By the year 2020, all listed companies in the EU must have at least 40% of non-executive director board seats reserved for or taken by women, reveals company secretarial services provider and corporate support specialists London Registrars (http://www.london-registrars.co.uk/).
The Financial Times reports that the European Commission is currently drafting a proposal which will impose a 40% gender quota on EU listed companies. The European Commission believes that there is a severe gender imbalance in the Member States. EU statistics show that just 13.7% of director board seats in large listed companies are currently taken by women.
Some EU countries such as France, Italy and Spain are not likely to take issue with the quota having already implemented their own national quotas. However, countries such as Britain and Sweden, with no current quotas, may well object. Indeed, the Financial Times quoted an official in the UK government’s business department as saying, “Our position will still stand – we are opposed to legislation for quotas”. With recent figures revealing that the number of women sitting on the boards of the UK’s top companies had reached unprecedented levels (women making up 16.7% of FTSE 100, and 10.9% of FTSE 250 boards), the UK government does not believe that imposed quotas are necessary. However, the EU’s complicated majority voting process will make it impossible for any individual country to avoid the quota once the legislation is passed.
Company compliance with the proposed 40% gender quota will involve any listed company with over 250 employees or more than €50 million in revenues having to report on the gender make-up of their boards on a regular basis. Those that do not meet the imposed quota will be fined or even barred from state aid and contracts.
London Registrars regularly advises on board issues such as this as part of their corporate governance and wider corporate support services. To discover more, visit the website at http://www.london-registrars.co.uk/.