European proposals to increase number of women on boards; impact for Dutch companies

The European Commission has announced its proposals for improving gender balance in Europe’s board rooms, with a target of 40% of non-executives by 2020.

Responding to resistance from Member States, the Commission has abandoned plans to introduce a mandatory quota. Instead, a draft Directive has been published which will set an objective for listed companies to achieve 40% representation of “the under-represented sex” amongst non-executive directors by 2020. This is not a quota as such. Companies that don’t meet the target just need to ensure their recruitment processes are transparent and unbiased, and give preference to equally qualified female candidates. If they fail to meet the target by 2020 notwithstanding such processes, they must provide an explanation. Companies are also required to set a voluntary target for the number of executive directors.

The Dutch Government has welcomed the fact that the Commission has not sought to impose mandatory quotas and Dutch companies are likely to feel the same way.

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