EU Directive to introduce Gender Quotas for the Board Room by 2020

In 2011, 85% of all non-executive board member positions in corporations were held by men and in financial institutions women only made up 9% of the top management positions.  It is with these statistics in mind that the EU Commission has announced its intention to introduce a Directive which according to Vivianne Reding, Vice President Member of the Commission responsible for Justice, Fundamental Rights and Citizenship, “will smash the glass ceiling that blocks progress up the career ladder for many women.”  The proposed Directive sets a Gender Quota of 40% of all non-executive board positions in large publicly listed companies to be filled by women by 2020.

In an effort to allay Member states fears of this positive discrimination resulting in less qualified women receiving such positions over more qualified men Vice President Reding has given a number of assurances. Firstly the Directive will not apply to Small or Medium sized businesses but rather only  to large publicly listed companies which the Commission hopes will serve as an example to other smaller companies. The purpose of the Directive is to ensure that appointment to such positions is based on objective and gender neutral criteria and with positive discrimination coming into play when two candidates are equally qualified for a position. In such circumstances  the Company will be required to choose the candidate of the underrepresented gender

Vice President Reding also stated that Executive boards must set themselves a flexi quota and Companies must set themselves a target for gender balance by 2020 and produce annual reports on its progress which will be monitored by the Commission.

Companies who do not fulfil the quota will escape penalty if they can demonstrate that the male candidates were objectively more qualified for the board position.

Regardless of the support received for the proposal in some quarters its implementation will arguably not be without controversy.  Even before a written proposal for the Directive had been drafted the Commission received written opposition from nine Member States opposing the European quota for women.   Nonetheless the plans to introduce the Directive appear to be going ahead and its implementation will no doubt  involve a substantial shake-up of management of corporations across Europe.


For more information about this or other matters pertaining to Corporate Governance, please contact Fagan Bergin Solicitors at

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