The European Commission has today published a draft directive on “improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures”. The headline proposal is the setting of an objective for a 40% presence of women among non-executive directors of companies listed on EU regulated markets, to be met by 2020.
This is a target, not a mandatory quota. The directive does encourage an element of positive discrimination in favour of appointing women if all other criteria for the position are met equally by candidates; see the extract from the directive below.
The Commission’s press release is here. The Justice Commission’s press release is here. A set of Q&As on the proposed directive is here. The draft directive is here.
From the draft directive:
“Article 4
Objectives with regard to non-executive directors
1. Member States shall ensure that listed companies in whose boards members of the under-represented sex hold less than 40 per cent of the non-executive director positions make the appointments to those positions on the basis of a comparative analysis of the qualifications of each candidate, by applying pre-established, clear, neutrally formulated and unambiguous criteria, in order to attain the said percentage at the latest by 1 January 2020 or at the latest by 1 January 2018 in case of listed companies which are public undertakings.
2. The number of non-executive director positions necessary to meet the objective laid down in paragraph 1 shall be the number closest to the proportion of 40 per cent, but not exceeding 49 per cent.
3. In order to attain the objective laid down in paragraph 1, Member States shall ensure that, in the selection of non-executive directors, priority shall be given to the candidate of the under-represented sex if that candidate is equally qualified as a candidate of the other sex in terms of suitability, competence and professional performance, unless an objective assessment taking account of all criteria specific to the individual candidates tilts the balance in favour of the candidate of the other sex.”
The Commission’s proposal now passes to the Parliament and Counsel under the normal legislative procedure.
Much more on women on boards here.
