European companies may be required to appoint women to 40 percent of seats on supervisory boards by 2020 under a European Union proposal to be published next month, according to a person familiar with the plan.

Companies would face sanctions including fines, exclusion from government tenders and a ban on public subsidies, if they fail to comply, said the person who asked not to be identified because the plan isn't yet public. The sanctions, which would also allow authorities to revoke other board appointments, would be set by national governments.

The EU draft law to redress the gender imbalance would apply to all listed companies with more than 250 employees and annual sales of more than 50 million euros ($63 million), the person said. State-owned companies would be required to introduce the quotas by 2018 to set an example for other firms.