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EU proposes new boardroom gender quota

EU proposes new boardroom gender quota

Companies may face significant employment law changes in the near future as the European Commission attempts to tackle sex discrimination in boardrooms.

Legislation drawn up by EU officials includes plans that would enforce a rule on listed businesses whereby they would have to reserve a minimum of 40 per cent of their non-executive board roles for females by 2020, the Financial Times reports.

This ruling - which is currently still in its draft stage - has been designed to tackle the significant gender imbalance that is still seen in many boardrooms across the continent.

Indeed, the most recent data collated by the EU in January revealed that just 13.7 per cent of all such senior positions in organisations in the 27 member states of the economic bloc are currently fulfilled by women.

Unlike fellow EU member states such as France, Spain, the Netherlands and Italy, Britain does not have a national quota system in place to ensure females are fairly represented in boardroom roles.

And a government official told the news source that while the administration is yet to see the legislation, its stance on quotas will not change.

However, should the proposal be ratified, it can be put in place using the EU's majority voting process, meaning Britain would not be able to veto the law and would have no choice but to adopt it.

Viviane Reding, justice commissioner at the EU, is scheduled to formally introduce the bill next month and the document indicates it will apply to all companies that either have more than 250 employees or annual revenue of €50 million (£39.5 million).

"Progress in the share of women on company boards is very slow, with an average annual increase of just 0.6 percentage points over the past years," it adds.

Should organisations fail to comply with the 40 per cent quota, the EU will have the power to impose fines and sanctions on them.

Contact our employment solicitors on 0800 916 9060 or email enquiries@rjwslatergordon.co.uk if you would like advice on any employment matter

Posted by Trusha Vyas