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EP demands 40% of women on boards

Wednesday 6 July 2011 – by Andrew Hickley

Businesses should have mandatory quotas requiring 40 per cent of their top managers to be women, according to the European Parliament.

If voluntary measures to improve female representation fail to work by 2012 then the European Commission must make this requirement legislatively binding, MEPs declared on Wednesday in Strasbourg.

A proposal that women should make up 30 per cent of executive positions by 2015 and 40 per cent by 2020 was overwhelmingly endorsed during a plenary session.

Currently women make up 10 per cent of directors and 3 per cent of chief executive officers in the EU’s largest companies, with the number of women on corporate boards only increasing by around half a percentage point per year.

While the proposal is non-binding, it is likely to add pressure to enforce a quota system.

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It follows the commission launching a consultation in April mooting the idea of mandatory gender requirements on company boards, though it did not go as far as proposing any target figures.

“Europe cannot afford to leave talent untapped! Empowering the role of women on management boards of companies is not only about ethics and equality, it is also essential for economic growth and a competitive internal market,” said the EP’s vice-president Rodi Kratsa-Tsagaropoulou, who drafted the resolution.

“With the adoption of the report on Women and Business Leadership, the European Parliament has sent a strong message to governments, social partners and enterprises in Europe.”

The report, which was approved with 539 votes in favour, 109 rejections and 29 abstentions, quoted studies that have found companies with a higher percentage of women tend to perform better commercially and financially. The parliament did however stress that recruitment for positions in corporate management bodies should be based on skills, qualifications and experience.

It recommends that the commission and member states implement new policies to develop women’s individual capabilities in-house through schemes such as training courses, mentoring and networking.

However the resolution could ruffle feathers in the UK, where a recent consultation decided against imposing gender quotas onto company boards.

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