After almost ten years, on Monday 14 March Member States agreed their negotiating position with the European Parliament on the directive on gender equality in company boards at the Employment and Social Policy Council (EPSCO).
“Finally, we can move forward. The business case for having more women in leadership is clear. Diversity is not only a matter of fairness. It also drives growth and innovation”, European Commission President Ursula von der Leyen said on Twitter.
According to the political agreement (‘general approach’) agreed by the ministers, by 2027 companies should reach a minimum target of either having 40% of non-executive director positions held by members of the under-represented sex, or 33% if all members of their board are included. If these objectives are not met, a company would be required to appointment or elect directors using criteria that are “clear, unambiguous and neutrally formulated”.
Exemptions have been introduced. Countries that have already put in place measures to achieve a more balanced representation of women and men can suspend the requirements of the directive in relation to the appointment or election of board members. This also applies if Member States have already made progress towards the objectives set out in the directive.
In its general approach, the Council also made clear that it was up to each Member State (rather than companies) to choose between the two proposed targets, i.e. 40% for non-executive directors or 33% for all board members.
The agreement being reached is “an important step”, according to the French Minister of Labour, Elisabeth Borne, who said she wanted to start negotiations with the European Parliament soon.
The European Parliament’s long-held position has been in place since 2013 (see EUROPE 12575/19), a source reminded us, but it needs to confirm its position in plenary in order to start interinstitutional negotiations.
Sweden and Poland have taken position against the agreement. Estonia, Slovakia and Hungary abstained.
Some believe that the change of government in Germany has helped to break the deadlock in the EU Council. It is ironic that it has taken Angela Merkel’s departure from the chancellery to move this issue forward, commented another source. It was also the change of chancellorship in Germany that enabled the Council to quickly adopt a position on the minimum wage directive (see EUROPE 12847/1).
Although progress has been made, there is still a long way to go to achieve gender equality on the boards of European companies. In October 2021, only 30.6% of board members and only 8.5% of board chairs were women. (Original version in French by Pascal Hansens)