Monday

22nd Jan 2018

EU parliament backs female quotas for top corporate jobs

  • The EU may emulate Norway in imposing women quotas for company boards (Photo: The Council of the European Union)

The European Parliament on Wednesday (6 July) advised EU businesses to hire women in their executive boards by next year or face a mandatory quota of 40 percent modelled on the Norwegian experience.

Women should make up 30 percent of top management in the largest listed EU companies by 2015 and 40 percent by 2020, MEPs said in Strasbourg in a non-binding recommendation.

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If voluntary measures to increase female representation fail to work by next year, then the European Commission must table legislation to make it binding, they added.

Currently women make up 10 percent of directors and 3 percent of chief executive officers in the EU's largest companies, with the number of women on corporate boards increasing by around half a percentage point per year. At that rate, the goal of having 40 percent female leadership would be attained in 50 years.

Non-EU member Norway in 2003 adopted a similar stance - giving companies two years to voluntarily increase female participation or face a binding quota. The increase under the voluntary system was minor - from five to six percent, but when the binding law was passed, Norwegian companies rushed to hire female directors and CEOs.

"From 2007 to 2009, they increased from six to 39.6 percent. That was very successful," Norwegian public administration minister Rigmor Aasrud told EUobserver in March.

Individual member states such as France, the Netherlands and Spain are also looking at binding quotas.

According to studies quoted by the Parliament's resolution, companies with a higher percentage of women tend to perform better commercially and financially. "Recruitment for positions in corporate management bodies should nevertheless be based on skills, qualifications and experience of the candidate," MEPs stress.

Childcare and equal pensions should also be improved so as to offer more incentives for women to take up top positions while not sacrificing their family life.

EU fundamental rights commissioner Viviane Reding, who earlier this year announced she would table mandatory quotas unless companies deliver on the voluntary pledges, welcomed the Parliament's endorsement.

"Today's vote confirms that the commission is acting at the right time and in the right way," she said.

"If there has not been credible progress by March 2012, I stand ready to take the necessary legislative steps at EU level."

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EU justice commissioner Viviane Reding has said she is up for an "interesting fight" within the commission itself and with nine member states opposing draft legislation on gender quotas for top jobs in companies.

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A new EU bill calls on companies to publish information ranging from anti-corruption and bribery measures to their boardroom policies and employment practices.

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The European Commission and the EU's national governments pass each other the buck on who should move first on a heavily-criticised proposal on the use of genetically modified organisms (GMOs) in food.

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The president of the European Investment Bank, Werner Hoyer, said the bank had high standards - but did not explain why an anti-fraud report on a loan to Volkswagen was being kept secret.

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