A European Union proposal that 40 percent of company supervisory boards be made up of women will be amended to ease potential sanctions in an effort to win over EU officials, a person familiar with the matter said.
EU Justice Commissioner Viviane Reding will make minor changes to allow governments more flexibility on penalties against companies that don’t meet the target by 2020, said the person, who declined to be identified because the matter is private. Under the draft rules, companies would also have to explain selection procedures if challenged by unsuccessful candidates who claim they were discriminated against.
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. News of Reding’s amendment was followed by a European Parliament committee opinion yesterday opposing appointment of Luxembourg’s Yves Mersch to the European Central Bank’s Executive Board. The committee said it was unhappy with the lack of female candidates for the job.
Reding’s quota proposal has the support of eight of the 27 European commissioners, including economy commissioner Olli Rehn and antitrust chief Joaquin Almunia, who are to discuss the matter at a commission meeting today, the person said. Seven others are opposed, two of whom won’t attend. It isn’t clear if commissioners will vote on the draft, as such decisions are usually accepted unanimously without a vote, the person said.
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, who declined to comment on the amendment, last year asked businesses to appoint more women to company boards. LVMH Moet Hennessy Louis Vuitton SA 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 will 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. about a lack of female candidates for the job.
Yesterday’s non-binding opinion on Mersch’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.
Two women, Sirkka Haemaelaeinen of Finland and Gertrude Tumpel-Gugerell of Austria, previously sat on the ECB’s six-member Executive Board. If the five men currently there serve their full terms, another position won’t become available until June 2018 when Vice President Vitor Constancio retires.
“We are objecting to the EU’s most powerful institution being run by only men for the next six years,” Sharon Bowles, who chairs the committee, said in an e-mailed statement.