Proposal for a Directive of the European Parliament and of the Council on improving the gender balance among directors of companies listed on stock exchanges and related measures - Hoofdinhoud
Contents
| Documentdatum | 30-09-2014 |
|---|---|
| Publicatiedatum | 02-10-2014 |
| Kenmerk | 12876/14 |
| Van | Working Party on Social Questions |
| Externe link | origineel bericht |
| Originele document in PDF |  |
DE informed the Working Party that it supported the political aim of improving the gender balance on company boards. Although it had initially rejected the original proposal, DE was grateful for the drafting suggestions tabled by IT; internal consultations were still under way. DE was also considering tabling written suggestions in due course.
LT reiterated its support for the draft Directive as the right instrument for improving the gender balance. FI expressed the hope that progress could be made on the file and a compromise reached. BG stated that it continued to support the proposal in principle, although it had difficulties with the deadline for reaching the quantitative objectives (1 January 2020). RO, ES and PL reaffirmed their support for the objectives of the proposal, ES however voicing doubts as to whether a binding instrument was the best solution. RO saw a need for further discussion certain aspects, namely, the deadline for meeting the quantitative objectives, the practical implications of the procedural requirements, and the legal basis.
PT explained that it was still studying the Presidency's drafting suggestions.
CZ explained that it was still reviewing its position and was thus unable to comment on the
Presidency's drafting suggestions.
DE, RO, IE, ES, AT and PL entered general scrutiny reservations.
UK, DK, HU, SE, HR, EE, SK and NL reaffirmed their opposition to the proposal. While many of these delegations supported the objective of the draft Directive, they felt that adopting binding measures at the EU level was not the best way of pursuing it.
The Cion representative thanked the Presidency for the new version of the text, explaining that the Cion had no formal position on it as yet. Noting that the Presidency had focused its work on improving legal certainty of the elements providing for subsidiarity (Article 4b), the Cion representative explained that the provisions contained in the proposed Directive could be seen as offering a default solution for those Member States that did not choose to improve the gender balance on company boards by other means of their own choosing that delivered the same results. He observed that the Presidency's drafting suggestions still contained the principle that national measures needed to be "equally effective" in order for Member States to have the right to suspend the substantive provisions (see Article 4b(1)).
The Chair and Cion both appealed to delegations opposed to the draft Directive, urging them to engage in the discussion with a view to searching for solutions.
II. MAIN ITEMS DISCUSSED
"Equally effective national measures" (Article 4b and Recital 29a)
ES and IE welcomed the attempt to improve flexibility in Article 4b. BG also supported the suggested text in principle.
Cion observed that the provision contained in Article 4b(1a)(c), which aimed to address the fact that some Member States had lower starting-points, would also ensure that only countries showing a positive upward trend could benefit from the suspension clause.
Responding to a question by ES regarding the 7.5 percentage point increase in the level of representation of members of the under-represented sex required under Article 4b(1a)(c), Cion explained that the progressive trend would have to be observed during the five-year period immediately before the deadline for implementation. The Presidency underlined the importance of clarity and flexibility, stressing that the required progress should be appropriately defined.
Responding to a question from IE, Cion agreed that the wording describing the conditions allowing Member States to suspend the application of Article 4a ("equal effectiveness" or "progress coming close" (Article 4b(1))) could be improved but also pointed out that the
Presidency suggestions already had the effect of increasing clarity. Regarding the combination of descriptive criteria and an open list of examples in Article 4b(1), Cion made the point that using a closed list of examples (and no descriptive criteria) would give maximum legal certainty, but at the expense of flexibility. The logic of the current draft provisions was to recognise the possibility of other efficient approaches by Member States than those listed in the text. As Recital 29a explained, a suspension should be given to any Member State "where it can be reasonably shown that the measures taken are of equivalent efficacy." The Chair confirmed that the intention of the Presidency in suggesting an open list of examples in Article 4b(1a)(c) was to increase flexibility, which necessarily left room for interpretation. She invited delegations to reflect further on this issue.
NL expressed the concern that legal certainty was being reduced through the (in themselves, laudable) attempts by the Presidency to improve the text. NL asked who would have the final say in clarifying the limits for the flexibility offered in Article 4b -- would it be Cion or the Court of Justice of the EU (CJEU)? The vaguer the provisions, NL warned, the more likely it was that the CJEU would one day be called on to interpret the Directive. The fact that progress was being made in certain Member States without any binding legislation at the national level was a powerful argument against adopting such measures at the EU level either. As with certain social policy goals, gender balance on company boards could, accordingly to NL, be effectively pursued by softer means such as a Council Recommendation.
The Chair repeated that the purpose of the drafting suggestions was precisely to allow
Member States to opt for non-legislative approaches should they so wish. In Italy, progress had not been achieved before binding legislation was adopted. In other countries, softer options were proving effective. The draft Directive sought to accommodate the diversity that existed among the Member States, and it also contained a sunset clause (Article 10(2)); it thus fully respected the principle of subsidiarity. The Chair acknowledged that legal certainty could be improved further, but reiterated that flexibility meant leaving a margin of discretion to the Member States and the Commission in interpreting the provisions. However, another option might be to add more examples to Article 4b(1a) and to make it into a closed list.
Echoing these remarks, Cion stated that it was not unusual for laws to contain a margin of interpretation, and recalled that a Directive was, by definition, an instrument that defined certain objectives while leaving it up to the Member States to choose the means of attaining them.
Responding to ES, Cion explained that the obligation to ensure the application of Article 4a by 1 October 2020 (see Article 4b(2)) was one that would only apply to those Member States that had chosen to apply the suspension clause set out in Article 4b but failed to meet the conditions set out in Article 4b(2)(a) and (b) by 1 January 2020.
Article 4c and Recital 24a (Individual quantitative objectives)
The Chair explained that the purpose of the new drafting suggestions was to achieve a balance: if the listed companies where members of the under-represented sex made up less than 10% of the workforce were exempted from pursuing the quantitative objectives laid down in the Directive, they should nevertheless be required to set their own quantitative objectives for improving the gender balance on their boards.
Cion recalled that the exemption in question had been introduced on the grounds of the fact that, in the companies in question, it could be difficult to find enough members of the underrepresented sex, especially worker representatives to be chosen from the workforce, to serve on company boards.
FR did not support the exemption in question, but was willing to seek a compromise.
Responding to BG, the Chair explained that there was no contradiction between the exemption set out in Article 4(6) and the specific provisions set out in Article 4c(2) and recital 24a. Cion, in turn, explained that the intention had never been to offer an outright exemption for listed companies where members of the under-represented sex made up less than 10% of the workforce.
Article 7a (Bodies for the promotion of gender equality)
The Chair explained that this provision aimed to offer the Member States flexibility in choosing a body for the promotion, analysis, monitoring and support of gender balance on company boards.
IE saw a need to specify that "support" would not be support for specific individuals or companies.
FR supported Article 7a.
BG; scrutiny reservation on Article 7a.
Cion welcomed the Presidency's drafting suggestions in Article 7a, which were faithful to the original proposal, and explained that the formulations differed from the equivalent provisions in classical anti-discrimination directives due to the fact that the proposed Directive would create more general tasks for the Equality Bodies (or other bodies). Concurring, the Chair explained that these bodies would have the role of supporting the policy set out in the
Directive, but would not be supporting individuals or companies.
Further details of delegations' positions are set out in the footnotes to the attached text.
III. CONCLUSION
The date of the next meeting will be announced in due course. Delegations were invited to
submit written suggestions no later than 22 September.
ANNEX
Proposal for a
DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on improving the gender balance among directors of companies listed on stock exchanges and related measures
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Articles
157(3) thereof,
Having regard to the proposal from the European Commission,
After transmission of the draft legislative act to the national Parliaments,
Having regard to the opinion of the European Economic and Social Committee, 1
1 OJ C , , p. .
Acting in accordance with the ordinary legislative procedure,
Whereas:
(1) Equality between women and men is one of the Union's founding values and core aims under Article 2 and Article 3(3) of the Treaty on European Union. Under the terms of Article 8 of
the Treaty on the Functioning of the European Union (hereinafter referred to as the Treaty), the Union shall aim to eliminate inequalities, and to promote equality, between men and women in all its activities. Article 157(3) of the Treaty provides a legal basis for the adoption of Union measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation.
(2) The principle of positive action and its importance for achieving effective equality between women and men in practice are recognised in Article 157(4) of the Treaty and in Article 23 of the Charter of Fundamental Rights of the European Union, which provides that equality
between women and men must be ensured in all areas and that the principle of equality shall not prevent the maintenance or adoption of measures providing for specific advantages in favour of the under-represented sex.
(3) Council Recommendation 84/635/EEC of 13 December 1984 on the promotion of positive
action for women 2 recommended that Member States should take steps to ensure that positive
action includes, as far as possible, actions having a bearing on active participation by women in decision-making bodies. Council Recommendation 96/694/EC of 2 December 1996 on the
balanced participation of women and men in the decision-making process 3 recommended that
Member States should encourage the private sector to increase the presence of women at all levels of decision-making, notably by the adoption of, or within the framework of, equality plans and positive action programmes.
2 OJ L 331, 19.12.1984, p. 34.
3 OJ L 319, 10.12.1996, p.11.
(4) In recent years the European Commission has presented several reports taking stock of the
situation concerning gender diversity in economic decision-making. 4 The Commission has
encouraged publicly listed companies in the European Union to increase the number of women on their boards by self-regulatory measures and to make concrete voluntary
commitments in that regard. 5 In its Women's Charter 6 of 5 March 2010, the European
Commission underlined that women still do not have full access to the sharing of power and decision-making in political and economic life and reaffirmed its commitment to use its powers to promote a fairer representation of women and men in positions of responsibility. Improving the gender balance in decision-making was defined by the Commission's strategy
for equality between women and men 2010-2015 7 as one of its priority tasks.
(5) In the European Pact for Gender Equality 2011-2020, which was adopted on 7 March 2011, the Council acknowledged that gender equality policies are vital to economic growth,
prosperity and competitiveness, reaffirmed its commitment to close the gender gaps with a view to meeting the objectives of the Europe 2020 Strategy, especially in three areas of great relevance to gender equality, namely employment, education and social inclusion, and urged action to promote the equal participation of women and men in decision-making at all levels and in all fields, in order to make full use of all available talent.
4 Commission report 'More women in senior positions' (2010); Commission Staff Working
Paper 'The Gender Balance in Business Leadership' of 1.3.2011 (SEC(2011) 246 final); Progress Report 'Women in economic decision-making in the EU' of 5.3.2012; Commission Staff Working Document 'Progress on equality between women and men in 2011' of 16.4.2012 (SWD(2012) 85 final).
5 'Women on the Board Pledge for Europe', IP/11/242.
(6) The European Parliament, in its resolution on women and business leadership of 6 July 2011 8 ,
urged companies to attain the critical threshold of 30 per cent female membership of management bodies by 2015 and 40 per cent by 2020. It called on the Commission, if the steps taken by companies and the Member States were found to be inadequate, to propose legislation by 2012, including quotas. The European Parliament reiterated that call for legislation in its resolution of 13 March 2012 on equality between women and men in the
European Union – 2011. 9
(7)
(8)
(9)
(10) Europe has a large pool of highly qualified women. Improving the gender balance on company boards is essential for making more efficient use of existing human capital, which is key to addressing the EU's demographic challenges. Moreover, it is widely acknowledged that the presence of women in the boardroom improves corporate governance and numerous studies have shown a positive correlation between gender diversity at the top management level and a company's financial performance and profitability. Despite the existing evidence of the beneficial impact of gender balance on companies themselves and the economy in general, and despite the existing Union legislation prohibiting sex discrimination and Unionlevel actions encouraging self-regulation, women continue to be vastly outnumbered by men in the highest decision-making bodies of companies throughout the Union. In the private sector and especially in listed companies this gender imbalance is particularly significant and acute.
8 2010/2115(INI).
The Commission's key indicator of gender representation on corporate boards shows that the proportion of women involved in top-level business decision-making remains very low. According to the Commission's Report on Progress on Equality between Women and Men in 2013, women account for an average of 17.8 per cent of the members of boards of directors in the largest publicly listed companies, only 4.8 per cent of chairpersons, and 2.8 per cent of chief executive officers.
(10b) The Europe 2020 Strategy for Smart, Sustainable and Inclusive Growth 10 recognised that
increasing women's labour market participation was a precondition for boosting growth and for tackling demographic challenges in Europe. The Strategy set a headline target of reaching an employment rate of 75 per cent for women and men aged 20-64 by 2020, which can only be reached if there is a clear commitment to gender equality and a reinforced effort to tackle all barriers to women's participation in the labour market. The recent economic crisis highlighted Europe's ever-growing need to rely on knowledge, competence and innovation and to make full use of the pool of available talent. Enhancing women's participation in economic decision-making, on company boards in particular, is expected to have a positive spill-over effect on women's employment in the companies concerned and throughout the whole economy.
(11) The proportion of women on company boards is progressing very slowly, with an average annual increase of just 0.6 percentage points during the past years. The rate of improvement has differed in individual Member States and has led to highly divergent results. Much more significant progress was noted in the Member States where binding measures have been
introduced. The divergence between Member States are likely to increase given the very different approaches to ensure a more balanced representation of women and men on boards. Therefore Member States should be encouraged to share information about the effective measures taken and policies adopted at the national level, and to exchange best practice, with a view to supporting progress across the Union towards achieving a more balanced representation of women and men on company boards.
(12)
(13) The current lack of transparency of the selection process and qualification criteria for board positions in most Member States represents a significant barrier to more gender diversity
among board members and negatively affects both the board candidates' careers and freedom of movement, as well as investor decisions. Such lack of transparency prevents potential candidates for board positions from applying to boards where their qualifications would be most required and from challenging gender-biased appointment decisions, thus restricting their freedom of movement within the internal market. On the other hand, investors have different investment strategies that require information linked also to the expertise and competence of the board members. More transparency in the qualification criteria and the selection process for board members enables investors to better assess the company's business strategy and to take informed decisions.
(14) While this Directive does not aim to harmonise national laws on the selection process and qualification criteria for board positions in detail, the introduction of certain minimum
standards as regards the requirement for listed companies without balanced gender representation to select candidates for election or appointment to the posts of non-executive directors on the basis of an objective comparative assessment of their qualifications in terms of suitability, competence and professional performance is necessary for improving the gender balance . Only an EU-level measure can effectively help to ensure a competitive levelplaying field throughout the Union and avoid practical complications in business life.
(15)
(16) The Union should therefore aim to increase the presence of women on company boards, in order both to boost economic growth and the competitiveness of European companies and to achieve effective gender equality on the labour market. This aim should be pursued through minimum requirements on positive action in the form of binding measures aiming at attaining a quantitative objective for the gender composition of boards of listed companies, in view of the fact that Member States and other countries which have chosen this or a similar method have achieved the best results in ensuring a more balanced representation of women and men in economic decision-making positions.
(17) Companies listed on stock exchanges enjoy a particular economic importance, visibility and impact on the market as a whole. These companies set standards for the wider economy and their practices can be expected to be followed by other types of companies. The public nature of the listed companies justifies that they be regulated to a greater extent in the public interest.
(17a) The measures provided for in this Directive should apply to listed companies, which are defined as companies having their registered office in a Member State and whose shares are admitted to trading on a regulated market within the meaning of point (14) of Article 4(1) of Directive 2004/39/EC i of the European Parliament and of the Council of 21 April 2004 on
markets in financial instruments, 11 in one or more Member States. This Directive does not
affect the existing legislation on determining the seat of a listed company.
(17b) For the purposes of the implementation of this Directive the Member State competent to regulate the matters under this Directive should be the Member State in which the listed company in question has its registered office, rather than the Member State on whose
regulated market the listed company trades its shares. The applicable law should be the law of the Member State in which the listed company has its registered office.
11 OJ L 145, 30.4.2004, p. 1.
(18) This Directive should not apply to small and medium-sized enterprises (SMEs), as defined by Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of
micro, small and medium-sized enterprises 12 .
(19) There are various systems of board structures for listed companies in the Member States, the main distinction being between a dual ('two-tier') system with both a management board and a supervisory board and a unitary ('one-tier') system combining the management and
supervisory functions in a single board. There are also mixed systems, which feature aspects of both systems or give companies an option between different models. The measures provided for in this Directive should apply to all board systems in the Member States.
(20) All board systems distinguish, de jure or de facto, between executive directors, who are involved in the daily management of the company, and non-executive directors who are not involved in the daily management, but do perform a supervisory function. The Directive aims to improve the gender balance among both executive and non-executive directors on the boards of listed companies. The specific provisions concerning the two categories of directors are differentiated in order to strike the right balance between the need to increase the gender diversity of boards and the need to minimise interference with the day-to-day management of a company.
(21) The quantitative objectives provided for in this Directive should apply to all non-executive directors. In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the companys' workforce and/or of employee organisations pursuant to national law or practice. The quantitative objectives should also apply to these directors. However, the means for ensuring that those objectives are attained, taking into
account the fact that some non-executive directors are employee representatives, should be defined by the Member States concerned, with due regard to the specific rules for the election or designation of employee representatives as laid down in Member States' legislation and respect the freedom of vote in the election of employee representatives.
12 OJ L 124, 20.5.2003, p. 36.
(22) Listed companies in the Union should aim to attain the objective of having at least 40 per cent of non-executive directors of the under-represented sex no later than 1 January 2020.
Alternatively, since listed companies should aim to increase the proportion of the underrepresented sex in all decision-making positions, Member States may provide that listed companies may aim to attain the objective that members of the under-represented sex hold at least 33 per cent of all director positions, irrespective of whether they are executive or nonexecutive. These objectives concern the overall gender diversity among directors and do not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, this Directive does not exclude any particular candidates for director positions, nor does it impose any individual directors on companies or shareholders. It respects the shareholders’ rights and the freedom of vote at the assembly of shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.
(23)
(24) Determining the number of director positions necessary to attain the objectives requires further specification since for most board sizes it is mathematically possible only to go beyond or remain below the exact share of 40 per cent or, where applicable, 33 per cent. Therefore, the number of board positions necessary to meet the objective should be the number closest to 40 per cent, or, where applicable, 33 per cent, and should in any case be less than 50 per cent.
(24a) Since the gender composition of the workforce may have a direct impact on the availability of candidates of the under-represented sex, Member States may provide that the quantitative
objectives concerning the representation of men and women among directors laid down in this
Directive do not apply to listed companies where the members of the under-represented sex
make up less than 10 per cent of the employees. Such companies should nevertheless set their
own quantitative objectives regarding gender-balanced representation of both sexes among all
director positions and aim to attain those objectives by 1 January 2020.
(25) In its case-law 13 on positive action and the compatibility thereof with the principle of nondiscrimination
on ground of sex (now also laid down in Article 21 of the Charter of Fundamental Rights of the European Union), the Court of Justice of the European Union accepted that priority may in certain cases be given to the under-represented sex in selection for employment or promotion, provided that the candidate of the under-represented sex is equally qualified as compared with the competitor of the other sex in terms of suitability, competence and professional performance, that the priority is not automatic and unconditional but may be overridden if reasons specific to an individual candidate of the other sex tilt the balance in that candidate's favour, and that the application of each candidate is the subject of an objective assessment which specifically applies all the selection criteria to the individual candidates.
13 C-450/93: Kalanke (1995 ECR I-3051), C-409/95: Marschall (1997 ECR I-6363), C-158/97:
Badeck (2000 ECRI I-1875), C-407/98: Abrahamsson (2000 ECR I-5539).
(26) In line with that case-law, Member States should ensure that those listed companies on whose boards members of the under-represented sex hold less than 40 per cent of non-executive
director positions, or less than 33 per cent of all director positions, respectively, carry out the selection of the best qualified candidates for election or appointment to those positions on the basis of a comparative analysis of the qualifications of candidates by applying clear, neutrally formulated and unambiguous criteria established at the beginning of the selection process, with a view to attaining the said percentage no later than 1 January 2020. Examples of types of selection criteria that listed companies could apply include professional experience in managerial and/or supervisory tasks, knowledge in specific relevant areas such as finance, controlling or human resources management, leadership and communication skills and networking abilities. Priority should be given to the candidate of the under-represented sex if that candidate is equally qualified as compared with the candidate of the other sex in terms of suitability, competence and professional performance, and if an objective assessment taking account of all criteria specific to the individual candidates does not tilt the balance in favour of a candidate of the other sex.
(27) The methods of selecting candidates for appointment or election to the posts of directors differ from one Member State to another and from one company to another. They may
involve the pre-selection of candidates to be presented to the shareholders' assembly, for example by a nomination committee or by executive search firms. The requirements concerning the selection of candidates should be met at the appropriate stage of the selection process in accordance with national law and the articles of association of the listed companies concerned, prior to the election of a candidate by shareholders, for example while preparing a shortlist. In this respect, this Directive only establishes minimum standards for the process of selection of candidates for appointment or election to the posts, making it possible to apply the conditions provided for by the case-law of the Court of Justice with a view to attaining the objective of a more balanced representation of women and men on boards of listed companies. The Directive respects the shareholders’ rights and the freedom of vote at the assembly of shareholders.
(28) This Directive aims to improve the gender balance among directors of companies listed on stock exchanges and thus to contribute to the realisation of the principle of equal treatment between men and women, recognised as a fundamental right of the Union. Listed companies should therefore be required upon the request of a candidate, to inform that candidate of 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 who is not of the under-represented sex. These limitations to the right to respect for private life with regard to the processing of personal data, recognised by Articles 7 and 8 of the Charter are necessary and, in conformity with the principle of proportionality, genuinely meet recognised objectives of general interest. They are therefore in line with the requirements for such limitations laid down in Article 52(1) of the Charter and with the relevant case-law of the Court of Justice and should be applied in compliance with the
provisions of Directive 95/46/EC i 14 of the European Parliament and of the Council of 24
October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data.
(29) Where a candidate of the under-represented sex establishes the presumption that they were equally qualified as compared with the selected candidate of the other sex, the listed company should be required to demonstrate the correctness of the choice.
(29a) In certain Member States measures may have already been taken providing for means to ensure a more balanced representation of women and men on the boards of listed companies or may still be taken before the deadline for adopting the laws, regulations and administrative provisions necessary to comply with this Directive. In such Member States there should be an opportunity to continue applying those measures instead of the requirements relating to the process of selection of candidates where it can be reasonably shown that the measures taken are of equivalent efficacy with a view to attaining, on average in that Member State, the objective of a presence of the under-represented sex of at least 40 per cent among nonexecutive
directors of listed companies, or, where relevant, of 33 per cent of all directors, by 1 January 2020.
14 OJ L 281, 23.11.1995, p.31.
(29b) In addition to the measures relating to non-executive directors, and with a view also to improving the gender balance among directors involved in daily management tasks, listed companies should be required to set individual quantitative objectives regarding a more balanced representation of both sexes among executive directors, with the aim of attaining them at the latest by 1 January 2020. These objectives should help companies to achieve tangible progress as compared with their current situation. This obligation should not apply to listed companies which pursue the objective of 33 per cent relating to all directors, whether executive or non-executive.
(29d) Member States should require listed companies to provide information on the gender composition of their boards as well as information on the measures taken with a view to attaining the objectives laid down in this Directive, on a yearly basis to the competent national authorities in order to enable them to assess the progress of each listed company towards a more balanced representation of men and women among directors. Such
information should be published by listed companies in an appropriate and accessible manner on their websites. Where the company in question has not met the applicable quantative objectives, such information should also include a description of the measures that company intends to take in the future in order to meet the objectives.
(30) The obligations relating to the process of selection of candidates for appointment or election, the obligation to set a voluntary target in relation to executive directors and reporting
obligations should be enforced by measures which are effective, proportionate and dissuasive.
Without prejudice to national law on the imposition of enforcement measures, as long as
listed companies comply with those obligations, they should not be penalised for failing to
attain the quantitative objectives concerning the representation of men and women among
directors. Enforcement measures should not be applied to listed companies themselves if
under national law a given action or omission is not attributable to the company, but to other
natural or legal persons such as individual shareholders.
(31)
(32)
(33)
(34)
(35)
(35b) Member States or listed companies may introduce or maintain more favourable measures to ensure a more balanced representation of men and women.
(36) This Directive respects fundamental rights and observes the principles recognised by the
Charter of Fundamental Rights of the European Union. In particular, it contributes to the fulfilment of the right to equality between women and men (Article 23 of the Charter), the right to freedom to choose an occupation and the right to engage in work (Article 15 of the Charter). This Directive seeks to ensure full respect for the right to an effective remedy and a fair hearing (Article 47 of the Charter). The limitations on the exercise of the freedom to conduct business (Article 16 of the Charter) and of the right to property (Article 17(1) of the Charter) respect the essence of those rights and freedoms and are necessary and proportionate. They genuinely meet objectives of general interest recognised by the Union and the need to protect the rights and freedoms of others.
(37) While some Member States have taken regulatory action or encouraged self-regulation with mixed results, the majority of Member States have not taken action or indicated their
willingness to act in a way that would bring about sufficient improvement. Projections based on a comprehensive analysis of all available information on past and current trends as well as intentions show that a balanced representation of women and men among board members across the Union in line with the objectives set out in this Directive will not be attained by Member States acting individually at any point in the foreseeable future. In the light of those circumstances and given the growing discrepancies between Member States in terms of the representation of women and men on company boards, the gender balance on corporate boards across the Union can only be improved through a common approach, and the potential for gender equality, competitiveness and growth can be better achieved through coordinated action at Union level rather than through national initiatives of varying scope, ambition and effectiveness. Since the objectives of this Directive cannot be sufficiently achieved by the Member States and can, therefore, by reason of the scale and effect of action, be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union.
(38) In accordance with the principle of proportionality, as set out in that same Article, this
Directive is limited to setting common objectives and principles and does not go beyond what is necessary in order to attain those objectives. Member States are given sufficient freedom to
determine how the objectives laid down in this Directive should best be attained taking national circumstances into account, in particular rules and practices concerning recruitment to board positions. This Directive does not interfere with the possibility for listed companies to appoint the most qualified board members, and it grants a sufficiently long period of adaptation.
(39) In accordance with the principle of proportionality, the objective to be met by listed companies should be limited in time and remain in force only until sustainable progress has been achieved in the gender composition of boards. For that reason, the Commission should regularly review the application of this Directive and report to the European Parliament and the Council. The Directive is due to expire on 31 December 2028. The Commission should assess, in its review, if there is a need to extend the duration of the Directive beyond that period.
(40) In accordance with the Joint Political Declaration of Member States and the Commission of
28 September 2011 on explanatory documents, 15 Member States have undertaken, in justified
cases, to accompany the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. With regard to this Directive, the legislator considers the transmission of such documents to be justified.
HAVE ADOPTED THIS DIRECTIVE:
Article 1
Subject matter
This Directive seeks to achieve a more balanced representation of men and women among the directors of listed companies by establishing measures aimed at accelerated progress towards gender balance while allowing listed companies sufficient time to make the necessary arrangements.
Article 2
Definitions
For the purposes of this Directive, the following definitions shall apply:
15 OJ C 369, 17.12.2011, p. 14.
(1) 'listed company' means a company having its registered office in a Member State, and whose shares are admitted to trading on a regulated market within the meaning of point (14) of
Article 4(1) of Directive 2004/39/EC i, in one or more Member States;
(2) 'board' means any administrative, managerial or supervisory body of a listed company;
(3) 'director' means any member of a board, including an employees' representative;
(4) 'executive director' means any member of a unitary board who is engaged in the daily management of the listed company and any member of a managerial board in a dual board system;
(5) 'non-executive director' means any member of a unitary board other than an executive director and any member of a supervisory board in a dual board system;
(6) 'unitary board' means a single board that carries out both the managerial and the supervisory functions of a listed company;
(7) 'dual board system' means a system in which the managerial and supervisory functions of a listed company are carried out by separate boards;
(8) 'small and medium-sized enterprise' or 'SME' means a company which employs less than 250 persons and has an annual turnover not exceeding EUR 50 million or an annual balance sheet total not exceeding EUR 43 million, or, for an SME having its registered office in a Member State whose currency is not the euro, the equivalent amounts in the currency of that Member State;
(9)
Article 2a
Applicable law
The Member State competent to regulate matters covered in this Directive with respect to a given listed company shall be the Member State in which the company has its registered office and the applicable law shall be the law of that Member State.
Article 3
Exclusion of small and medium-sized enterprises
This Directive shall not apply to small and medium-sized enterprises.
Article 4
Objectives with regard to non-executive directors
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1.Member States shall ensure that listed companies aim to attain the objective that members of the under-represented sex hold at least 40 per cent of non-executive director positions no later than 1 January 2020.
1a. Member States may provide that instead of the objective laid down in paragraph 1 listed companies may aim to attain the objective that members of the under-represented sex hold at least 33 per cent of all director positions, irrespective of whether they are executive or nonexecutive directors by the dates specified in that paragraph.
1b.
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2.The number of non-executive director positions that shall be deemed necessary to attain the objective laid down in paragraph 1 shall be the number closest to the proportion of 40 per
cent, while the number of director positions that shall be deemed necessary to attain the
objective laid down in paragraph 1a shall be the number closest to the proportion of 33 per
cent, but not exceeding 16 50 per cent, as indicated in Annex I.
3.
4.
5.
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6.Member States may provide that listed companies in which the members of the underrepresented sex represent less than 10 per cent of the employees are not subject to the provisions laid down in this Article.
16 FI: clarify this wording: a minority can never be as much as 50%. Cion: provision intends to
address the problem of small board sizes, where a de facto 50% target was to be avoided; open to alternative formulations. Chair: text needs to be fine-tuned. See also Recital 24.
7.
Article 4a
Means to attain the objectives
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1.Member States shall ensure that, with the aim of attaining the objective laid down in Article 4(1) or 4(1a), in listed companies on whose boards members of the under-represented sex
hold less than 40 per cent of the non-executive director positions or less than 33 per cent of all
director positions respectively the selection of candidates for appointment or election 17 is
carried out on the basis of a comparative analysis of the qualifications of each candidate, by applying clear, neutrally formulated and unambiguous criteria established in advance of the selection process.
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2.In the selection of candidates for appointment or election to the positions mentioned in paragraph 1, Member States shall ensure that, when choosing between candidates who are equally qualified in terms of suitability, competence and professional performance, priority shall be given to the candidate of the under-represented sex, 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.
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3.Member States shall ensure that, in response to a request from a candidate who has been considered in the selection for appointment or election, listed companies are obliged to inform that candidate of 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, while respecting the provisions of Directive 95/46/EC i.
17 IE questioned the deletion of the words "to those positions" in Article 2(4a)(1).
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4.Member States shall take the necessary measures, in accordance with their national judicial systems, to ensure that where a candidate of the under-represented sex establishes facts from which it may be presumed that he or she was equally qualified as compared with the
candidate of the other sex selected for appointment or election, it shall be for the listed
company to prove that there has been no breach of the rule laid down in Article 4a(2).
Article 4b
Suspension of the application of Article 4a
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1.A Member State in which, before the deadline for implementation pursuant to Article 8(1), equally effective measures have already been taken with the aim of attaining a more balanced representation of women and men among the directors of listed companies in line with the objectives set out in Article 4, or progress coming close to these objectives has been attained, may suspend the application of Article 4a.
1a. The conditions for the suspension of the application of Article 4a as set out in paragraph 1 shall be deemed fulfilled where, for example:
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a)national legislation requires that members of the under-represented sex hold at least 30 per cent of non-executive director positions or at least 25 per cent of all director positions no later than 1 January 2020 and effective, proportionate and dissuasive enforcement measures apply in the case of non-compliance with these requirements;
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b)members of the under-represented sex hold at least 30 per cent of the total number of all non-executive director positions or at least 25 per cent of the total number of all director positions at the deadline for implementation pursuant to Article 8(1); or c) members of the under-represented sex hold at least 25 per cent of the total number of all non-executive director positions or 20 per cent of the total number of all director positions at the deadline for implementation pursuant to Article 8(1) and the level of representation has increased by at least 7.5 percentage points in the last five years.
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2.Member States which have suspended the application of Article 4a pursuant to paragraph 1 may continue this suspension beyond 1 January 2020 only if
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a)the national legislation complying with the requirements set out in paragraph 1a(a) remains applicable; or
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b)members of the under-represented sex hold at least 30 per cent of the total number of all non-executive director positions or 25 per cent of the total number of all director positions by 1 January 2020.
Member States where the requirements set out in this paragraph are not met shall ensure the application of Article 4a with effect from 1 October 2020.
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3.Where a Member State suspends the application of Article 4a as provided in paragraphs 1-2 on the basis of national measures or progress extending to executive directors, that Member State may also suspend the requirements set out in Article 4c(1).
Article 4c
Individual quantitative objectives
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1.Member States shall ensure that listed companies which are not subject to the objective laid down in Article 4(1a) set individual quantitative objectives regarding gender-balanced representation of both sexes among executive directors, which they aim to attain no later than 1 January 2020.
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2.Where Member States provide, in accordance with Article 4(6), that certain listed companies are not subject to the objectives laid down in Article 4, those Member States shall ensure that such companies set individual quantitative objectives regarding gender-balanced representation of both sexes among all director positions and aim to attain those objectives by 1 January 2020.
Article 5
Reporting
1.
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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 with a view to attaining the applicable objectives laid down in Articles 4(1), 4(1a) and 4c. Member States shall require listed companies to publish that information in an appropriate and accessible manner on their websites.
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3.Where a listed company does not attain the objective laid down in Article 4 (1) or Article
4(1a) or the quantitative objectives it has set for itself pursuant to Article 4c, the information referred to in paragraph 2 shall include the reasons for not attaining the objectives and a description of the measures which the company has already taken and/or intends to take in order to meet them.
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4.(Moved to Article 7a.)
Article 6
Enforcement measures
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1.Member States shall lay down rules on enforcement measures applicable to infringements of the national provisions adopted pursuant to Articles 4a, 4c, 5(2) and 5(3) of this Directive and shall take all necessary measures to ensure that they are applied.
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2.The enforcement measures must be effective, proportionate and dissuasive.
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3.Listed companies may be held liable only for acts or omissions which can be attributed to them in accordance with national law.
Article 7
Minimum requirements
Member States may introduce or maintain provisions which are more favourable than those laid down in this Directive to ensure a more balanced representation of men and women in respect of listed companies, provided those provisions do not create unjustified discrimination or hinder the proper functioning of the internal market.
Article 7a (new)
Bodies for the promotion of gender balance in listed companies
Member States shall designate one or more bodies for the promotion, analysis, monitoring and support of gender balance on the boards of listed companies; these bodies can be, for example, the
ones designated in accordance with Article 20 of Directive 2006/54/EC i 18 of the Europen Parlament
and of the Council of 5 July 2006 on the implementation of principle of equal opportunities and equal treatment of men and women.
Article 8
Implementation
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1.Member States shall adopt and publish, by [two years after adoption] at the latest, the laws, regulations and administrative provisions necessary to comply with this Directive. They shall forthwith communicate to the Commission the text of those provisions.
18 OJ L 204, 26.7.2006, p. 23.
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2.When Member States adopt those provisions, they shall contain a reference to this Directive or be accompanied by such a reference on the occasion of their official publication. Member States shall determine how such reference is to be made.
2a. Member States that have, pursuant to Article 4b, suspended the application of the requirements relating to the process of selection of candidates for appointment or election referred to in Article 4a shall forthwith communicate to the Commission the information
demonstrating that the conditions 19 laid down in Article 4b are fulfilled.
3.
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4.Member States shall communicate to the Commission the text of the main provisions of national law which they adopt in the field covered by this Directive.
Article 9
Review
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1.Member States shall communicate to the Commission by 1 January 2017 at the latest and every two years thereafter, a report on the implementation of this Directive. These reports shall include, inter alia, comprehensive information about the measures taken with a view to attaining the objectives laid down in Article 4(1) or 4(1a) respectively, information provided in accordance with Article 5(2) and information about individual commitments taken by listed companies pursuant to Article 4(c).
19 IE: reword, as no full set of conditions given. Chair: agree on need to redraft.
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2.Member States, having suspended, pursuant to Article 4b, the application of Article 4a shall
include in the reports mentioned in paragraph 1 information showing whether the conditions 20
laid down in Article 4b are fulfilled. The Commission shall issue a specific report by 31
December 2017 ascertaining, inter alia, whether the conditions in Article 4b are fulfilled.
2a.
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3.The Commission shall review the application of this Directive and report to the European
Parliament and the Council by 31 December 2021 at the latest and every two years thereafter.
The Commission shall evaluate in particular whether the objectives of this Directive have
been achieved.
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4.In its reports, the Commission shall assess whether, in the light of developments in the representation of men and women on the boards of listed companies and at different levels of decision-making throughout the economy and taking into account whether the progress made is sufficiently sustainable, there is a need to extend the duration of this Directive beyond the date specified in Article 10(2) or to otherwise amend it.
Article 10 Entry into force and expiry
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1.This Directive shall enter into force on the [twentieth] day following that of its publication in the Official Journal of the European Union.
20 IE: reword, as no full set of conditions given. Chair: agree on need to redraft.
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2.It shall expire on 31 December 2028.
Article 11 Addressees
This Directive is addressed to the Member States.
Done at Brussels,
For the European Parliament For the Council
The President The President
_________________________ ANNEX I
TARGET NUMBERS OF DIRECTORS OF THE
UNDER-REPRESENTED SEX
Minimum number of non-executive Minimum number of directors of
Number of directors of the under-represented the under-represented sex necessary positions on the sex necessary to meet the objective to meet the objective of 33% (Article
Board of 40% (Article 4(1)) 4(1a)
1 - -
2 - -
3 1 (33,3%) 1 (33,3%)
4 1 (25%) 1 (25%)
5 2 (40%) 2 (40%)
6 2 (33,3%) 2 (33,3%)
7 3 (42,9%) 2 (28,6%)
8 3 (37,5%) 3 (37,5%)
9 4 (44,4%) 3 (33,3%)
10 4 (40%) 3 (30%)
11 4 (36,4%) 4 (36,4%)
12 5 (41,7%) 4 (33,3%)
13 5 (38,4%) 4 (30,8%)
14 6 (42,9%) 5 (35,7%) 16 6 (37,5%) 5 (31,3%)
17 7 (41,2%) 6 (35,3%)
18 7 (38,9%) 6 (33,3%)
19 8 (42,1%) 6 (31,6%)
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