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40 per cent of seats on company boards for women

Posted by Nick Prag at 20 November 2013, 19:10 CET |

Euro-MPs today gave their assent to a draft EU directive which looks to break the glass ceiling that continues to bar female talent from top positions in Europe's biggest companies.

Under the directive, companies listed on EU stock exchanges would have to bring in transparent recruitment procedures so that by 2020, at least 40% of their non-executive directors are women.

The current glass ceiling means that, in 2013, only 17.6 per cent of non-executive board members of the EU's largest companies were women.

The new hiring rules would apply only to listed companies, and not to small and medium-sized enterprises (SMEs), i.e. those that employ fewer than 250 persons. But MEPs encouraged Member States to support SMEs and give them incentives to improve gender balance on their boards, too.

During their vote, MEPs called on Member States to ensure that listed companies "take effective and binding measures to guarantee equal access for both women and men to non-executive positions on boards" so as to ensure that by 2020, at least 40% of non-executive directors' positions are held by women. Public companies would have to reach the target already by 2018.

While MEPs stress that qualifications and merit must remain the key criteria. where candidates are equally well qualified, priority would be given to the candidate of under-represented sex.

MEPs say penalties such as fines should be imposed, but for failing to follow transparent appointment procedures, rather than failing to achieve the target. They have also proposed that "exclusion from public calls for tenders" should be added to the list of possible penalties, and that these should be made mandatory, rather than indicative, as the Commission has proposed.

The directive now needs to be endorsed by the Council of Ministers. If it is, the initiative would strike a strong blow for non-discrimination and equal opportunities for all in the labour market.

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Nick Prag

Nick Prag

Nick Prag is founder and managing editor of Prior to EUbusiness, he was senior editor at Europe Online SA in Luxembourg, where he played a major part in the launch of Europe Online International.