executive boards. Nevertheless, the now passed proposal sets out that companies have to give priority to women who have the same qualifications as their male colleagues if not 40 % of their supervisory board positions are occupied by women. If the ca. 5,000 listed companies in the EU have not complied with this proposal by 2020, the Member States shall use “effective, proportionate and dissuasive” sanctions - for example by imposing fines or by declaring the filled positions as not being valid. The idea, that the Member States should formulate their own respective sanctions does not get universal support as there might be too much room for manoeuvre. By paying a fine one could simply shirk away from fulfilling the quota. However, it is still too early to tell whether this would actually happen. Public companies are even subject to a stricter benchmark to fulfil the quota in 2018. Enterprises with less than 250 employees and an annual turnover of maximal 50 million Euro are completely exempt.
Resistance is building up in the Member States; EU Parliament is backing Reding
Whilst the EU Parliament is backing Reding’ foray, large resistance is building up in Europe’s capitals. The British and Swedes have already surrounded themselves with a group of quota opponents. The German government too is against legal interference from Brussels - also due to its failure to reach internal agreement. However, there was no alternative to the quota: all current pledges or voluntary agreements made by companies “had changed nothing”, said Reding time and again. Nevertheless, in spite of all appeals, the share of women on boards of listed companies only resulted in a minimum rise to 13.5 percent during the past twelve months.
In order for the quota passed by the Brussels authority to become EU law, it still has to be adopted by the EU Parliament and the Member States. This process will not be easy; as in the past, the AK will follow it with great interest.
Further information:
Proposal of a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures
AK press release and letter to all EU Commissioners to support a female quota (German)
Press release by the EU Commission on gender quota for supervisory boards
It is certainly welcome that there is now a legislative proposal on a female quota in supervisory boards; however, it is very regrettable that Commissioner Reding was not able to convince her colleagues in the Commission to support her demand for a female quota for executive boards. Nevertheless, the now passed proposal sets out that companies have to give priority to women who have the same qualifications as their male colleagues if not 40 % of their supervisory board positions are occupied by women. If the ca. 5,000 listed companies in the EU have not complied with this proposal by 2020, the Member States shall use “effective, proportionate and dissuasive” sanctions - for example by imposing fines or by declaring the filled positions as not being valid. The idea, that the Member States should formulate their own respective sanctions does not get universal support as there might be too much room for manoeuvre. By paying a fine one could simply shirk away from fulfilling the quota. However, it is still too early to tell whether this would actually happen. Public companies are even subject to a stricter benchmark to fulfil the quota in 2018. Enterprises with less than 250 employees and an annual turnover of maximal 50 million Euro are completely exempt.
Resistance is building up in the Member States; EU Parliament is backing Reding
Whilst the EU Parliament is backing Reding’ foray, large resistance is building up in Europe’s capitals. The British and Swedes have already surrounded themselves with a group of quota opponents. The German government too is against legal interference from Brussels - also due to its failure to reach internal agreement. However, there was no alternative to the quota: all current pledges or voluntary agreements made by companies “had changed nothing”, said Reding time and again. Nevertheless, in spite of all appeals, the share of women on boards of listed companies only resulted in a minimum rise to 13.5 percent during the past twelve months.
In order for the quota passed by the Brussels authority to become EU law, it still has to be adopted by the EU Parliament and the Member States. This process will not be easy; as in the past, the AK will follow it with great interest.
Further information:
Proposal of a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures
AK press release and letter to all EU Commissioners to support a female quota (German)
Press release by the EU Commission on gender quota for supervisory boards