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19th Aug 2022

EU commission to 'smash glass ceiling' on gender

  • The European Commission draft legislation would force large companies to hire more women board members. (Photo: orkomedix)

The European Commission wants a quota imposed on the supervisory boards of large companies in an effort to improve gender equality.

“Today we are proposing a legislation to smash the glass ceiling that keeps talented women out of top jobs,” EU justice commissioner Viviane Reding told reporters in Brussels on Wednesday (14 November).

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The gender quota is a legally binding directive and would require the some 5,000 companies listed on the stock exchange to have women represent 40 percent of their boards by 2020.

State-owned companies like France’s EDF or Belgium’s Belgacom would have until 2018.

The decision comes after months of resistance from nine member states led by the UK. A handful of EU commissioners had also voiced reservations, something which saw the proposal taken from the table last month to be tweaked.

Companies will have to choose qualified women for top jobs until the boards reach the threshold. Those who fail will face penalties drawn up and implemented by the member state once the directive is transposed into national law, sometime in 2016.

“Our proposal has teeth, member states will have to lay down convincing and effective sanctions,” said Reding.

UK supports Reding bill, says it is not ‘mandatory’

But the UK, for its part, has interpreted Reding’s bills as not mandatory and now supports it.

“The UK welcomes the commission’s decision not to impose mandatory quotas for women on boards […],” it said in a statement.

Meanwhile Germany has already spoken outright against the proposal. A spokesperson in Berlin stated that the bill on female quotas “is a matter of national competence, not EU law.”

Germany said it will now join the ranks of opposing member states including Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, the Netherlands, and the UK.

Meanwhile, Reding’s directive primarily targets its non-executive directors who have no direct say in the day-to-day running of the company.

An overwhelming majority of males in the EU sit on the boards with 96.8 percent chairing them.

To date, women make up around 15 percent of the non-executive boards but the average varies considerably across member states. The percentage is even lower for executive-directors.

Finland tops the list with 27.9 percent of women in non-executive positions compared to 3.3 percent in Cyprus.

Increasing those numbers could render the companies more profitable, argues the commission.

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