News Column

EU Proceeds With Female Business Quotas Amid Fierce Opposition

Nov 14, 2012

Alexandra Mayer-Hohdahl and Helen Maguire

Angela Merkel

The European Union's executive on Wednesday overcame internal opposition to push forward with a proposal on female quotas for boardrooms - only to be met with a hail of criticism from the bloc's most influential member state.

German Chancellor Angela Merkel is convinced that "this should be managed on the national level," spokesman Steffen Seibert said in Berlin.

"This kind of over-regulation weakens Europe," German Foreign Minister Guido Westerwelle added in the Rheinische Post daily. "This over-regulation and non-observance of the subsidiary principle is one of the reasons why Europe is losing approval from its citizens."

But the European Commission insists that binding rules are needed because not enough is being done willingly.

"After decades of empty promises and failed attempts for self-regulation, we still have an 85-percent male quota on the supervisory boards of Europe's largest companies," EU Justice Commissioner Viviane Reding told reporters in Brussels.

At her side stood one of the EU's most powerful officials, Economy Commissioner Olli Rehn.

"This is a very important, very significant breakthrough proposal," he said. "In these economically challenging times, we should indeed turn every stone to make full use of our talents ... Gender balance is not a burden, but an asset."

The commission wants to require large, stock exchange-listed companies to ensure that 40 per cent of their non-executive board members are women. It estimates that 5,000 companies would be affected in the 27-member EU.

Its proposal requires member states to set "effective and dissuasive sanctions" for companies that have not achieved the 40-per-cent goal, but do not pick female candidates over equally qualified male applicants.

"It is not about women just getting a job on a board because they are female ... It is for women to have an equal chance to men because they are qualified," Reding said, arguing that a "glass ceiling" preventing them from attaining top jobs does still exist.

EU countries would be able to choose what sanctions they want to apply; the commission suggested fines or the reversals of male appointments as possible options. Member states that do not comply could be dragged before the European Court of Justice.

The goal is to reach 40 per cent by 2020 - with the bar set higher for state-owned companies, which have an objective of 2018. But the dates are not binding under the commission proposal.

Reding would like to see the proposal transposed into national EU laws by 2016, but it has to first be approved by member states and the European Parliament.

Eleven countries in the EU already have laws in place to ensure gender equality on company boards. But the percentage of female board members varies greatly across the bloc, from 2.7 percent of non-executive posts in Malta, to almost 28 percent in Finland.

Non-EU member Norway is routinely hailed as a role model when it comes to female quotas, with its ratio of women serving on boards in the largest publicly listed companies at more than 40 percent.

But Germany is not alone in opposing the measure. Britain in September had hosted a meeting with representatives from 10 countries in a bid to block the proposal.

Reding also had to overcome reluctance within the 27-member college of EU commissioners, after her first quota bid failed three weeks ago.

The proposal comes at a time of fierce debate in the EU on female representation in both the public and private sector. The issue has complicated the appointment of European Central Bank board nominee Yves Mersch, with EU lawmakers insisting a woman should be chosen.

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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