This week, the European Commission unveiled its proposal for
an EU directive on gender balance on corporate boards. Gender balance means that women must constitute at least 40 percent, and not more than 60 percent, of the board to which the requirement applies. Over
the last few years, there has been a robust debate about the importance of
women’s participation in economic decisionmaking, catalyzed in part by Norway’s
success in requiring gender balance on the corporate boards of its publicly
traded companies. Supporters of
measures to achieve gender balance have focused on the importance of gender
equality to the good governance of well-functioning legitimate institutions,
including corporations. Studies
cited by the Commission in its proposal claim that women’s participation in leadership
improves companies’ economic performance and growth.
Several
member states have passed legislation imposing gender quotas on corporate
boards in the last several years (Spain, Italy, Belgium, the Netherlands, and
France), or are in the process of doing so (Germany). However, some of these countries
have joined the UK in opposing EU action in this field. The sticking point is sanctions: The recently adopted gender quotas laws
in various jurisdictions impose a range of sanctions for boards that fail to comply. None of the EU member
states have followed the Norwegian model of dissolving companies by court order
should they fail to reach gender parity. In
France, the law provides for the invalidation of any nomination of a board
director if appointing the candidate would cause the board to exceed 60 percent
of one gender.