EU wants 40% women in boardrooms

(BRUSSELS) - Europe needs a gender revolution in its biggest boardrooms to make better use of female business talent now going to waste, the European Union's executive said Wednesday.

The EU's justice commissioner Viviane Reding said the aim was to have a binding 40-percent quota for women on the boards of listed companies by 2020, and earlier, by 2018, for state-owned firms "because they should lead by example".

Small companies employing less than 250 staff will be exempt.

"The European Union has been successfully promoting gender equality for over 50 years. However there is one place where we have not seen any progress: company boardrooms," the commissioner told a news conference.

Reding, who had to fight hard even within the European Commission to push the proposal, said that after decades of empty promises, it was time for affirmative action as women represented a mere 14 percent of board members in European firms.

"A shocking waste of talent when you think that 60 percent of university graduates are female," Reding told a news conference.

Europe's business schools will next month release a database of 7,500 "board-ready" women, she said, proving there are enough qualified women graduates to merit boardroom posts.

Under the Commission proposal, which will need to be endorsed by the European parliament and the 27 EU states, if a major listed company fails to meet the 40 percent quota, it will have to ensure jobs are filled with qualified women.

Sanctions will be in the hands of member states but "must be effective, proportionate and dissuasive", the proposal says.

It suggests either slapping fines against offenders or cancelling appointments in breach of the rule.

Reding said a stronger ratio of women would even help business as various studies showed that companies with a higher share of women at top levels delivered stronger organisational and financial performances.

The proposal follows a row within the European institutions over the appointment of another man to the all-male executive board of the European Central Bank.

Though there were no women candidates for the job, the nomination of Luxembourg's Yves Mersch to the six-seat board has been snagged in the dispute, with a decision expected at a summit in Brussels next week.

Likewise Reding's initial proposal to carve a quota in stone triggered criticism even within the EU executive, with nine EU member states joining forces to September to demand that gender balance be enforced by national governments, not Brussels.

Reacting to Wednesday's proposal, Britain welcomed "the Commission's decision not to impose mandatory quotas for women on boards."

"We remain fully committed to increasing women's representation in UK boardrooms, but along with like-minded Member States, we have consistently argued that measures are best considered at national level," a government spokesman said.

Proposal on increasing Gender Equality 
in the Boardrooms of 
Listed Companies - guide