EC clears plan for 40% female non-exec directors
Plan needs to be ratified by EU member states
By CFOWorld.co.uk staff | CIO UK | Published 12:06, 14 November 12
The European Commission (EC) has cleared proposals aimed at having at least 40 percent of women non-executive directors on the boards of listed companies in the common market by 2020, a spokesperson told CFOWorld on Wednesday.
The proposal, considered a brainchild of EC Justice Commissioner Viviane Reding, will not apply to any company within the common market which employs less than 250 people, or to companies whose shares are not traded on a stock exchange recognised within the European Union.
Commissioner Reding delayed the launch of the policy in October, after the EC legal team said such a quota might not be enforceable. While legal hurdles persist, the EC spokesperson described the plan as a step in the right direction and “groundbreaking.”
However, she added a caveat that the plans needed to be approved by the European Parliament and the Council of Ministers. Pending approval, the enforcement would not be via the EC.
Rather, member states such as the UK, should they approve, would then have to incorporate the directive into domestic employment laws. They would then have to employ their own sanctions and penalties for companies which do not fall into line by 2020.
There has been opposition to the proposals from many member states, including the UK. In response the EC’s move, UK business secretary Vince Cable said, “The UK welcomes the Commission's decision not to impose mandatory quotas for women on boards.”
"We remain fully committed to increasing women's representation in UK boardrooms, but along with like-minded member states, we have consistently argued that measures are best considered at national level," he concluded.
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