The European Commission postponed a vote on a plan to force companies to allot 40% of their board seats to women by 2020 as lawyers questioned its legality under EU rules.
Justice Commissioner Viviane Reding had planned to launch the initiative in Strasbourg on Tuesday (23 October) to tackle gender inequality on company boards but in a last-minute decision her Commission peers decided to delay their vote for a month.
A source in the EU executive said commissioners were jittery about approving the plan after lawyers cast doubt over its lawfulness. The official said the draft was being revised right up until the aborted vote.
"Many were surprised not to receive a draft proposal that could be described as lawful according to our own legal service," the source said.
Reding would need a simple majority of the 27 commissioners to have the plan approved. Then it would go to the European Parliament for amendments before it could be implemented.
An early draft of the plan would have obliged companies to reach a 40% female boardroom quota by 2020 or face sanctions. The plan was deeply unpopular with many EU countries.
Britain has been the plan's most outspoken critic, with Business Secretary Vince Cable arguing London's current voluntary approach was effective.
Many argue quotas are damaging rather than beneficial to women's rights because women would not be hired on their merit but as part of a box-ticking exercise.
The EU's legal service said countries cannot be obliged to reach the 40% female quota, although they could do more to address gender bias on boards.
But Reding has argued quotas are necessary.
Figures released by Reding’s office say 86.5% of board members and 97.5% of board chairs in the EU are men. In September 2010, the Commission adopted a Gender Equality Strategy aimed at boosting gender diversity in corporations.
Some of the strongest opposition within the 27-member EU executive has come from some of the nine female commissioners. Catherine Ashton, in charge of foreign policy, and Connie Hedegaard, the Climate Action boss, have opposed quotas.
Five of the commission's nine female commissioners are against the proposal, a commission official said, while several of the male commissioners, including Finland's Olli Rehn and Michel Barnier of France, are in favour.
Despite the difficulties Reding's proposal faces, the gender debate has been high on the agenda of other EU institutions.
Members of the European Parliament economics committee on Monday rejected the appointment of Luxembourg's Yves Mersch to the European Central Bank Executive Board, because no women had been considered for the post. While Mersch is still expected to get the job, some members of the parliament believe their stand has put the issue under the spotlight.
“We understand that a number of fellow Commissioners are blocking Reding’s proposal,” said Leanda E. Barrington-Leach, spokesperson for the European Women's Lobby in Brussels. “In doing so they are undermining the credibility of the European Commission as guardian of the Treaties. The EU clearly has competence in this field. We recall that it is indeed the duty of the EU to promote equality between women and men. Already, the previous draft texts were excessively weak, applying only to non-executive positions on boards of the largest publicly-quoted companies, and leaving the question of sanctions up to the discretion of the member states. How much weaker can it possibly get?”
British Conservative MEP Marina Yannakoudakis, who has campaigned vigorously against the quota scheme, said in a statement: "This interfering piece of window-dressing would have hampered business and done women a disservice, because it would fail to tackle the root causes of the under-representation of women in top jobs."
Hungarian MEP Zita Gurmai, president of the Party of European Socialists Women, said: “Reding’s big mistake was making a personal crusade out of such a weak proposal. Her inability to prioritise the success of the policy over personal political ambition will have serious consequences. The failure of this proposal represents a major setback for all women who have the skills and desire to make a hugely positive impact on European corporate culture”.