The European Parliament has voted with an overwhelming majority (459 for, 148 against and 81 abstentions) to back the European Commission’s proposed law to improve the gender balance in Europe’s company boardrooms.
The strong endorsement by the Members of the European Parliament means the Commission’s proposal has now been approved by one of the European Union’s two co-legislators. Member States in the Council now need to reach agreement on the draft law, amongst themselves and with the European Parliament, in order for it to enter the EU statute book.
The most important points of the European Parliament’s vote, building on the main pillars of the Commission’s proposals, include:
- Confirming the Commission’s approach to focus on a transparent and fair selection procedure (a so-called “procedural quota”) rather than introducing a fixed quantitative quota.
- Small and medium-sized enterprises remain excluded from the scope of the directive but Member States are invited to support and incentivise them to significantly improve the gender balance at all levels of management and on boards.
- Departing from the Commission’s original proposal, there will be no possibility for Member States to exempt companies from the law where members of the underrepresented sex make up less than 10% of the workforce.
- The Parliament strengthened the provision on sanctions by adding a number of sanctions that should be obligatory, rather than indicative, as the Commission had proposed. Under the Parliament’s text, sanctions for failure to respect the provisions concerning selection procedures for board members should include exclusion from public procurement and partial exclusion from the award of funding from the European structural funds.
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