European Parliament approves gender quotas for board rooms

European Parliament approves gender quotas for board rooms
Photo: Benjamin Child - Unsplash

The European Parliament has given its approval to the Women on Boards Directive, a law that will implement quotas to achieve greater gender balance on corporate boards across the EU. 

EURACTIV reports that the law was first proposed ten years ago by the European Commission and is focused on publicly traded companies. It enforces quotas on the percentage of board seats filled by the “underrepresented sex”, with 40% for only non-executive seats or 33% for both non-executive and executive board positions. 

Supporters of the legislation have emphasised that it will help to strengthen European economies by, in the words of co-rapporteur Evelyn Regner, “we can only have strong companies if women are on boards and are leading the way. We need to use all of their expertise”. Co-rapporteur Lara Wolters, of the Social Democratic group, pointed to the long-term benefit of the legislation for not just women working in business now, but also in the future. 

However, there is significant opposition to the regulatory approach that the bill represents. Several countries, including Sweden, Slovakia, Hungary, and Estonia, have stated that the issue of gender balance on company boards should be a matter for national governments to rule on rather than the EU. 

To these criticisms, the EU Commissioner for equality, Helena Dalli, has responded by saying that based on recent data “progress made by voluntary initiatives was much slower and less sustainable.” She then added that “When self-regulation does not bring the desired effect, EU regulatory action is necessary,”. 

One other criticism that has come from both sides of the political spectrum is whether it makes sense to focus on gender alone when it comes to diversity quotas. Greens MEP Pierrette Herzberger-Fofana has argued that ethnicity and other factors ought to be included in the directive.

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