EU lawmakers back watered-down rules to help women into top jobs

Rules fall short of original plan for mandatory quota
By John O'Donnell
|hrreporter.com|Last Updated: 11/21/2013

BRUSSELS (Reuters) — European Union lawmakers have backed rules that would give women preference for non-executive posts at companies, after plans for a mandatory quota to get women into top jobs were scrapped.

The rules demand that companies give non-executive directorships to women, where there is no male candidate who is better qualified, until they reach a target of four in ten.

"The Parliament has made the first cracks in the glass ceiling that continues to bar female talent from the top jobs," said EU Justice Commissioner Viviane Reding, who launched the proposal.

Although the draft law envisages possible fines for firms that ignore the selection rules, it has been softened from imposing a quota with a penalty for not reaching it.

Nor do the rules help women aiming for top management roles, such as chief executive. They also exempt smaller companies and those that are not listed.

Only about 17 per cent of non-executive board members in the EU's largest companies are women. In Britain, women hold 17.4 per cent of directorships, up from 12.5 per cent in 2010, while only four CEOs at FTSE 100 companies are women.

If endorsed, the rules will take seven years to come into full force and countries, which are now required to sign off on the law, are divided on whether pan-European rules on positive discrimination are necessary.

Britain and Germany have argued against mandatory quotas.

Men dominate boardrooms in the region and many women who have risen through company ranks resent quotas because they suggest that women have not been promoted on merit.

Only Norway, which is not a member of the bloc, has enforced a 40 per cent quota since 2009, although critics say this has been achieved in part thanks to a small number of women holding non-executive positions in multiple companies.

"It is essential for listed companies to evolve so as to include highly skilled women in their decision-making processes," said Rodi Kratsa-Tsagaropoulou, a member of the parliament who is playing a central role in shaping the law.

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