April2013

Main amendments proposed

Amendment 1
Name of the Directive
Text proposed by the Commission
Directive on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures / EWL Amended text
Directive on equal representation of womenand men amongexecutive and non-executive/supervisory board membersof companies with more than 50 employees and all state-owned companies and related measures
Justification
The Directive should also apply to non-executive directors. Therefore, Executive and non-executive/supervisory board members should be covered as in several EU member states.For example in Austria, Germany or Netherlands both are existing , as to guarantee equal representation of women and men on all exiting boards.
Amendment 2
Article 1
Subject Matter
Text proposed by the Commission
This Directive lays down measures to ensure a more balanced representation of men and women among the non-executive directors of listed companies by establishing measures aimed at accelerated progress towards gender balance while allowing companies sufficient time to make the necessary arrangements. / EWL Amended text
This Directive lays down measures to ensure theequal representation of men and women among executive and non-executive/supervisory board members of companies with more than 50 employees and all state-owned companies by establishingeffective measures aimed at accelerated progress towards an equal representation of women and men, while allowing companies sufficient time to make the necessary arrangements.
Justification
The first Article of the proposal must be formulated so as to go beyond a more balanced representation of women and men, but to ensure the equal representation of women and men on corporate boards. As stated in the Amendment 1 of the European Women’s Lobby, Article should also refer to executive directors. Measures have to be effective as to guarantee that the equal representation of women and men on corporate boards are met in the given time framework of the proposal, namely until 2020.
Amendment 3
Article 3
Exclusion of small and medium-sized enterprises
Text proposed by the Commission
This Directive shall not apply to small and medium-sized enterprises ('SMEs'). / EWL Amended text
This Directive shall not apply to enterprises that have less than 50 employees.
Justification
This Directive should apply to companies with more than 50 employees and all state-owned companies as is provided by current quota legislationin Belgium. In order to take into account the constraint of companies and to allow for the introduction of accompanying measures this directive should allow for gradual implementation referring small and medium sized enterprises as is the case in Belgium. The interesting aspect of the Belgian law is that the transition period is adjusted to the needs of different types of companies. Government enterprises must comply immediately – every new director to be nominated must be a woman until the 30% target is reached. The transition period for large quoted companies is five years and seven years for small and medium-sized listed companies. Therefore, for small and medium sized companies one can give different transition periods as foreseen in Belgium.
Amendment 4
Article 4
Objectives
Text proposed by the Commission
Article 4 Objectives with regard to non-executive directors
1.Member States shall ensure that listed companies in whose boards members of the under-represented sex hold less than 40 per cent of the non-executive director positions make the appointments to those positions on the basis of a comparative analysis of the qualifications of each candidate, by applying pre-established, clear, neutrally formulated and unambiguous criteria, in order to attain the said percentage at the latest by 1 January 2020 or at the latest by 1 January 2018 in case of listed companies which are public undertakings.
2.The number of non-executive director positions necessary to meet the objective laid down in paragraph 1 shall be the number closest to the proportion of 40 per cent, but not exceeding 49 per cent.
3.In order to attain the objective laid down in paragraph 1, Member States shall ensure that, in the selection of non-executive directors, priority shall be given to the candidate of the under-represented sex if that candidate is equally qualified as a candidate of the other sex in terms of suitability, competence and professional performance, unless an objective assessment taking account of all criteria specific to the individual candidates tilts the balance in favour of the candidate of the other sex.
4.Member States shall ensure that listed companies are obliged to disclose, on the request of an unsuccessful candidate, the qualification criteria upon which the selection was based, the objective comparative assessment of those criteria and, where relevant, the considerations tilting the balance in favour of a candidate of the other sex.
5.Member States shall take the necessary measures, in accordance with their national judicial systems, to ensure that where an unsuccessful candidate of the under-represented sex establishes facts from which it may be presumed that that candidate was equally qualified as the appointed candidate of the other sex, it shall be for the listed company to prove that there has been no breach of the rule laid down in paragraph 3.
6.Member States may provide that listed companies where the members of the under-represented sex represent less than 10 per cent of the workforce are not subject to the objective laid down in paragraph 1.
7.Member States may provide that the objective laid down in paragraph 1 is met where listed companies can show that members of the under-represented sex hold at least one third of all director positions, irrespective of whether they are executive or non-executive. / EWL Amended text
Article 4 Objectives with regard to executive and non-executive/supervisory board members
1.Member States shall ensure that companies with more than 50 employees and all state-owned companiesin whose boards the equal representation of women and men are less than 50 per cent of the executive and non-executive/supervisory board positions make the appointments to those positions on the basis of a comparative analysis of the qualifications of each candidate, by applying pre-established, clear, neutrally formulated and unambiguous criteria, in order to attain the equal representation of both sexesat the latest by 1 January 2020 or at the latest by 1 January 2018 in case of listed companies which are public undertakings. Small and medium sized companieshave to attain the equal representation of both sexes before the expiry day of the directive.
2.The number of executive and non-executive/supervisory board positions necessary to meet the objective laid down in paragraph 1 shall be the number closest to the proportion of 50 per cent.
3.In order to attain the objective laid down in paragraph 1, Member States shall ensure that, in the selection of executive and non-executive/supervisory board positions, priority shall be given to the candidate of the under-represented sex if that candidate is equally qualifiedon the basis of a comparative analysis in terms of suitability, competence and professional performance.
4.Member States shall ensure that companies with more than 50 employees and all state-owned companies are obliged to disclosethe qualification criteria upon which the selection was based, the objective comparative assessment of those criteria and, where relevant, the considerations tilting the balance in favour of a candidate of the non-under-represented sex.
5.Member States shall take the necessary measures, in accordance with their national judicial systems, to ensure that where an unsuccessful candidate of the under-represented sex establishes facts from which it may be presumed that that candidate was equally qualified as the appointed candidate of the other sex, it shall be for companies with more than 50 employees and all owned-state companies to prove that there has been no breach of the rule laid down in paragraph 3.
6.Member States may provide that listed companies where the members of the under-represented sex represent less than 10 per cent of the workforce are not subject to the objective laid down in paragraph 1.
7.Member States may provide that the objective laid down in paragraph 1 is met where listed companies can show that members of the under-represented sex hold at least one third of all director positions, irrespective of whether they are executive or non-executive.
Justification
The equal representation of women and men on corporate boards is a principle of democracy and human rights and many studies show that it contributes to growth and better decision-making, therefore, the objective of the directive should be toensure parity / true equal representation among executive and non-executive/supervisory board members . The right to equally participate in economic power is a fundamental right for women and men, for example as regards major economic decisions made by companies and enterprises, which have a widespread impact on the lives of women and men. Such decisions lack legitimacy when half of the European population is de-facto excluded from their deliberation and formulation. The objective to be laid down especially in paragraph 1 has to be 50% for both sexes.
To achieve parity in all companies with more than 50 employees and all owned-state companies until 2020,companies have to be obliged to disclose the qualification criteria to the non-selected candidates of the under-represented sex upon which the selection was based if the non-under-represented sex is appointed for the executive and non-executive/supervisory board positions.
The paragraphs 6 and 7 have to be removed as they are in contradiction with the aim to achieve an equal representation of women and men on corporate boards. Paragraph 6 would even promote the unequal representation of women and men. Especially, in companies where women are highly under represented,companies should have to put effective measures in place to enforce the representation of women in the workforce. Hereby, the equal representation of women and men at the upper level of these companies would ensure that decision-making is not seen merely as a male domain and would change the culture of the company to attract more female employees.
Amendment 5
Article 5
Additional measures by companies and reporting
Text proposed by the Commission
1.Member States shall ensure that listed companies undertake individual commitments regarding gender-balanced representation of both sexes among executive directors to be achieved at the latest by 1 January 2020, or, in case of listed companies which are public undertakings, by 1 January 2018.
2.Member States shall require listed companies to provide information to the competent national authorities, once a year as from [two years after adoption], about the gender representation on their boards, distinguishing between non-executive and executive directors and about the measures taken in view of the objectives laid down in Article 4(1) and in paragraph 1 of this Article, and to publish that information in an appropriate and accessible manner on their website.
3.Where a listed company does not meet the objectives laid down in Article 4(1) or its own individual commitments taken pursuant to paragraph 1 of this Article, the information referred to in paragraph 2 of this Article shall include the reasons for not reaching the objectives or commitments and a description of the measures which the company has adopted or intends to adopt in order to meet the objectives or commitments.
4.Member States shall take the necessary measures to ensure that the body or bodies designated in accordance with Article 20 of Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) are also competent for the promotion, analysis, monitoring and support of gender balance on the boards of listed companies. / EWL Amended text
1.Member States shall require that companies with more than 50 employees and all state-owned companies undertake comprehensive accompanying measuresto ensure the equalrepresentation of men and women amongexecutive and non-executive/supervisory board members to be achieved at the latest by 1 January 2020, or, in case of state-owned companies which are public undertakings, by 1 January 2018.
2.Member States shall require that companies with more than 50 employees and all owned-state companies to provide information to the competent national authorities, once a year as from [two years after adoption], about the gender representation on their executive and non-executive/supervisory boardmembersand about the measures taken in view of the objectives laid down in Article 4(1) and in paragraph 1 of this Article, and to publish that information in an appropriate and accessible manner on their website.
3.Where acompany with more than 50 employees oran state-owned company does not meet the objectives laid down in Article 4(1) or its own comprehensive accompanying measurestaken pursuant to paragraph 1 of this Article, the information referred to in paragraph 2 of this Article shall include the reasons for not reaching the objectives and a description of thecomprehensive accompanying measures which the company has adopted or intends to adopt in order to meet the objectives.
4.Member States shall take the necessary measures to ensure that the body or bodies designated in accordance with Article 20 of Directive 2006/54/EC of the European Parliament and of the Council of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation (recast) are also competent for the promotion, analysis, monitoring and support of equal representation of women and men on the boards of companies with more than 50 employees and all state-owned companies.
Justification
Article 5 and the amendment proposals by the EWL to the different paragraphs have to be seen in the light of ensuring that equal representation of women and men on the boards of companies with more than 50 employees and all owned-state companies need additional measures to guarantee parity in 2020 as formulated by the Directive.
As evidence shows, beneath the legal compulsion as lay out in Article 4 (1), further mechanisms can have measurable effects to fulfil the objectives of the Directive until 2020. Good practices in these terms have been highlighted in many studies as for example the so-called comply and explain mechanism as stated in Article 5 (2) and 5(3). These measures are already used in different EU member states as for example in the Netherlands and the United Kingdom.
Further comprehensive accompanying measures which are leading examples of good practices are as follows:
Training for both women and men, mentoring and sponsor programmes, awards and prizes, data bases of women interested to sit on boards or codes of practice to mention few.
This includes also the role of the member states and its public authorities and their obligations to fulfil the objectives of the Directive until 2020 and the measures and reporting systems set by the member states in accordance with the directive to the companies with more than 50 employees and all owned-state companies.
Amendment 6
Article 6
Sanctions
Text proposed by the Commission
1.Member States shall lay down rules on sanctions applicable to infringements of the national provisions adopted pursuant to this Directive and shall take all necessary measures to ensure that they are applied.
2.The sanctions must be effective, proportionate and dissuasive and may include the following measures:
(a)administrative fines;
(b)nullity or annulment declared by a judicial body of the appointment or of the election of non-executive directors made contrary to the national provisions adopted pursuant to Article 4(1). / EWL Amended text
1.Member States shall lay down rules on sanctions applicable to infringements of the national provisions adopted pursuant to Article 4(1) and shall take all measures necessary to ensure that they are applied.In particular Member States shall ensure that:
2. Acompany with more than 50 employees or a state-owned companythat does not comply with the objectives receives a notice with a request to remedy the situation within a period not exceeding six months.
If a company with more than 50 employees or a state-owned company does not remedy the situation within this period, it is subject to sanctions, which shall be effective, proportionate and dissuasive
Sanctions may include one or several of the following measures:
(a) administrative fines;
(b) where relevant, exclusion from entitlement to some or all public benefits, aid or subsidies, including EU funding managed by Member States;
(c) where relevant, exclusion from participation in a public contract as defined in Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of procedures for the award of public works contracts, public supply contracts and public service contracts or in Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement procedures of entities operating in the water, energy, transport and postal services sectors;