Proposals for a 40% quota of female board members in listed firms across the European Union have stalled, it emerged this afternoon. Following an intense debate at the European Commission in Brussels, officials shelved the proposals as they had been presented, with justice commissioner Viviane Reding – who had spearheaded the plans – now expected to deliver a watered-down version on 14 November.
Under Reding’s original proposals, the 40% quota would have been required by law and enforced by a range of EU sanctions. Reding crafted the legislative package in the wake of her own research into gender balance on the boards of listed companies. According to her study, just one in seven board members in EU firms is female, and it would take four decades to achieve a more satisfactory balance at the present pace of change.
However, the proposals met with significant opposition from a number of EU member states, who were concerned that the quotas would have a negative effect on national employment legislation and disrupt internal corporate policies. Among the most vociferous opponents was the UK government, which said: “We do not think it is right to consider introducing quotas while some member states are successfully pursuing voluntary approaches. We believe that self-regulation should be allowed to prove that it can radically increase the number of women on European boardrooms.”
Last month, a group of nine EU member states, including the Netherlands, penned a letter to the EC indicating that they would not vote in favour of Reding’s proposals. “We agree with the commission’s stance that there are still too few women on the boards of publicly listed companies,” they said. “[However], we reiterate that any targeted measures in this area should be devised and implemented at national level. Therefore, we do not support the adoption of legally binding provisions for women on company boards at European level.”
Professional Manager will report on how the diluted proposals differ from the original plans on 14 November.