September 4, 2012 EU to push for 40% female quota on boards
The EU is planing to force large listed companies to ensure that at least 40% of the non-executive directors are filled by women by 2020 in order to improve diversity and corporate governance across Europe. The Financial Times claims to have access to a draft proposal which they state should be formally introduced by Viviane Reding, the EU’s justice commissioner, next month.
Quotas are controversial, but have generally been successful in increasing the number of female directors in countries where it has been introduced.
The UK government has long been resistant to quotas for women, preferring to encourage female representation at board level through other means such as the recommendations of the Davies Report. There are those that believe that quotas undermine the case for female directors, including Helena Morrisey, Founder of the 30pc Club, who has previously stated that, ‘quotas actually undermine the principle of equality and are patronising to women’.
The UK government has repeated their position that they are opposed to mandatory quotas. However, it is understood that the EU proposal can be passed under the majority voting rules and therefore the UK will not be able to veto it.
It is understood that under the draft proposal,listed companies larger than 250 employees or with more than €50 million in revenues would be required to report annually on the gender make-up of their boards. Those that miss the mandatory quota would be subject to administrative fines or be barred from state aid and contracts.