A European Union debate on proposals that would force female quotas of 40% on company boards across Europe has been postponed amid concerns that they could be unlawful.
The move will give EU Justice commissioner, Viviane Reding, a chance to review her plans, which are opposed by at least 11 of the 27 commissioners, including the UK’s.
In September, business secretary Vince Cable rounded up eight other member states to act as joint signatories on a letter to Reding, which endorsed the principle of having more women in the boardroom, but not the use of EU-wide quotas.
Reding tweeted earlier: “Of course, there will be some opposition. But Europe has a lot to gain from more diverse corporate boards.” She added: “The European Parliament has called for action to get more women into boardrooms. The time to act is now.”
But Audrey Williams, a partner and discrimination law expert at law firm Eversheds, said Reding had now been given an opportunity to review her proposals and "come back with something more palatable for those who were against her original plan. To address concerns that the proposed Directive could be unlawful, that could mean a significant watering down of the sanctions facing companies that don’t reach any target".
Tracey Alper, director of executive recruitment at accountancy recruiter, Marks Sattin, had earlier described Reding’s plans as “admirable but misguided” at a time when female representation was growing “organically”.
“My concern with the imposition of quotas and an extremely short time frame for compliance is that women will be open to nudges and winks and knowing looks from men, hinting at positive discrimination,” she said.
Gender equality
Instead equality had to come from the “bottom up, starting with equal pay”. For example, the fact that female accountants were paid on average a fifth less than men to do the same job sent out “the wrong message for women’s prospects and value,” Alper said.
Helen Wells, director of Business in the Community’s Opportunity Now gender campaign, was equally sceptical. In her view, simply imposing a single quota on different countries and industry sectors that were at different stages in their journey towards gender equality was doomed to failure.
“If the vote is passed, we will be left with a quota that masks the symptoms of gender equality in the workplace, but does not address the root causes,” she warned.
Instead several changes to UK legislation were likely to have more of an impact, Wells believes. These range from extensions to the right to request flexible working (2014), shared parental leave and joint allowances (2015) to reporting on how many women in publicly-listed companies hold senior positions (October 2013).
As part of the proposed amendments to the UK Companies Act, large public companies will be obliged to include the figures in their annual reports alongside numbers relating to the gender makeup of their wider workforce.
“All of these legislative changes are designed to support gender equality in the UK’s workforces, and are a strong indication that this issue is seen as vital to the country’s economy,” Wells said.
However, to deliver on such ambitions, businesses needed to review their talent management and recruitment processes under a “gender lens”. “If they don’t, this chorus call for quotas from the European Commission and others will only grow louder,” she cautioned.
