The women-on-boards Directive in the Council

(16.12.2014) On December 11th, 2014, the Council discussed the women on company boards Directive proposal. According to the official press release “It was not able to reach a general approach”.

More than two years ago, on November 14th, 2012, the European Commission has proposed the Directive on improving the gender balance among directors of companies listed on stock exchanges and related measures (COM(2012) 614). It addresses the serious problem of women’s under-representation in economic decision-making positions, setting a goal of a 40 percent threshold of women among non-executive directors/ Supervisory Board members by 2020 for private listed companies.

Last year, on November 20th, 2013, the proposal passed through the first reading in the European Parliament. The next step for the Directive would be the adoption by the Council in a first reading (Art. 294 para. 5 TFEU). However, the voting process in the Council will take some time, as the Council most probably will not agree with the first reading of the Parliament. The EU Member States have different conflicting views regarding the Directive proposal. Some Member States criticize the proposal for not complying with the principle of subsidiarity.

In an attempt to reach a compromise between the Member States the Italian Council presidency has introduced a broad flexibility clause (article 4b) and extended the deadlines for implementation and reporting (articles 5, 8 and 9).

While Latvia has expressed only linguistic scrutiny reservations, the delegation of Luxembourg supported the draft in the Council. There is hope that there will be further achievements, when these two Member States take over the presidency of the Council in 2015.

In May 2014, the German Women Lawyers Association (djb) published an advisory opinion on the women-on-board Directive, which you can find here. The djb considers the proposal “wise and deserving support, even if introducing mandatory legal quotas with sanctions in all EU Member States would have been better. Moreover, the djb asks Member States and companies to promote the professional development of women at all levels of management and not to seek legal hideaways in order to circumvent the objectives of the Directive. Furthermore, the Directive should stipulate active measures among all actors and ultimately increase the share of the under-represented sex among Managing Directors/Supervisory Board members. This will also have a spillover effect on (listed and non-listed) small and medium-sized enterprises (SMEs).”