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EU countries agree on a rule to improve gender equality in company leadership

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Brussels, March 14 (EFE).- The Ministers of Employment and Social Affairs of the European Union (EU) gave their approval on Monday to a community directive that aims to improve the gender balance in the boards of directors of companies, ten years after the European Commission presents the legislative proposal.

After the green light from the Member States, it is still necessary to negotiate the text and reach an agreement with the European Parliament, the EU’s co-legislator together with the countries, so that the norm can enter into force.

The directive sets a quantitative target on the percentage of members of the “underrepresented sex” on the boards of listed companies, excluding the Council, which represents the countries, in a statement. Women are usually the underrepresented sex.

Companies must take steps to reach, by 2027, the minimum target of 40% members of the underrepresented sex for non-executive directors or 33% for all members of their board of directors.

If these objectives are not met, the companies will have to carry out government appointments or elections applying “clear, unequivocal and neutrally formulated” criteria.

Countries must also ensure that, when choosing between candidates with the same qualifications “in terms of suitability, skills and professional performance”, companies give priority to the applicant of the underrepresented sex, women in most cases.

The Council specified that Member States that have previously adopted on their own, as national objectives to achieve a more balanced representation of women and men, can suspend the appointment or election requirements provided for in the directive.

“The same happens if they have already made progress that allows them to approach the objectives set in the directive,” the Council explained.

In its position, the community institution also clarified that it is up to the Member State, instead of the companies, to choose between the two proposed objectives. Therefore, countries may prefer to reach 40% for non-executive directors or 33% for all members of the board of directors.

The Council admitted that progress has been made towards greater gender equality on boards of directors, but found that there are still disparities.

In a detailed sense that in October 2021 only 30.6% of the members of the boards of directors and just 8.5% of the presidents of the boards of directors were women.

“The difference between the Member States is considerable. Those in which measures have been introduced are progressing much faster than those in which there are no measures”, they occurred.

The Council stressed that the existence of a higher proportion of women “in economic decision-making positions” is expected to have “a positive indirect effect for the entire economy” and highlighted that women represent “around 60% of new university degrees” in the EU.

‘In this way, a better gender balance on company boards would also make it possible to make better use of Europe’s large number of highly qualified women,’ she said.

Sweden voted against because it considered that the measures on gender equality should not be adopted by the European Union, but by the countries.

Poland also opposed it because it believes that the directive breaks the principles of subsidy and proportionality, and believes that gender equality can be achieved without binding quotas.

Estonia, Slovakia and Hungary opted for abstention.

c) EFE Agency

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