25th Oct 2016

Parliaments back EU-level gender quota law

  • Over 90 percent of board members are now men, says the European Commission (Photo: ShellVacationsHospitality)

Most national parliaments in EU countries say the European Commission should go ahead with a law on female quotas on corporate boards. But six disagree.

Commission spokeswoman Mina Andreeva told press in Brussels on Wednesday (16 January) the consultation with MPs was not about the content of the proposal, but about "subsidiarity" - the question whether a given problem is best tackled at EU or local level.

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Parliaments are entitled under the Lisbon Treaty to provide opinions on whether proposals adopted by the commission subscribe to the subsidiarity principle. If one third contest, then the commission must review its draft.

The commission aims to force publicly-listed companies to have at least 40 percent women among their non-executive directors.

The green light by 21 out of 27 national assemblies is enough for the commission to go ahead, with MEPs and member states to thrash out details of the new law in talks in Brussels in the coming months.

The six malcontents are the Czech Republic, Denmark, the Netherlands, Poland, Sweden and the UK.

Along with its no-vote, the Czech Republic's lower house noted that the eight-week time frame given to mull the issue collided with Christmas holidays.

"[It] reduces the time that is in fact available for deliberation of the proposal in national parliaments," said the chamber in its response to the commission.

A majority of the Danish parliament said the gender-gap could best be resolved at national level.

Some Danish MPs, including those in the pro-EU camp, noted that the commission's 40 percent objective is unclear.

They say the proposal must clarify whether the methods of achieving the 40 percent objective - such as transparency in the recruitment process - are binding or if it is the threshold itself that is binding.

Dutch deputies say the commission's proposal could undermine national measures already in place.

"It is impossible to conclude that national initiatives have not been successful, since most initiatives are still in their infancy," the Dutch parliament said. The Netherlands introduced a statutory target of 30 percent for large companies on 1 January.

The Polish senate said the draft EU law would overlap with existing national measures and fail to remove internal market barriers.

Sweden said the commission's proposal neglects the influence of shareholders on corporate governance. Normally, company owners are able to dismiss the board members at any moment. But Reding's move would impose a "labour law" on their appointment, said the Riksdag.

"The board members' responsibilities are based on trust and are not a position of employment in labour law terms," it noted.

The UK is the most vocal in its opposition.

While letters from the other five parliaments averaged two pages in length, the UK's House of Commons sent a 74-page missive.

“The majority of women are not in favour of quotas, fearing that they will be considered mere tokens or sidelined within the boardroom," said Jo Swinson, the UK's minister for women and equalities, in the text.

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