EU urged to quickly adopt plan boosting gender equality on boards, as talks continue

The EU institutions are negotiating a proposal to boost the number of women on company boards. [Shutterstock/fizkes]

EU lawmakers are working to strengthen the European Commission’s proposal to ensure that women fill 40% of non-executive board seats of listed companies, while campaigners call for a swift adoption of the text before the end of the French presidency of the EU Council.

The proposal is currently under discussion with the European Parliament, trying to agree on a common legislative text with the EU Council representing EU member state governments.

“The trilogues have been constructive, but we’re not there yet,” MEP rapporteur Lara Wolters said during a meeting of the Legal Affairs Committee on Thursday (2 June).

While most countries agreed on a directive and targets to boost the number of women on boards, “the majority is not extremely broad,” Wolters explained.

Among EU member states, a common position on the compromise text was reached in March, 10 years after the Commission first presented the proposal.

Most member states agreed to the text, while only Poland and Sweden strongly opposed the directive, with the latter opposing introducing regulations on diversity, according to Hedwige Nuyens, chair of European Women on Boards (EWOB).

Member states end 10-year deadlock on EU’s plan for women’s quota on corporate boards

EU employment and social affairs ministers have adopted a general approach on the directive to boost gender equality on corporate boards, ending a decade-long stalemate and paving the way for final negotiations between the European Parliament and the 27 member states in the Council.

The Parliament is now working to improve the proposal, Wolters said.

“There are a number of loopholes in the text,” she said, adding that the Parliament has tried to “tighten up grey areas,” looking at possible exclusions for member states who already have quota requirements.

The proposal

The proposal asks companies to put in place measures to boost the number of female non-executive directors on corporate boards who act as independent advisors and are not responsible for the company’s daily operations.

EU countries would need to achieve either a 40% target of non-executive directors held by members of the under-represented sex or 33% for all board members by 2027.

Only 30.6% of board members and 8.5% of board chairs in the EU are women, according to estimates by the European Institute for Gender Equality (EIGE).

Under the new law, member states will also need to ensure that companies prioritise the least represented sex when choosing between equally qualified candidates.

While most of the proposal has been agreed upon, inter-institutional negotiations continue regarding the implementation and compliance date, as the directive was first proposed ten years ago.

MEPs and activists are also pushing for penalties and sanctions if the targets are not respected, rapporteur Evelyn Regner told EURACTIV.

Companies, however, do not fully agree with the proposal.

Business Europe, an organisation representing companies, questions the effectiveness of quota laws in boosting female representation in corporate positions and points to social, cultural and educational reasons for the limited number of women in leadership positions.

Moreover, it criticises EU level quota laws as member states have different procedures for nominating board members and calls for more flexibility for countries.

Swift adoption

According to Regner, all the three institutions are “fully committed” to moving forward with the directive, but activists are increasingly calling on negotiators to reach an agreement soon.

“We strongly hope that the final text will be adopted by the end of the French presidency,” said Jéromine Andolfatto from the non-profit organisation European Women’s Lobby, calling for a “swift adoption” of the directive.

Nuyens also underlined the urgency of reaching a deal and said, “the agreement needs to be sealed in the coming days.”

In her view, reaching a deal before the end of June is “very important” as the French presidency of the EU Council, which has played a crucial role in unblocking the directive, will come to an end at the end of June.

“Momentum is now with the French presidency determined to get this done,” she said.

The next negotiation round is expected for 7 June.

[Edited by János Ammann/ Alice Taylor]

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