European Commissioner for Justice Viviane Reding next month plans to submit a proposed directive on introducing mandatory quotas for female representation in top company management. In doing so she is responding to the development to date of voluntary involvement of women in company management, which has only produced minimal results.
In March 2011 Reding called on companies that are quoted on European stock exchanges to sign up for a voluntary commitment to increase the number of women on their board of directors to 30 % by the year 2015 and 40 % by 2020. One year on and it seems that the progress is only minimal. A report published by the European Commission in March 2012 states that women only occupy one senior position out of seven (13.7 %) on the board of directors of the most prominent companies n Europe. This figure was 11.8 % in 2010. “At this rate, it will take more than 40 years for us to achieve a considerably more balanced representation of women and men (at least 40 % for both sexes)," says the report. There followed a three-month period of public consultation, which Reding is now building on with her legislative proposal.
The proposal that Reding has initiated counts on the fact that companies with more than 250 employees or revenues in excess of EUR 50 million will have to submit an annual report on the gender make-up of their board of directors. If they do not have 40 % of women on their board of directors, they will be faced with penalties and other sanctions, such as loss of entitlement to any state aid or participation on state contracts.
If the proposal is approved, all 27 Member States will have to introduce the mandatory quotas in their national legislation by 1.1.2020 at the latest. Certain States of the EU - specifically Belgium, France, Italy, the Netherlands and Spain - have already introduced the quotas for companies within their territory. Meanwhile, Denmark, Finland, Greece, Austria and Slovenia all have mandatory quotas for female representation in the management of state enterprises. By contrast, Britain and Sweden are strongly opposed to mandatory quotas.
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