EU Said to Loosen Female Board Rule in Bid For Support
European Union plans to set a 40 percent quota for women on company supervisory boards by 2020 stalled after EU commissioners failed to agree on the measures at a meeting today.
The European Commission’s legal service warned that a binding quota for women may be illegal ahead of the meeting, according to a person familiar with the talks. Lawyers said EU regulators don’t have the right to mandate binding targets for results obtained by companies, said the person who asked not to be identified because the process is private. EU rules can require companies to make efforts toward a target.
EU commissioners postponed discussion of EU Justice Commissioner Viviane Reding’s plan until Nov. 14. Reding said she has “strong support” from other commissioners and drafted a compromise in line with lawyers’ guidelines to win consensus from her colleagues. She declined to give details, beyond saying she would retain the 40 percent target.
“It took centuries to get gender equality on the map,” Reding told reporters. “Therefore, boardrooms can wait for three more weeks. I will not give up.”
U.K. business secretary Vince Cable and ministers from nine other countries wrote the European Commission last month seeking more time for national efforts aimed at encouraging female appointments to take effect. The lack of female candidates for a seat on the European Central Bank’s Executive Board saw a European Parliament committee yesterday oppose the appointment of Luxembourg’s Yves Mersch.
Reding’s proposal had the support of eight of the 27 European commissioners, including economy commissioner Olli Rehn and antitrust chief Joaquin Almunia, ahead of today’s meeting, according to another person familiar with the situation. Seven others are opposed, said the person yesterday, who declined to be identified because the matter is private.
Some 13.7 percent of corporate board seats in the EU are held by women, following a 1.9 percent increase between October 2010 and January 2012, the commission said in a report in March.
Reding last year asked businesses to appoint more women to company boards. LVMH Moet Hennessy Louis Vuitton SA (MC) is among 24 companies that signed her pledge to increase female board members to 30 percent by 2015, and 40 percent by 2020.
The EU draft law would apply to all listed companies with more than 250 employees and annual sales of more than 50 million euros ($65 million). Reding earlier suggested there be sanctions against companies that couldn’t reach the target, including fines, exclusion from government tenders and a ban on public subsidies, the person said.
Spain has a 40 percent target for female representation on large company boards by 2015, and France passed a law last year to impose a 20 percent quota by 2014, and 40 percent by 2017, for companies with at least 500 employees and annual sales of 50 million euros.
Norway, which isn’t part of the EU, set a quota in 2003 for at least 40 percent of corporate board seats to be filled by women.
If accepted by the commission, the proposal would need the backing of most of the EU’s 27 member states and the European Parliament, which can amend a draft law before it becomes final.
Yesterday’s non-binding opinion onMersch’s appointment was by the European Parliament’s economic and monetary affairs committee in Strasbourg, France. The recommendation on Mersch, Luxembourg’s central bank governor, goes to the full Parliament for a vote Oct. 25.
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