Procedure : 2012/0299(COD)
Document stages in plenary
Document selected : A7-0340/2013

Texts tabled :

A7-0340/2013

Debates :

PV 19/11/2013 - 14
CRE 19/11/2013 - 14

Votes :

PV 20/11/2013 - 8.17

Texts adopted :

P7_TA(2013)0488

REPORT     ***I
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25 October 2013
PE 514.670v03-00 A7-0340/2013

on the proposal for a directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures

(COM(2012)0614 – C7-0382/2012 – 2012/0299(COD))

Committee on Legal Affairs

Committee on Women's Rights and Gender Equality

Rapporteurs: Evelyn Regner, Rodi Kratsa-Tsagaropoulou

(Joint committee meetings – Rule 51 of the Rules of Procedure)

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION
 EXPLANATORY STATEMENT
 OPINION OF THE COMMITTEE ON LEGAL AFFAIRS ON THE LEGAL BASIS
 OPINION of the Committee on Economic and Monetary Affairs
 OPINION of the Committee on Employment and Social Affairs
 OPINION of the Committee on the Internal Market and Consumer Protection
 PROCEDURE

DRAFT EUROPEAN PARLIAMENT LEGISLATIVE RESOLUTION

on the proposal for a directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures

(COM(2012)0614 – C7-0382/2012 – 2012/0299(COD))

(Ordinary legislative procedure: first reading)

The European Parliament,

–   having regard to the Commission proposal to Parliament and the Council (COM(2012)0614),

–   having regard to Article 294(2) and Article 157(3) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0382/2012),

–   having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–   having regard to the reasoned opinions sent to its President by national parliaments on the compliance of the draft act with the principle of subsidiarity,

–   having regard to the opinion of the Committee on Legal Affairs on the proposed legal basis,

–   having regard to the opinion of the European Economic and Social Committee,

–   having regard to the opinion of the Committee of the Regions,

–   having regard to Rules 55 and 37 of its Rules of Procedure,

–   having regard to the joint deliberations of the Committee on Legal Affairs and the Committee on Women's Rights and Gender Equality under Rule 51 of the Rules of Procedure,

–   having regard to the report of the Committee on Legal Affairs and the Committee on Women's Rights and Gender Equality and the opinions of the Committee on Economic and Monetary Affairs, the Committee on Employment and Social Affairs and the Committee on the Internal Market and Consumer Protection (A7-0340/2013),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Amendment  1

Proposal for a directive

Recital 2 a (new)

Text proposed by the Commission

Amendment

 

(2a) In order to achieve gender equality in the workplace there must be a gender-balanced model of decision-making at all levels within the company while also ensuring the elimination of the gender pay gap, which contributes significantly to the feminisation of poverty.

Amendment  2

Proposal for a directive

Recital 4

Text proposed by the Commission

Amendment

(4) In recent years the European Commission has presented several reports taking stock of the situation concerning gender diversity in economic decision-making. 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. In its Women's Charter 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 as one of its priority tasks.

(4) In recent years the European Commission has presented several reports taking stock of the situation concerning gender diversity in economic decision-making. The Commission has encouraged publicly listed companies in the European Union to increase the number of the under- represented sex on their boards by self-regulatory measures and to make concrete voluntary commitments in that regard. In its Women's Charter 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 as one of its priority tasks.

Amendment  3

Proposal for a directive

Recital 5

Text proposed by the Commission

Amendment

(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.

(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, knowledge and ideas, thus enriching diversity of human resources and improving business prospects.

Amendment  4

Proposal for a directive

Recital 6

Text proposed by the Commission

Amendment

(6) The European Parliament, in its resolution on women and business leadership of 6 July 2011, 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.

(6) The European Parliament, in its resolution on women and business leadership of 6 July 2011, 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, to be implemented on a temporary basis and to serve as catalysts for change and for rapid reforms designed to eliminate persisting gender inequalities and stereotypes in economic decision-making. 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.

Amendment  5

Proposal for a directive

Recital 6 a (new)

Text proposed by the Commission

Amendment

 

(6a) The Union institutions, bodies and agencies and the European Central Bank should lead by example as regards gender equality in decision-making, inter alia by setting objectives for a gender-balanced representation at all levels. Stringent rules on internal and external recruitment to all Union institutions and agencies should be implemented and monitored without delay. Particular attention needs to be given to policies for the recruitment of senior management. The Union institutions and agencies should publish an annual report setting out their efforts to that end.

Amendment  6

Proposal for a directive

Recital 7

Text proposed by the Commission

Amendment

(7) The efficient use of human capital is the most important determinant of an economy's competitiveness and is key to addressing the EU's demographic challenges, to competing successfully in a globalised economy and to ensuring a comparative advantage vis-à-vis third countries. The pool of highly trained and qualified women is constantly growing as evidenced by the fact that 60 per cent of university graduates are female. A continued failure to draw on this pool in appointments to economic decision-making positions would amount to a failure to fully exploit skilled human capital.

(7) The efficient use of human capital is the most important determinant of an economy's competitiveness, development and growth and is key to addressing the EU's demographic challenges, to competing successfully in a globalised economy and to ensuring a comparative advantage vis-à-vis third countries. The pool of highly trained and qualified women is constantly growing as evidenced by the fact that 60 per cent of university graduates are female. A continued failure to draw on this pool in companies' management positions and decision-making positions would amount to a failure to fully exploit skilled human capital.

Amendment  7

Proposal for a directive

Recital 7 a (new)

Text proposed by the Commission

Amendment

 

(7a) Companies and businesses should consider the creation of a pipeline of board- and management-ready women that encourages, supports and develops female talent at all levels and throughout their careers.

Amendment  8

Proposal for a directive

Recital 7 b (new)

Text proposed by the Commission

Amendment

 

(7b) In order to ensure the promotion of gender equality, Member States should put in place provisions whereby men and women can combine work and family life, with, in particular, flexible arrangements and support for those with care responsibilities.

Amendment  9

Proposal for a directive

Recital 7 c (new)

Text proposed by the Commission

Amendment

 

(7c) The attainment of gender equality in society as a whole entails the establishment of equal academic and professional rights for men and women, and of shared family, childcare and household responsibilities. The fact that women are typically responsible for the large majority of family and household chores may hinder their advancement to top professional positions. Active participation and involvement of men in family responsibilities is crucial for the attainment of a work-life balance and for the creation of equal career opportunities for both men and women. Attention should be paid to tackling gender stereotyping, inflexible and outdated employment policies and inadequate parental leave provisions. Provisions should be in place for women and men to combine family and work life should they so wish. Member States should be encouraged to ensure the implementation of welfare elements such as fair parental leave allowances for both women and men, extensive provision for childcare and opportunities for shared parental leave.

Amendment  10

Proposal for a directive

Recital 8

Text proposed by the Commission

Amendment

(8) At company level, it is widely acknowledged that the presence of women on boards improves corporate governance, because team performance and the quality of decision-making are enhanced due to a more diverse and collective mind-set incorporating a wider range of perspectives and therefore reaching more balanced decisions. Numerous studies have also shown that there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. Enhancing female representation on the boards of publicly listed companies in the Union can therefore have a positive impact on the performance of companies concerned.

(8) At company level, it is widely acknowledged that the presence of women on boards improves corporate governance, because team performance and the quality of decision-making are enhanced due to a more diverse and collective mind-set incorporating a wider range of perspectives as well as a more proactive business model and therefore reaching more balanced decisions, with a view to better reflecting societal and consumers' realities. Numerous studies have also shown that there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. Enhancing female representation on the boards of publicly listed companies in the Union, given the significant economic and social responsibility of such companies, can therefore have a positive impact on the economic performance of companies concerned. Measures to encourage career progression for women at all levels of management should therefore be introduced and reinforced.

Amendment  11

Proposal for a directive

Recital 8 a (new)

Text proposed by the Commission

Amendment

 

(8a) The appointment of women as board members is being hampered by a number of specific factors which can be overcome not only through sanctions but also through educational initiatives and incentives to promote good practices. First, it is essential to heighten awareness in business schools and universities of the benefits of gender equality in making companies more competitive. It is also necessary to encourage regular turnover of board members and to introduce positive measures to promote and reward efforts by states and companies to adopt a more decisive approach to such changes in top economic decision-making bodies at Union level. Finally, taxation and public procurement both provide suitable channels for the promotion of greater gender balance on company boards.

Amendment  12

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) Existing evidence also shows that labour market equality can improve economic growth substantially. Enhancing female presence in the boardrooms of listed companies in the Union not only affects the women appointed to boards, but also contributes to attracting female talent to the company and ensuring a greater presence of women at all levels of management and in the workforce. Therefore, a higher share of women on company boards has a positive impact on closing both the gender employment gap and the gender pay gap. Making full use of the existing female talent pool would constitute a marked improvement in terms of return on education for both individuals and the public sector. Female under-representation in the board rooms of publicly listed companies in the EU is a missed opportunity in terms of achieving long-term sustainable growth for Member States' economies at large.

(9) Existing evidence also shows that labour market equality can improve economic growth substantially. Enhancing female presence in the boardrooms of listed companies in the Union not only affects the women appointed to boards, but also contributes to attracting female talent to the company and ensuring a greater presence of women at all levels of management and in the workforce. Therefore, a higher share of women on company boards should have a positive impact on closing both the gender employment gap and the gender pay gap. Making full use of the existing female talent pool would constitute a marked improvement in terms of return on education for both individuals and the public sector. Female under-representation in the board rooms of publicly listed companies in the EU is a missed opportunity in terms of achieving long-term sustainable growth for Member States' economies at large.

Amendment  13

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

(10) Despite the existing Union legislation aimed at preventing and combating sex discrimination, the Council recommendations aimed specifically at increasing the presence of women in economic decision-making and Union-level actions encouraging self-regulation, women continue to be strongly 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. 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. In January 2012, women occupied on average just 13.7 per cent of board seats in the largest publicly listed companies in Member States. Among non-executive directors only 15 per cent were women.

(10) Despite the existing Union legislation aimed at preventing and combating sex discrimination, the Council recommendations aimed specifically at increasing the presence of women in economic decision-making and Union-level actions encouraging self-regulation, women continue to be strongly under-represented 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, while certain Union institutions and agencies, such as the European Central Bank, also display a deeply problematic gender imbalance. 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. In January 2012, women occupied on average just 13.7 per cent of board seats in the largest publicly listed companies in Member States. Among non-executive directors only 15 per cent were women, which is a clear indication of a democratic deficit and of unfair and discriminatory representation of women, in violation of Union principles of equal opportunities and equal treatment of both sexes in the fields of employment and occupation.

Amendment  14

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(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. Growing discrepancies between Member States are likely to increase given the very different approaches pursued by individual Member States to increase the representation of females on boards that are being pursued by individual Member States.

(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 Member States such as France, which set 2017 as its target for fulfilment of the objectives contained in this Directive, meeting in less than two years the 20 % target set for 2014, or countries such as Norway, which met the 40 % target in three years. In both cases these results were achieved through binding measures. Growing discrepancies between Member States are likely to increase given the very different approaches pursued by individual Member States to increase the representation of females on boards that are being pursued by individual Member States.

Amendment  15

Proposal for a directive

Recital 11 a (new)

Text proposed by the Commission

Amendment

 

(11a) Member States should adopt strategies moving towards a socio-cultural shift in their approach to gender balance by using versatile means to encourage women's participation in the management hierarchy and the taking-up of proactive approaches and actions by employers. Such means could include, inter alia, promoting flexible work schedules and encouraging family-friendly workplaces by providing access to day care.

Amendment  16

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

(12) The scattered and divergent regulation or the absence of regulation at national level as regards the gender balance on boards of listed companies does not only lead to discrepancies in the number of women among non-executive directors and different rates of improvement across Member States, but also poses barriers to the internal market by imposing divergent corporate governance requirements on European listed companies. Those differences in legal and self-regulatory requirements for the composition of corporate boards can lead to practical complications for listed companies operating across borders, notably when establishing subsidiaries or in mergers and acquisitions, as well as for candidates for board positions.

(12) The scattered and divergent regulation or the absence of regulation at national level as regards the gender balance on boards of listed companies does not only lead to discrepancies in the number of women among non-executive directors and different rates of improvement across Member States, but also poses barriers to the internal market by imposing divergent corporate governance requirements on European listed companies. Those differences in legal and self-regulatory requirements for the composition of corporate boards can lead to practical complications for listed companies operating across borders, notably when establishing subsidiaries or in mergers and acquisitions, as well as for candidates for board positions. Nevertheless, enforcement of the provisions laid down in this Directive should be irrespective of the different ways in which non-executive directors are selected in European companies' boards.

Amendment  17

Proposal for a directive

Recital 12 a (new)

Text proposed by the Commission

Amendment

 

(12a) Gender imbalances within companies are greater at more senior levels. Furthermore, many of those women who are represented in senior management are to be found in fields such as human resources and communication, while men at a senior level are more likely to be employed in general management or "line management" within the company. As the main pool for recruitment to corporate board positions is comprised largely of candidates with senior management experience, it is vital that the number of women advancing to such management positions within companies be increased.

Amendment  18

Proposal for a directive

Recital 12 b (new)

Text proposed by the Commission

Amendment

 

(12b) One of the main factors for a correct implementation of this Directive is the effective use of criteria for the selection of non-executive directors, to be set in advance and with full transparency, with candidates' competencies being considered on an equal basis, regardless of their gender.

Amendment  19

Proposal for a directive

Recital 12 c (new)

Text proposed by the Commission

Amendment

 

(12c) In the context of an ageing population and skills shortages, a failure to utilise the potential of half of the population of the Union for company board positions might slow down the development opportunities of the Union's economy and the recovery of its financial structures. If half the talent pool is not even considered for leadership positions, the process and quality of appointments itself may be compromised, leading to increased distrust of the business power structures and possibly to a reduction in the efficient realisation of available human capital. Systematically including suitable candidates from both sexes ensures that new board members are selected from the very best candidates, both male and female and that society is faithfully reflected in corporate decision-making.

Amendment  20

Proposal for a directive

Recital 13

Text proposed by the Commission

Amendment

(13) The current lack of transparency of the selection procedures 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 procedure for board members enables investors to better assess the company's business strategy and to take informed decisions.

(13) The current lack of transparency of the selection procedures 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 procedure for board members enables investors to better assess the company's business strategy and to take informed decisions. It is therefore important for board appointment procedures to be clear and transparent and for applicants to be assessed objectively on their individual merits, irrespective of gender.

Amendment  21

Proposal for a directive

Recital 14

Text proposed by the Commission

Amendment

(14) While this Directive does not aim to harmonise national laws on the selection procedures 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 take appointment decisions for non-executive directors on the basis of an objective comparative assessment of the qualifications of candidates in terms of suitability, competence and professional performance is necessary in order to attain gender balance among non-executives directors. Only an EU-level measure can effectively help to ensure a competitive level-playing field throughout the Union and avoid practical complications in business life.

(14) While this Directive does not aim to harmonise national laws on the selection procedures 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 take appointment decisions for non-executive directors on the basis of a transparent and clearly defined selection procedure and an objective comparative assessment of the qualifications of candidates in terms of suitability, competence and professional performance is necessary in order to attain gender balance among non-executive directors. Only an EU-level binding measure can effectively help to ensure a competitive level-playing field throughout the Union and avoid practical complications in business life.

Amendment  22

Proposal for a directive

Recital 15

Text proposed by the Commission

Amendment

(15) The Europe 2020 Strategy for Smart, Sustainable and Inclusive Growth ascertained that increased female labour force participation is 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 current economic crisis has magnified Europe's ever-growing need to rely on knowledge, competence and innovation and to make full use of the pool of available talent. Enhancing female participation in economic decision-making, on company boards in particular, is expected to have a positive spill-over effect on female employment in the companies concerned and throughout the whole economy.

(15) The Europe 2020 Strategy for Smart, Sustainable and Inclusive Growth ascertained that increased female labour force participation is 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, elimination of the persisting gender pay gap and a reinforced effort to tackle all barriers to women's participation in the labour market, including the existing 'glass-ceiling' phenomenon. The current economic crisis has magnified Europe's ever-growing need to rely on knowledge, competence and innovation and to make full use of the pool of available talent, of both men and women. Enhancing female participation in economic decision-making, on company boards in particular, is expected to have a positive spill-over effect on female employment in the companies concerned and throughout the whole economy.

Amendment  23

Proposal for a directive

Recital 15 a (new)

Text proposed by the Commission

Amendment

 

(15a) Achievement of these objectives is of vital importance in ensuring Europe’s economic competitiveness, encouraging innovation and enhancing professional standards on company boards. The Union has accordingly declared labour market equality and progressively greater gender equality on company boards to be European decade of equality objectives and will examine ways of heightening awareness of progress being achieved in this area.

Amendment  24

Proposal for a directive

Recital 16

Text proposed by the Commission

Amendment

(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 the view of the fact that Member States and other countries which have chosen this or a similar method have achieved the best results in reducing the under-representation of women in economic decision-making positions.

The Union should therefore aim to increase the presence of women on company boards in all Member States, in order to boost economic growth, encourage labour market mobility and strengthen 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 reducing the under-representation of women in economic decision-making positions.

Amendment  25

Proposal for a directive

Recital 16 a (new)

Text proposed by the Commission

Amendment

 

(16a) Listed companies should develop a gender policy in order to attain a more balanced gender representation throughout the company concerned. That policy may include a description of the relevant measures implemented in that company, such as nominating both a female and male candidate for key positions, mentoring schemes and career development guidance for women, and human resource strategies to encourage diverse recruitment. Furthermore, it may include offering flexible working conditions for all employees, for example assistance for parental leave, as well as providing assistance for housework and childcare. Each company may select the policies best suited to its activities and should take active measures to increase the proportion of the under-represented gender in the management of the company.

Amendment  26

Proposal for a directive

Recital 17

Text proposed by the Commission

Amendment

(17) Companies listed on stock exchanges enjoy a particular economic importance, visibility and impact on the market as a whole. The measures provided for in this Directive should therefore apply to listed companies, which are defined as companies incorporated in a Member State whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, in one or more Member States. These companies set standards for the economy in its entirety and their practices can be expected to be followed by other types of companies. The public nature of listed companies justifies that they be regulated to a greater extent in the public interest.

(17) Companies listed on stock exchanges enjoy a particular economic importance, visibility and impact on the market as a whole. The measures provided for in this Directive should therefore apply to listed companies, which are defined as companies whose seat is in a Member State and whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, in one or more Member States. These companies set standards for the economy in its entirety and their practices can be expected to be followed by other types of companies.

Amendment  27

Proposal for a directive

Recital 18

Text proposed by the Commission

Amendment

(18) This Directive should not apply to micro, 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, even if they are listed companies.

(18) This Directive should not apply to micro, 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, even if they are listed companies. However, Member States should put in place policies to support and incentivise SMEs to significantly improve the gender balance at all levels of management and on company boards.

Amendment  28

Proposal for a directive

Recital 21

Text proposed by the Commission

Amendment

(21) In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the company's workforce and/or organisations of workers pursuant to national law or practice. The quantitative objectives provided for in this Directive should apply to all non-executive directors including employee representatives. However, the practical procedures 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.

(21) In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the company's workforce and/or organisations of workers pursuant to national law or practice. The quantitative objectives provided for in this Directive should apply to all non-executive directors including employee representatives. This Directive should take account of the diversity and national characteristics of selection procedures in the Member States.

Amendment  29

Proposal for a directive

Recital 22

Text proposed by the Commission

Amendment

(22) Listed companies in the Union should be imposed obligations of means providing for appropriate procedures with a view of meeting specific objectives regarding the gender composition of their boards. Those listed companies in whose boards members of the under-represented sex hold less than 40 per cent of non-executive director positions should 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. Therefore, the Directive establishes the objective of at least 40 per cent of non-executive directors of the under-represented sex by that date. This objective in principle only concerns the overall gender diversity among the non-executive directors and does not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, it does not exclude any particular candidates for director positions, nor does it impose any individual directors on companies or shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.

(22) Listed companies in the Union should aim to attain the objective of having at least 40 % of non-executive directors of the under-represented sex by 1 January 2020 at the latest. For the purpose of attaining that objective, those listed companies in whose boards members of the under-represented sex hold less than 40 per cent of non-executive director positions should be obliged to carry out the pre-selection or selection procedure for 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.

Amendment  30

Proposal for a directive

Recital 22 a (new)

Text proposed by the Commission

Amendment

 

(22a) The objective of 40 % in principle only concerns the overall gender diversity among the non-executive directors and does not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, it does not exclude any particular candidates for director positions; nor does it impose any individual directors on companies or shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.

Amendment  31

Proposal for a directive

Recital 22 b (new)

Text proposed by the Commission

Amendment

 

(22b) Listed companies should consider putting in place training programmes and mentoring programmes for the under-represented sex as a tool to achieve gender balance where there is a clear gender gap in the selection pool for recruitment to board positions.

Amendment  32

Proposal for a directive

Recital 23

Text proposed by the Commission

Amendment

(23) Member States exercise a dominant influence over listed companies which are public undertakings within the meaning of Article 2(b) of Commission Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings, as well as on financial transparency within certain undertakings. Due to that dominant influence, they have the instruments at their disposal to bring about the necessary change more rapidly. Therefore, in such companies the objective of least 40 per cent of non-executive directors of the under-represented sex should be set at an earlier date.

(23) Member States exercise a dominant influence over listed companies which are public undertakings within the meaning of Article 2(b) of Commission Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings, as well as on financial transparency within certain undertakings. Due to that dominant influence, they have the instruments at their disposal to bring about the necessary change more rapidly. Therefore, in such companies the objective of at least 40 per cent of non-executive directors of the under-represented sex should be set at an earlier date, in conformity with adequate mechanisms to be set up by Member States in line with this Directive.

Amendement  33

Proposal for a directive

Recital 23 a (new)

Text proposed by the Commission

Amendment

 

(23a) Due to their nature, public undertakings, whether listed or not, should serve as a model for the private sector. Therefore, the Commission should assess the situation in the Member States and evaluate whether public undertakings which would not fall within the definition of SME may be incorporated in the scope of this Directive at some point in the future.

Amendement  34

Proposal for a directive

Recital 23 b (new)

Text proposed by the Commission

Amendment

 

(23b) The Commission should collect and analyse facts and figures about the gender balance in non-listed large undertakings which are also of great importance for the economy. An impact assessment should subsequently be carried out to gain an overview of the situation in such undertakings in the Member States and to evaluate whether measures at Union level are needed in order to bring such undertakings within the scope of this Directive at some point in the future. At the same time, the Commission should explain the available options to that end, since special schemes may be necessary for such undertakings owing to specific national circumstances.

Amendment  35

Proposal for a directive

Recital 24

Text proposed by the Commission

Amendment

(24) Determining the number of non-executive director positions necessary to meet the objective 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. Therefore, the number of board positions necessary to meet the objective should be the number closest to 40 per cent. At the same time, in order to avoid discrimination of the initially over-represented sex, listed companies should not be obliged to appoint members of the under-represented sex to half or more of the non-executive board positions. Thus, for example, members of the under-represented sex should hold at least one position on boards with three or four non-executive directors, at least two positions on boards with five or six non-executive directors, and at least three positions on boards with seven or eight non-executive directors.

(24) Where a non-executive board consists of only three members, it is mathematically impossible to go beyond a share of 40 % for both genders. Therefore, in such cases, members of the underrepresented sex should hold at least one position on boards with three non-executive directors.

Amendment  36

Proposal for a directive

Recital 26

Text proposed by the Commission

Amendment

(26) In line with that case-law, Member States should ensure that the selection of the best qualified candidates for non-executive directors is based on a comparative analysis of the qualifications of each candidate on the basis of pre-established, clear, neutrally formulated and unambiguous criteria. Examples of types of selection criteria that 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 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.

(26) In line with that case-law, Member States should ensure that the selection of the best qualified candidates for non-executive directors is based on a comparative analysis of the qualifications of each candidate on the basis of pre-established, clear, neutrally formulated and unambiguous criteria. Examples of types of selection criteria that companies could apply include professional experience in managerial and/or supervisory tasks, international experience, multidisciplinarity, 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 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.

Amendment  37

Proposal for a directive

Recital 27

Text proposed by the Commission

Amendment

(27) The methods of recruiting and appointing 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, the direct appointment of directors by individual shareholders or a vote in the shareholders' assembly on individual candidates or lists of candidates. 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. In this respect, this Directive only establishes a minimum harmonisation of selection procedures, 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 gender representation in the boards of listed companies.

(27) The methods of recruiting, selecting and appointing 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, the direct appointment of directors by individual shareholders or a vote in the shareholders' assembly on individual candidates or lists of candidates. This Directive respects the diversity of selection procedures, which should be based on transparency and merit, while insisting that the aim of increasing the participation of the under-represented sex on boards be attained. 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. In this respect, this Directive allows for diversity of selection procedures, with a view to attaining the objective of a more balanced gender representation in the boards of listed companies. The provisions of this Directive do not unduly interfere with day-to-day management, since companies maintain the freedom to select candidates on the basis of qualifications or other objective relevant considerations.

Amendment  38

Proposal for a directive

Recital 27 a (new)

Text proposed by the Commission

Amendment

 

(27a) Where pre-selection of candidates is based on election or voting procedures, for example by workers or their representatives, the procedures throughout the whole process should be adjusted in order to contribute to the attainment of the objective of increased gender balance on the board of directors as a whole, while ensuring that the sex of the director elected in such a procedure is not in any way predetermined.

Amendment  39

Proposal for a directive

Recital 30

Text proposed by the Commission

Amendment

(30) Member States should provide for effective, proportionate and dissuasive sanctions for breaches of this Directive, which could include, inter alia, administrative fines and 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).

(30) Member States should provide for effective, proportionate and dissuasive sanctions for breaches of the requirements for an open and transparent procedure set out in this Directive, which could include, inter alia, administrative fines, exclusion from public calls for tenders, partial exclusion from the award of funding from the Union's Structural Funds, and 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). It should be possible for Member States to go beyond the non-exhaustive list of sanctions provided for in this Directive and to add, inter alia, the forced dissolution of the company concerned, ordered by a competent judicial body in full respect of proper procedural safeguards, in cases of serious and repeated infringements by that company.

Amendment  40

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

(31) Since the gender composition of the workforce has a direct impact on the availability of candidates of the under-represented sex, Member States may provide that where the members of the under-represented sex make up less than 10 per cent of the workforce the company concerned should not be required to meet the objective laid down in this Directive.

deleted

Amendment  41

Proposal for a directive

Recital 32

Text proposed by the Commission

Amendment

(32) Since listed companies should aim to increase the proportion of the under-represented sex in all decision-making positions, Member States may provide that the objective laid down in this Directive should be considered to be 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.

(32) Since listed companies should aim to increase the proportion of the under-represented sex in all decision-making positions, Member States may provide that the objective laid down in this Directive should be considered to be 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. Such companies should, however, be required to continue to set out in their annual reports and on their websites the gender balance among executive and non-executive directors, and their policies in this area, in accordance with Article 5 of this Directive.

Amendment  42

Proposal for a directive

Recital 34

Text proposed by the Commission

Amendment

(34) Member States should require listed companies to provide information on the gender composition of their boards as well as information on how they managed to meet 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 gender balance among directors. Such information should be published and, where the company in question has not met the objective, it should include a description of the measures that it has taken so far and intends to take in the future in order to meet the objective.

(34) Member States should require listed companies to provide information on the gender composition of their boards as well as information on how they managed to meet 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 gender balance among directors. Such information should be included in the company's annual report and published in an appropriate and easily accessible manner on its website and, where the company in question has not met the objective, should include a comprehensive description of the concrete measures that it has taken so far and intends to take in the future in order to meet the objective. Furthermore, companies that have failed to attain the objectives or to fulfil the commitments given by them should provide a justification of the reasons for their failure to do so, as well as a description of the concrete measures which they have taken so far, and which they intend to take in the future, in order to meet those objectives and fulfil those commitments.

Amendment  43

Proposal for a directive

Recital 37

Text proposed by the Commission

Amendment

(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 gender representation among non-executive board members across the Union in line with the objectives set out in this Directive will not be achieved 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.

(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 gender representation among non-executive board members across the Union in line with the objectives set out in this Directive will not be achieved 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, closing the existing gender pay gap and improvement of 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.

Amendment  44

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(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 achieve those objectives. Member States are given sufficient freedom to determine how the objectives laid down in this Directive should best be achieved taking national circumstances into account, in particular rules and practices concerning recruitment for board positions. This Directive does not interfere with the possibility for companies to appoint the most qualified board members, and it grants a sufficiently long period of adaptation for all listed companies.

(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 achieve those objectives. Member States are given sufficient freedom to determine how the objectives laid down in this Directive should best be achieved taking national circumstances into account, in particular rules and practices concerning recruitment for board positions. This Directive does not interfere with the possibility for companies to appoint the most qualified board members, and it grants a flexible framework and a sufficiently long period of adaptation for all listed companies.

Amendment  45

Proposal for a directive

Recital 39

Text proposed by the Commission

Amendment

(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.

(39) In accordance with the principle of proportionality, the objective to be met by listed companies should be limited in time and should 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. This Directive is due to expire on 31 December 2028. The Commission should assess, in its review, whether there is a need to extend the duration of the Directive beyond that period. Member States should cooperate with social partners and civil society in order to efficiently inform them about the significance, transposition and implementation of this Directive. Information campaigns would significantly contribute to the raising of awareness among non-listed companies and encourage them to achieve gender balance proactively. Member States should be encouraged to exchange experiences and good practices regarding the transposition and implementation of this Directive.

Amendment  46

Proposal for a directive

Article 1

Text proposed by the Commission

Amendment

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.

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 effective measures aimed at accelerated progress towards gender balance while allowing companies sufficient time to make the necessary arrangements.

Amendment  47

Proposal for a directive

Article 2 – point 1

Text proposed by the Commission

Amendment

(1) ‘listed company’ means a company incorporated in a Member State whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC, in one or more Member States;

(1) 'listed company' means a company which has its seat in a Member State and whose securities are admitted to trading on a regulated market within the meaning of Article 4(1)(14) of Directive 2004/39/EC, in one or more Member States;

Amendment  48

Proposal for a directive

Article 4 – paragraph 1

Text proposed by the Commission

Amendment

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.

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 adjust their recruitment, including vacancy announcements calling for applications, pre-selection, selection and appointment procedures in such a way that they effectively contribute to the attainment of the said percentage at the latest by 1 January 2020 or at the latest by 1 January 2018 in the case of public undertakings. In particular, Member States shall ensure that companies select the most qualified candidates for a board position from a gender-balanced selection pool and on the basis of a comparative analysis of the qualifications by applying pre-established, clear, neutrally formulated, non-discriminatory and unambiguous criteria. In the case of an election procedure, Members States shall ensure that companies guarantee gender diversity in the composition of the shortlist of candidates while ensuring that the sex of the non-executive director elected in this procedure is not in any way predetermined.

 

In order to attain the objective of 40 % and in accordance with Article 23(2) of the Charter of Fundamental Rights of the European Union, Member States shall ensure that, at every stage in the recruitment, selection or appointment procedures for non-executive directors, priority is 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.

Amendment  49

Proposal for a directive

Article 4 – paragraph 2

Text proposed by the Commission

Amendment

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.

2. The number of non-executive director positions necessary to meet the objective laid down in paragraph 1 shall be at least 40 per cent. If the non-executive board consists of only three board members, the proportion one to two shall suffice.

Amendement  50

Proposal for a directive

Article 4 – paragraph 3

Text proposed by the Commission

Amendement

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.

deleted

Amendment  51

Proposal for a directive

Article 4 – paragraph 4

Text proposed by the Commission

Amendment

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.

4. Member States shall ensure that listed companies are obliged to at least disclose to an unsuccessful candidate, while respecting candidates' anonymity in accordance with Union law on data protection, the number and gender of the candidates in the selection pool, the qualification criteria upon which the selection or appointment 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.

Amendment  52

Proposal for a directive

Article 4 – paragraph 5

Text proposed by the Commission

Amendment

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.

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 who considers him- or herself wronged because the provisions of paragraph 1 have not been applied to him or her establishes, before a court or other competent body, facts from which it may be presumed that the 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 1.

 

This paragraph shall not prevent Member States from introducing rules of evidence which are more favourable to plaintiffs.

Amendment  53

Proposal for a directive

Article 4 – paragraph 6

Text proposed by the Commission

Amendment

6. Member States may provide that listed companies where the members of the underrepresented sex represent less than 10 per cent of the workforce are not subject to the objective laid down in paragraph 1.

deleted

Amendment  54

Proposal for a directive

Article 4 – paragraph 6 a (new)

Text proposed by the Commission

Amendment

 

6a. Where the selection referred in paragraph 1 is made through a vote of shareholders or employees, companies shall ensure that voters are properly informed regarding the measures provided for in this Directive, including sanctions for non-compliance by the company.

Amendment  55

Proposal for a directive

Article 5 – paragraph 2

Text proposed by the Commission

Amendment

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.

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 easily accessible manner on their website and in their annual report.

Amendment  56

Proposal for a directive

Article 5 – paragraph 3

Text proposed by the Commission

Amendment

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.

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, it shall provide a statement of the reasons for its failure to attain those objectives or to fulfil those commitments and a comprehensive description of the measures which the company has adopted, or which it intends to adopt, in order to meet the objectives or commitments. That statement of reasons shall form part of the information referred to in paragraph 2.

Amendment  57

Proposal for a directive

Article 5 – paragraph 4

Text proposed by the Commission

Amendment

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.

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. To that end, Member States shall efficiently collaborate with social partners and civil society.

Amendment  58

Proposal for a directive

Article 6 – paragraph 1

Text proposed by the Commission

Amendment

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.

1. Member States shall lay down rules on sanctions applicable to infringements of the requirements for an open and transparent procedure set out in Article 4(1) and shall take all necessary measures to ensure that they are applied.

Amendment  59

Proposal for a directive

Article 6 – paragraph 2 – introductory part

Text proposed by the Commission

Amendment

2. The sanctions must be effective, proportionate and dissuasive and may include the following measures:

2. The sanctions must be effective, proportionate and dissuasive and shall at least include the following measures:

Amendment  60

Proposal for a directive

Article 6 – paragraph 2 – point a a (new)

Text proposed by the Commission

Amendment

 

(aa) exclusion from public calls for tenders;

Amendment  61

Proposal for a directive

Article 6 – paragraph 2 – point a b (new)

Text proposed by the Commission

Amendment

 

(ab) partial exclusion from the award of funding from the Union's Structural Funds;

Amendment  62

Proposal for a directive

Article 7

Text proposed by the Commission

Amendment

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 companies incorporated in their national territory, provided those provisions do not create unjustified discrimination, nor hinder the proper functioning of the internal market.

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 companies incorporated in their national territory, provided those provisions do not create unjustified gender discrimination or any other form of discrimination or hinder the proper functioning of the internal market.

Amendment  63

Proposal for a directive

Article 8 – paragraph 3 – subparagraph 2

Text proposed by the Commission

Amendment

The Member State in question shall notify this information to the Commission.

The Member State in question shall notify this information to the Commission. The Commission shall inform the European Parliament and the Council of such notification. The suspension shall be automatically lifted if insufficient progress is made towards attainment of the aim of this Directive, which shall be deemed to be the case if the percentage of the under-represented sex is lower than 30 % by 2017 or by 2015 in the case of public undertakings.

Amendment  64

Proposal for a directive

Article 9 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. The Commission shall submit an evaluation report by 1 July 2017 on the implementation of the requirements for listed companies referred to in Articles 4(1) and 5(1) and (2), on the basis of the reports submitted by the Member States pursuant to paragraph 1. In addition, the Commission's report shall include an account of the gender balance situation at board level and at management level of non-listed companies that are above the SME threshold as defined in Article 2.

Amendment  65

Proposal for a directive

Article 9 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

1b. The Commission shall present a report to the European Parliament and the Council on the way in which the principles of this Directive are applied by all Union institutions and agencies and are incorporated into the rules governing their internal staffing procedures. To that end, all Union institutions and agencies shall report to the Commission at the latest by 31 December 2018, and thereafter annually, on their gender statistics and on the progress made. The Commission shall forthwith make such reports public on its website. Where appropriate, the Commission' report shall be accompanied by a legislative proposal extending the scope of this Directive to cover all Union institutions and agencies.

Amendment  66

Proposal for a directive

Article 9 – paragraph 4

Text proposed by the Commission

Amendment

4. In its report, the Commission shall assess whether, in the light of developments in the representation of men and women in 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 amend it.

4. In its report, the Commission shall assess whether, in the light of developments in the representation of men and women in 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 amend it. It shall also examine whether the scope of this Directive should be extended to cover non-listed public undertakings which do not fall within the definition of SME, non-listed large undertakings and executive directors of listed companies.


EXPLANATORY STATEMENT

Background

The co-rapporteurs welcome the proposal as a follow-up to Parliament's Resolution "Women and Business Leadership" adopted in 2011 and given the persisting inequalities between men and women in companies' top positions. The proposed Directive contributes to the safeguard of the principle of equality as a founding value of the EU and constitutes a concretisation of the EU's strategy for gender equality at all levels and in all sectors of economic life, as it has been reminded on many occasions by the European Parliament.

Back in 1984 and 1996, the European Council issued two Recommendations encouraging the private sector to increase the presence of women at all levels of decision-making and called upon the European Commission to take steps in this regard. In March 2011, the Commission started a dialogue with major EU listed companies and issued a "Women on the Board Pledge for Europe" that companies could sign in order to commit themselves to raise female representation on their boards to 30% by 2015 and 40% by 2020. Though, after one year, only 24 companies had signed the pledge.

All in all, progress in increasing women's presence has been very slow(1) throughout the EU and the rate of improvement has been unequal, unevenly ranging from 5% to 25%. For these reasons, the co-rapporteurs are convinced that the European legislator should adopt an adequate legislation.

The co-rapporteurs believe that Article 157(3) TFEU is the appropriate legal basis for binding measures aimed at ensuring the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation. This was confirmed by the Legal Affairs Committee in its meeting of 20 June 2013.

The importance of adopting EU legislation

Over the years many Member States have taken initiatives in order to efficiently address the issue of gender balance. Some Member States have tried ways of improving low rates of female involvement in boards by adopting legislation(2) thereby considerably speeding up the process of achieving a balanced representation of women and men in boards. Others have merely encouraged the proactive initiatives and measures taken by companies, which have proved very useful but still insufficient in order to reach tangible results. Hence, it is worth noting there is heterogeneity throughout the EU, both in terms of measures and results.

In France, the proportion of women on the boards of French CAC 40 companies increased by 10 percentage points to 22,3 % between October 2010 and January 2012. In Italy, which adopted a law in 2011 requiring listed and state-owned companies to have women in a third of management and supervisory- board positions by 2015, there was an increase of 4.9 percentage points between January 2012 and October 2012 in the number of women on the boards of listed companies.

In other Member States, national self-regulation, voluntary targets and corporate governance initiatives (such as codes of conducts(3)) were aimed at encouraging companies to appoint more women in top-level positions.

The positive effects of binding targets are a tangible proof that companies can comply with measures assuring a gender-balanced recruitment. Furthermore, it should be noted that in Member States where no binding measures have been taken companies are still far from reaching acceptable gender balance.

A solid common framework is essential for companies engaged in cross-border activities but also for the mobility and career prospects in decision bodies of qualified men and women workers.

Finally, in order to efficiently address the challenges the EU has to face in a vulnerable context of economic crisis, all human capital has to be utilised in order to achieve growth, competitiveness and greater financial performance of companies. Measures aiming at achieving greater gender balance within boards contribute to that goal.

The proposed Directive

The proposal, founded on the principles of equality, transparency, meritocracy justice, common procedures and goals, has a strong added value. It should be noted that complying with the obligations set by the Directive will generate limited administrative burdens for the companies. The Directive will enhance social justice in the labour market and will contribute to economic growth by fully utilising all available resources, skills and strengths so that EU human potential is effectively taken advantage of.

Furthermore, this proposal is in line with the principles of proportionality and subsidiarity.

Purpose of the Directive:

The proposal conveys a clear objective to reach 40% of the under-represented sex in non-executive board-member positions in all publicly listed companies, and an adequate framework for Member States and companies to take efficient procedures in order to promote gender-balance on boards of all listed companies. It will improve corporate governance by offering women greater possibilities to take on a leading decisional position and enhance companies' economic performances with their skills.

Scope of the Directive:

The co-rapporteurs take note that the proposed Directive puts forward a temporary measure to establish a clear common strategy for all Member States in order to reach a common target: attaining the objective of a presence of at least 40% of the under-represented sex among non-executive directors by 2020 in private listed companies and by 2018 in State owned listed companies.

The Directive allows Member States to take national specificities into consideration while transposing it. Hence, Member States should closely collaborate with companies and stakeholders in order to establish the adequate procedures and mechanisms that will allow reaching the 40% target while respecting the deadline set by the Directive.

Member States that already have an effective system in place will be able to keep it provided it is equally efficient as the proposed system in attaining the objective of a presence of at least 40% of the under-represented sex in boards. Furthermore, Member States will have to lay down appropriate and dissuasive sanctions for companies in breach of the Directive.

If the objective of 40% is not reached by 2018 for companies fully or partly owned by the State and by 2020 for private companies, Member States ensure that the objective of enhanced gender-balance in companies is met.

Specific provisions concerning listed companies which are public undertakings

The imperatives of justice and transparency are stronger concerning fully or partly State owned companies and enterprise, which can be called public undertakings in the sense of Art. 2 (b) of Commission Directive 2006/111/EC of 16 November 2006. This means any undertaking over which the public authorities may exercise directly or indirectly a dominant influence by virtue of their ownership of it, their financial participation therein, or the rules which govern it Given the economic and social responsibility of such companies, enhanced transparency and equality are essential. Furthermore, it is undeniable that the public sector has a role model function in society and should reflect meritocracy and social justice. Member States exercise a dominant influence over such companies and therefore have more instruments to bring about the change more rapidly. In this sense, gender equality and an increased participation of women in economic decision making is an essential goal of State owned companies. Hence, the proposed Directive imposes that such companies should comply with the obligation of balanced representation in boards sooner than the private sector, specifically by 2018.

Main points of the co-rapporteurs' proposal:

Extension of the scope:

The co-rapporteurs stress the importance of extending the scope of the Directive in order to efficiently increase its effectiveness and impact in all listed companies.

- Independently from their size, all listed companies should comply with the objective set by the Directive. Such a requirement is justified both by their economic and social responsibilities and their economic importance. However, after careful consideration, the rapporteurs agreed to keep the exception for SMEs as proposed by the Commission, while at the same time encouraging Member States to put in place policies to support and incentivise SMEs to significantly improve gender balance at all levels of management and on company boards.

- Inclusion of single gender dominated sectors: listed companies operating in all sectors, should comply with the objective set by the Directive, given their economic importance and economic and social responsibilities.

- In response to the many requests, the rapporteurs also agreed to include a review clause calling on the Commission to examine if the scope of the Directive can be extended to non-listed public undertakings which don't fall under the definition of SME, to non-listed large undertakings as well as to executive directors of listed companies in the report foreseen in Article 9.

Binding procedure:

The co-rapporteurs underline that it should be explicitly stated that the Directive sets an obligation of means to Member States and companies to achieve the goal by adopting effective measures..

Increased transparency in the nomination/election procedure of non-executive board members:

The co-rapporteurs strongly support enhanced transparency in the nomination and election procedure of board members as it is the only way to efficiently guarantee diversity and selection on the basis of meritocratic criteria.

Balanced Representation:

In order to achieve the aim of gender equality, the co-rapporteurs believe that companies should take the necessary measures in order attain a representation of at least 40% of the under-represented sex. Where the non-executive board consists of only three board members, and a realisation of a quota of 40% for either sex is therefore impossible, a proportion of one to two shall be sufficient.

Failure to comply:

The co-rapporteurs believe that companies who failed to comply should provide a justification on the reasons for not reaching the objectives or commitments and what concrete measures are to be adopted in order to efficiently guarantee that the objective of enhanced gender-balance is met.

Sanctions:

Furthermore, the co-rapporteurs underline that Member States must provide that listed companies who do not establish, apply or respect the foreseen procedures for the appointment or the election of non-executive directors shall be subject to effective, proportionate and dissuasive sanctions. They propose to add the exclusion from public call for tenders to the list of possible sanctions proposed by the Commission to which partial exclusion from the award of funding from the European structural funds was also added.

The co-rapporteurs underline the importance of an efficient follow-up and review. To that end, it is essential for Member States to communicate as of 2017 and every two years thereafter a report on the implementation of the Directive.

Enhancing the Directive's information and efficiency:

The co-rapporteurs are convinced that awareness and communication campaigns will have to be organised in order to properly and efficiently inform stakeholders and citizens on the impact of the Directive on both economy and society. These information campaigns will be essential so as to raise awareness among non-listed companies and encourage them to achieve gender-balance proactively.

(1)

From 2003 to 2011, the share of women on boards has risen from 8,5 % to 13,7 %, an increase of 5,2 percentage points in a little over eight years. This represents a slow average rate of change of around 0,6 percentage points per year. (Source: EC Progress Report: http://ec.europa.eu/justice/gender-equality/files/women-on-boards_en.pdf)

(2)

Belgium, France and Italy enacted binding quotas with sanctions, while the Netherlands and Spain enacted quotas without sanctions. In addition, Denmark, Finland, Greece, Austria and Slovenia have exacted rules concerning state-owned companies. (Source: EC Progress Report )

(3)

In Austria, Belgium, Denmark, Finland, France, Germany, Luxembourg, the Netherlands, Poland, Spain, Sweden and the UK, the national corporate governance codes encourage, to a different extent, gender diversity on company boards.


OPINION OF THE COMMITTEE ON LEGAL AFFAIRS ON THE LEGAL BASIS

Mr Klaus-Heiner Lehne

Chair

Committee on Legal Affairs

BRUSSELS

Mr Mikael Gustafsson

Chair

Committee on Women's Rights and Gender Equality

BRUSSELS

Subject:           Opinion on the legal basis for the proposal for a Directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges (COM(2012)0614 – C7-0382/2012 – 2012/0299(COD))

Dear Chairs,

At its meeting of 24 April 2013, the Legal Affairs Committee decided to take up on its own initiative, under Rule 37(3) of Parliament's Rules of Procedure, the question whether it is appropriate to put forward Article 157(3) TFEU as the legal basis for the proposal for a directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges (COM(2012)0614).

The Committee on Legal Affairs and the Committee on Women's Rights and Gender Equality (FEMM) are joint committees under Rule 51 for this proposal. FEMM has decided to support JURI' s own-initiative evaluation of the legal base chosen by the European Commission and communicated this to JURI by letter of 24 April 2013.

Background

1. The proposal

The proposed directive establishes measures aimed at accelerated progress towards gender balance among the non-executive directors of listed companies (Article 1).

The proposal applies to listed companies, excluding SMEs (Article 3). Article 4(1) of the proposal requires Member States to 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."

In order to attain this objective, Member States shall ensure that, in the selection of non-executive directors, priority is given to the candidate of the under-represented sex if that candidate is equally qualified as a candidate of the other sex, unless an objective assessment of the individual candidate tilts the balance in favour of the candidate of the other sex (Article 4(3)). In case an unsuccessful candidate establishes facts from which it may be presumed that that candidate was equally qualified as the appointed candidate of the other sex, Article 4(5) puts the burden of proof as regards non-infringement of this rule on the listed company.

The proposal also includes, as an additional measure, a provision on a so-called "flexi quota" for executive boards (Article 5(1)), i.e. listed companies are to undertake individual commitments regarding gender-balanced representation of both sexes among executive directors, to be achieve by the same deadline as the 40 % objective for non-executive directors.

In case listed companies do not meet the objectives for non-executive directors or their own individual commitment as regards executive directors, they have to report on the reasons for this and also to describe the measures they have adopted or intend to take (Article 5(3)).

The proposal also contains a provision on sanctions (Article 6), which mainly spells out that they must be "effective, proportionate and dissuasive" and may include administrative fines or the nullity or annulment declared by a judicial body of the appointment or election of a non-executive director contrary to the national provisions implementing Article 4(1) of the Directive.

Article 7 provides that the provisions of the Directive are minimum requirements. Article 8 contains the transposition provision and also states that those Member States which already have taken measures to ensure gender balance among non-executive directors, may suspend the procedural requirements relating to appointment of non-executive directors under the Directive if they can prove that the objective of 40 % of the under-represented sex can be achieved by their domestic measures.

2. The legal bases of the proposal

The Commission proposal is based on Article 157(3) TFEU, which reads as follows:

"(3) The European Parliament and the Council, acting in accordance with the ordinary legislative procedure, after consulting the Economic and Social Committee, shall adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, including the principle of equal pay for equal work or work of equal value."

Analysis

1. Principles established by the Court

Certain principles emerge from the case law of the Court as regards the choice of legal basis. First, in view of the consequences of the legal basis in terms of substantive competence and procedure, the choice of the correct legal basis is of constitutional importance(1). Secondly, under Article 13(2) TEU, each institution is to act within the limits of the powers conferred upon it by the Treaty(2). Thirdly, according to the case-law of the Court of Justice, "the choice of legal basis for a Community measure must rest on objective factors amenable to judicial review, including in particular the aim and the content of the measure"(3).

2. The Commission's choice of legal basis

The Commission explains its choice of legal basis as follows: "Article 157(3) TFEU is the legal basis for any binding measures aimed at ensuring the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, including positive action."(4)

In the impact assessment accompanying the Commission proposal, it further explains: "The EU's right to act in issues of gender equality in employment and occupation follows from Article 157(3) TFEU. This provision is the specific legal basis for any binding measures aiming at ensuring the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation."(5)

3. Objective and content of the proposed directive

The objective of the proposed directive is "to ensure a more balanced representation of men and women among the non-executive directors of listed companies" (Article 1).

The main elements of the proposal aimed at achieving this objective are rules on the gender balance of members of company boards not exercising management functions (non-executive board members), in particular a 40 % objective and procedural rules The measures are set out in detail above (under "Background", point 1).

Recital 14 of the proposed Directive explains in more detail that "While this Directive does not aim to harmonise national law on the selection procedures 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 take appointment decisions for non-executive directors on the basis of an objective comparative assessment of the qualifications of candidates in terms of suitability, competence and professional performance is necessary in order to attain gender balance among non-executives directors. [...]".

4. Scope of application of Article 157(3) TFEU

Article 157(3) TFEU allows the European Parliament and the Council to "adopt measures to ensure the application of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation". In order to assess whether Article 157(3) TFEU can be the appropriate legal basis for the proposal, it needs to be determined whether the measures proposed for the specific professional group in question fall under "matters of employment and occupation" as referred to in this provision.

a) Persons covered by the proposed directive

As a starting point, the characteristics of the persons covered by the proposed directive should be identified: the proposal aims at a broad definition of "director", "non-executive director" and "executive director"(6) and sets out to cover the various systems of board structures for listed companies that exist in the Member States ("two-tier", "one-tier" and mixed systems)(7). However, it can safely be said that the board members covered by the proposed directive perform tasks for a company (supervisory tasks in the case of non-executive board members, and managerial tasks in the case of executive board members) in exchange for remuneration. Further, they have a relationship to the company in which they are installed and removed from their positions according to procedures varying throughout the Member States.

b) "matters of employment and occupation" under Article 157(3) TFEU

As a second step, when attempting to define what "matters of employment and occupation" under Article 157(3) TFEU encompass, one comes across the concept of "worker" which has been defined by the Court of Justice in settled case law(8), including in matters on equal treatment of men and women. The Court has held that this concept "may not be interpreted differently according to each national law but has a Community meaning" and that it "must be defined in accordance with objective criteria which distinguish the employment relationship by reference to the rights and duties of the persons concerned". The Court has identified as "essential feature" of an employment relationship that "for a certain period of time, a person performs services for and under the direction of another person, in return for which he receives remuneration".

Moreover, the Court has held that "the sui generis nature of the employment relationship under national law cannot have any consequence in regard to whether or not the person is a worker for the purposes of Community law"(9).

Against this background, it does not seem to be excluded that board members, although they might obtain their positions by way of different procedures in different Member States’ systems, could be considered as being in an employment relationship.

Furthermore, the Court’s judgment in Case C-232/09 Danosa v LKB Līzings SIA(10) concerning the question whether an executive board member of a capital company is to be considered as a worker under the Pregnant Workers Directive(11) appears to be relevant here. In this case, the Court held that "board members who, in return for remuneration provide services to the company which has appointed them and of which they are an integral part, who carry out their activities under the direction or control of another body of that company and who can, at any time, be removed from their duties without such removal being subject to any restriction, satisfy prima facie the criteria for being treated as workers within the meaning of the case-law of the court.(12)" The relationship of non-executive board members to the respective company appears to show the characteristics evoked by the Court, as they are brought into their position – regardless of the procedure, which might be recruitment, selection or appointment or a combination of these – and might also be removed from that position by another body of that company, e.g. by the shareholders. They could therefore qualify as workers (given that the other conditions enumerated by the Court are fulfilled).

It is also interesting to note, that the Court, also in the Danosa judgment, states that, for the purposes of protection against discrimination on grounds of sex, even where a board member would not fulfil the conditions defining a worker under EU law – and thus not fall within the scope of Directive 92/85/EEC or of Directive 76/207/EEC(13), this person would fall "to the extent that the referring court categorises her as ‘a self-employed person’ – within the scope of Directive 86/613(14), which applies to self-employed persons and which, as is stated in Article 1 of that directive, supplements Directive 76/207 as regards the application of the principle of equal treatment for those workers"(15). Even though the Court obviously only ruled on matters covered by those directives, it is worth noting that a board member would fall into either one or the other category as it does not consider at all the possibility that this professional group is being caught by the provisions in question.

Against this background, there seems to be strong evidence that non-executive board members fall within the scope ratione personae of Article 157(3) TFEU, in particular given that they are protected – regardless whether as workers or self-employed persons –against discrimination under the existing acquis by legislation adopted on legal bases preceding and corresponding to Article 157(3) TFEU. It would therefore seem illogical if this same legal basis were not to be available for new legislation aimed at improving gender equality such as the proposed measure under consideration.

It is worth analysing more closely the measures already adopted by the Union legislator under Article 157(3) TFEU (and its predecessor Article 141(3) EC Treaty):

– Directive 2006/54/EC on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment(16) contains in its Article 14 rules for "conditions for access to employment, to self-employment or to occupation […] whatever the branch of activity and at all levels of the professional hierarchy".

– Directive 2010/41/EU on the application of the principle of equal treatment between men and women engaged in an activity in a self-employed capacity(17), which is based on Article 157(3) TFEU, applies pursuant to its Article 2 not only to self-employed workers, i.e. "persons pursuing a gainful activity for their own account", but also to their spouses habitually participating in the activities of the self-employed worker.

– Article 4 of the same Directive 2010/41/EC prohibits discrimination on grounds of sex in relation to the "establishment, equipment or extension of a business or the launching or extension of any other form of self-employed activity".

These examples show that the expression "matters of employment and occupation" has been interpreted by the legislator as referring to all kinds of professional activities and all spheres of professional life. This corresponds to the broad understanding of the relevant concepts by the Court as outlined above.

c) Article 157(3) TFEU as part of EU social policy

However, in compliance with the principle of conferral as set out in Article 4(1) TFEU and 5(1) TFEU, and also with Article 51(2) of the Charter of Fundamental Rights, no interpretation of the Union’s competences can have the effect of extending the Union’s competence beyond the limits which the Treaty provides. In this context, attention should be paid to the fact that Article 157(3) TFEU forms part of Title X of Part Three of the TFEU, which deals with the Union’s social policy. Its objectives are described in Article 151 as "the promotion of employment, improved living and working conditions."

Against this background, it might be argued that, as the proposed directive concerns matters relating to the composition of company boards which form part of the company law of the Member States, it could not be based on Article 157(3) TFEU as a legal basis forming part of the Union’s social policy. However, it is important to note that the Commission clearly situates the proposal in a social policy context. It presents the proposal as a positive action measure intended to ensure respect for the fundamental principle of equality between men and women in EU law and thus to increase gender balance on boards for a number of reasons laid out in its recitals such as the "efficient use of human capital" (recital 7), "labour market equality" (recital 9), and "closing both the gender employment gap and the gender pay gap" (recital 9).

d) Dual legal basis?

That the proposal, at the same time, also refers to economic and corporate governance reasons underpinning the measures proposed (see, for instance, recitals 5 and 7), does not stand in contradiction to this. Equally, the presence of these elements does not require recourse to a dual legal basis. As regards multiple legal bases, the Court has held that, if examination of a EU measure reveals that it pursues a twofold purpose or that it has a twofold component and if one of those is identifiable as the main or predominant purpose or component, whereas the other is merely incidental, the act must be based on a single legal basis, namely that required by the main or predominant purpose or component(18). On the other hand, where a measure has several contemporaneous objectives or components which are indissolubly linked with each other without one being secondary and indirect in respect of the others, the measure must be based on the various relevant Treaty provisions(19).

Ensuring the application of the principle of equal opportunities and equal treatment for men and women in matters of employment and occupation clearly constitutes the main focus of the proposal. It also needs to be noted that the proposal does not put forward any proposal to harmonise company law, on the contrary, it is conceived to apply within the Member States’ company laws and irrespective of the specific national systems and thus carefully mirrors the different systems that may exist in Member States. A reconsideration of this question would appear appropriate if the focus of the measures were to be shifted perceptibly during the legislative procedure.

6. Article 157(4) TFEU as legal basis

As it has been claimed that the appropriate legal basis for measures of the proposed type should be Article 157(4) TFEU, it should be emphasised that this provision does not constitute a legal basis, but merely provides, "with a view to ensuring full equality in practice between men and women in working life", that "the principle of equal treatment shall not prevent any Member State from maintaining or adopting measures providing for specific advantages in order to make it easier for the underrepresented sex to pursue a vocational activity or to prevent or compensate for disadvantages in professional careers". This provision therefore allows Member States to take specific measures, but there is no evidence that it was intended to prevent the EU legislator from taking any measures.

7. Requirements for positive action measures

Finally it should be assessed whether the measures proposed correspond to the framework set by the Charter of Fundamental Rights and the case-law of the Court applying to positive action measures. The Charter, in principle, prohibits any discrimination based on sex on its Article 21(1), but also recognizes in Article 23 that the principle of equality does not prevent the adoption of measures providing for specific advantages in favour of the under-represented sex. According to settled case law, the guarantee of equal access to employment and of equal promotion opportunities for men and women does not preclude measures to enhance equal opportunity for men and women which are intended, inter alia, to eliminate actual instances of inequality which affect women's opportunities(20). However, this exception does not authorise measures which guarantee absolute and unconditional priority for women in the matter of promotion or employment. Where both male and female candidates are equally qualified and where there are fewer women than men at the level of the relevant post, priority may be given to the promotion of female candidates if it is not excluded on account of one or more criteria specific to individual candidates – which may not be such as to discriminate against female candidates – to tilt the balance in favour of some male candidates(21).

The Directive as it is proposed contains in Article 4(3) a provision that requires, in general, that priority is to 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, but at the same time allows for an "objective assessment taking account of all criteria specific to the individual candidates" to "[tilt] the balance in favour of the candidate of the other sex." The required possibility to take account of the individual situation is thus provided for.

Legal Affairs Committee recommendation

The Legal Affairs Committee considered the above question at its meeting of 20 June 2013. At this meeting, it accordingly decided, with 11 votes in favour, 6 against and 4 abstentions(22), to recommend that the appropriate legal basis for the proposal for a Directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges should be Articles 157(3) TFEU.

Yours sincerely,

(1)

Opinion 2/00 Carthagna Protocol [2001] E.C.R. I-9713, para. 5; Case C-370/07 Commission v. Council [2009] E.C.R. I-8917, paras 46-49; Opinion 1/08, General Agreement on Trade in Services [2009] ECR I-11129, para. 110.

(2)

Case C-403/05 Parliament v. Commission [2007] E.C.R. I-9045, para. 49, and the case-law cited therein.

(3)

See most recently Case C-411/06 Commission v Parliament and Council [2009] E.C.R. I-7585.

(4)

COM(2012)0614, Explanatory Memorandum, p. 9.

(5)

SWD(2012)0348, p. 24. In this context, the Commission also does not rule out the possibility of making recourse to Article 50(1) TFEU, this being the legal basis for adopting measures aimed at achieving an Internal Market in company law, as an additional legal basis to supplement Article 157(3) TFEU.

(6)

Article 2 of the proposal defines "non-executive director" as "any member of a unitary board other than an executive director and any member of a supervisory board in a dual board system"(Article 2, point (5)), whereas "executive director" is defined as "any Member of a unitary board who is engaged in the daily management of the company and any member of the managerial board in a dual board system" (Article 2, point (4)).

(7)

COM(2012)0614, Explanatory memorandum, p. 11.

(8)

Case 66/85 Lawrie-Blum [1986] E.C.R 2121, para. 16 and 17; Case C-176/96 Lehtonen and Castors Braine [2000] E.C.R I-2681, para. 45; Case C-138/02 Collins [2004] E.C.R I-2703, para. 26; Case C-456/02 Trojani [2004] E.C.R I-7573, para. 15; Case C-392/05 Alevizos [2007] E.C.R I-03505, para. 67); Case C-166/06 Sari Kiiski v Tampereen kaupunki [2007] E.C.R. I-07643, para. 25; Case C-94/07 Andrea Raccanelli v Max-Planck-Gesellschaft zur Förderung der Wissenschaften eV [2008] I-05939, para. 33.

(9)

Case 53/81 Levin [1982] E.C.R 1035, para. 16; Case 344/87 Bettray [1989] E.C.R 1621, para. 15 and 16; Case C-188/00 Kurz [2002] E.C.R I-10691, paragraph 32; and Trojani, paragraph 16)

(10)

[2010] E.C.R. I-11405.

(11)

Council Directive 92/85/EEC of 19 October 1992 on the introduction of measures to encourage improvements in the safety and health at work of pregnant workers and workers who have recently given birth or are breastfeeding (tenth individual Directive within the meaning of Article 16 (1) of Directive 89/391/EEC) (OJ L 348, 28.11.1992, p. 1).

(12)

Danosa v LKB Līzings SIA, ibid., para. 51.

(13)

Council Directive 76/207/EEC of 9 February 1976 on the implementation of the principle of equal treatment for men and women as regards access to employment, vocational training and promotion, and working conditions, OJ L 39, 14.2.1976, p. 40.

(14)

Council Directive 86/613/EEC of 11 December 1986 on the application of the principle of equal treatment between men and women engaged in an activity, including agriculture, in a self-employed capacity, and on the protection of self-employed women during pregnancy and motherhood, OJ L 359, 19.12.1986, p. 56.

(15)

Danosa v LKB Līzings SIA, ibid., para. 70.

(16)

OJ L 204, 26.7.2006, p. 23.

(17)

OJ L 180, 15.7.2010, p. 1.

(18)

Case C-42/97 Parliament v Council [1999] E.C.R. I-868, paras. 39-40; Case-C 36/98 Spain v Council [2001] E.C.R. I-779, para. 59; Case C-211/01 Commission v Council [2003] E.C.R. I-8913, para. 39.

(19)

Case C-165/87 Commission v Council [1988] E.C.R. 5545, para. 11; Case C-178/03 Commission v. European Parliament and Council [2006] E.C.R. I-107, paras. 43-56.

(20)

Case C-476/99 Lommers [2002] E.C.R. I-2891, paras. 31-50; Case C-366/99 Griesmar [2001] E.C.R. I-9383, paras. 62-67:

(21)

Case C-409/95 Marschall [1997] E.C.R: I-6363, paras. 21-35; Case C-158/97 Badeck and Others [2000] E.C.R. I-1875, paras 13-67; Case C-407/98 Abrahamsson and Anderson [2000] E.C.R. I-5539, paras 39-65.

(22)

The following were present for the final vote: Klaus-Heiner Lehne (Chair, replacing Standing rapporteur), Evelyn Regner (Vice-Chair), Raffaele Baldassarre (Vice-Chair), Françoise Castex (Vice-Chair), Sebastian Valentin Bodu (Vice-Chair), Luigi Berlinguer, Sergio Gaetano Cofferati, Christian Engström, Marielle Gallo, Lidia Joanna Geringer de Oedenberg, Sajjad Karim, Eva Lichtenberger, Antonio Masip Hidalgo, Jiří Maštálka, Alajos Mészáros, Angelika Niebler, Bernhard Rapkay, Dimitar Stoyanov, Rebecca Taylor, Alexandra Thein, Axel Voss, Tadeusz Zwiefka and Frédérique Ries (pursuant to Rule 187(2)).


OPINION of the Committee on Economic and Monetary Affairs (Klaus-Heiner Lehne27.9.2013)

for the Committee on Legal Affairs and the Committee on Women's Rights and Gender Equality

on the proposal for a directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures

(COM(2012)0614 – C7-0382/2012 – 2012/0299(COD))

Rapporteur: Olle Schmidt

SHORT JUSTIFICATION

The objective of the EU gender equality policy – to create equal access for both men and women to positions of power and influence – is a vital challenge for the Union. The Rapporteur agrees that bold legislative action is needed from the EU in order to reach this goal.

The Rapporteur therefore fully supports the Commission's objectives with the Directive on improving gender balance on the corporate boards of listed companies. However, the proposal does not go far enough, both in terms of scope and measures.

Companies in the financial sector have a higher proportion of women on their boards compared to other sectors in the EU. However, a third of the company boards in the sector completely lack female representation.

The Rapporteur supports the choice of focusing on publicly listed companies. However, the possibility of extending the scope to non-listed companies above SME threshold should be reviewed by the Commission two years after the implementation of this Directive.

Extended scope: the EU institutions and the ECB          

The Rapporteur believes that the Directive should be extended to cover the EU institutions and agencies, including the European Central Bank (ECB). The complete lack of female representation in the ECB’s Executive Board, Governing Council and General Council is deeply problematic and confirms the systematic failure in the appointment procedure for top management positions within the Union. Member States have a responsibility to promote women to these top level positions.

The EU institutions must lead by example in terms of gender balance rather than confirm the stereotype of a lack thereof, both in order to set standards for the private sector, and to improve the legitimacy of the EU. The principles of this Directive should therefore be incorporated in the rules governing the internal staffing procedures of the EU institutions.

The way forward: the "comply or explain" model

The Rapporteur disagrees with the Commission's proposed binding gender target, as it is vital to avoid interfering in shareholders' ownership rights and their freedom to choose representatives on the company board. Furthermore, the Rapporteur strongly doubts the Commission's expected "spill-over effects" from increased female representation among non-executive directors to executive and senior management positions.

The lack of supporting empirical research as well as the Norwegian experience of mandatory quotas among board directors exposes the fallacy of this line of reasoning. Firm quotas do not fundamentally change the gender imbalance situation.

Instead, the Rapporteur would like to underline the importance of directing attention to increasing the number of women at all management levels, in order to achieve a better gender representation at a later stage at executive and board positions, the "bottom-up approach".

The Rapporteur would thus like to propose a form of "comply or explain" model similar to Danish legislation whereby companies are required to set individual targets for their gender balance among both executive and non-executive directors, as well as at all management levels in the company, whilst taking into account branch and company-specific characteristics. Moreover, companies should be obliged to develop a gender policy in order to encourage active measures in favour of improving the gender balance in the company.

Companies should disclose publicly their compliance with the requirements: the gender balance status on boards and at management levels, its relation to the specified gender balance targets, the gender policy, and the measures taken or intended to take in order to reach the targets. This information shall be reported on in the Annual report and on the web-site of the companies covered by the Directive.

Merely adding a few female non-executive directors in the concerned companies is not going far enough. The "comply or explain" model however, ensures that shareholders and executives of the concerned companies reflect on the internal company policy and culture, which will to a greater extent eliminate the obstacles that women face when climbing the corporate ladder.

Companies not complying with the procedures of setting up individual target figures and a gender policy should be subject to sanctions in the form of administrative fines. However, no company should be fined for not reaching the individually set gender targets as this could discourage ambitious targets.

Increased transparency for board recruitment

The Rapporteur welcomes the Commission's initiative to encourage a formalised and more transparent appointment of corporate board directors. However, the reversed burden of proof whereby companies must prove their correct choice when faced with complaints from unsuccessful candidates is not proportionate. The potential complainants should be sufficiently protected by the company’s obligation to submit the criteria on which the selection was made and by the applicable anti-discrimination laws.

Finally, the transparency of companies' gender policies vis-à-vis investors, potential job applicants and the general public is increased through the "comply or explain model" due to the gender balance reporting requirements proposed by the Rapporteur.

AMENDMENTS

The Committee on Economic and Monetary Affairs calls on the Committee on Legal Affairs and the Committee on Women's Rights and Gender Equality, as the committees responsible, to incorporate the following amendments in their report:

Amendment  1

Proposal for a directive

Recital 4

Text proposed by the Commission

Amendment

(4) In recent years the European Commission has presented several reports taking stock of the situation concerning gender diversity in economic decision-making. 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. In its Women's Charter 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 as one of its priority tasks.

(4) In recent years the European Commission has presented several reports taking stock of the situation concerning gender diversity in economic decision-making. The Commission has encouraged publicly listed companies in the European Union to increase the number of the under- represented sex on their boards by self-regulatory measures and to make concrete voluntary commitments in that regard. In its Women's Charter 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 as one of its priority tasks.

Amendment  2

Proposal for a directive

Recital 6 a (new)

Text proposed by the Commission

Amendment

 

(6a) The EU institutions and agencies should lead by example by improving gender balance. The principles laid down in this Directive should be incorporated into the rules governing the internal staffing procedures of the European Commission, the European Parliament, and all EU-institutions and agencies, including the European Central Bank. More efficient gender policies must be developed in all EU institutions to impact on recruitment to, training in, and the everyday functioning of the different EU institutions. For that purpose the institutions shall ensure that gender balance is achieved in the recruitment of senior management, including Director-Generals, Directors and Heads of Unit.

Amendment  3

Proposal for a directive

Recital 6 b (new)

Text proposed by the Commission

Amendment

 

(6b) Owing to their high visibility, the institutions and agencies of the EU should set an example by putting in place, policies for a better gender balance. To enhance representativeness, particular attention needs to be given to recruitment policies for senior positions. Lists of candidates respecting gender equality should be put forward for each senior management post. Starting by 31 December 2018 at the latest the EU institutions and agencies should publish an annual report setting out their efforts to that end.

Amendment  4

Proposal for a directive

Recital 6 c (new)

Text proposed by the Commission

Amendment

 

(6c) It is essential that the management of the Commission, the EU's executive body, improves its gender balance to represent better the European citizens. Member States are therefore called upon to nominate both male and female candidates for each position in the college of the Commissioners in order to achieve a gender balance in the Commission college.

Amendment  5

Proposal for a directive

Recital 6 d (new)

Text proposed by the Commission

Amendment

 

(6d) The European Central bank (ECB), the European System of Financial Supervision (ESFS) – including the European Systemic Risk Board (ESRB) – and the European Supervisory Authorities (ESAs) should comply with all aspects of equality and non-discrimination on the basis of gender. The Boards of Supervisors of the ESAs should also be encouraged to present a gender-balanced list of candidates for the positions of Chairmen and Executive Directors at the relevant hearing in the European Parliament. The final selection of these positions should be gender balanced. It is also important that the Steering Committee and Advisory Committees of the ESRB are gender balanced.

Amendment  6

Proposal for a directive

Recital 6 e (new)

Text proposed by the Commission

Amendment

 

(6e) The supervisory board of the European Central Bank (ECB), including the roles of Chair and Vice Chair, should be balanced from a gender perspective. Whenever a vacancy arises on ECB Executive Board those Member States that have adopted the euro as a currency should be encouraged to nominate two candidates, a male and a female, for the vacant position. The Member States should also be encouraged to appoint women as governors of the national central banks (NCBs) in order to achieve a gender balance in the Governing Council and the General Council of the ECB and on the General Board of the ESRB.

Amendment  7

Proposal for a directive

Recital 7

Text proposed by the Commission

Amendment

(7) The efficient use of human capital is the most important determinant of an economy's competitiveness and is key to addressing the EU's demographic challenges, to competing successfully in a globalised economy and to ensuring a comparative advantage vis-à-vis third countries. The pool of highly trained and qualified women is constantly growing as evidenced by the fact that 60 per cent of university graduates are female. A continued failure to draw on this pool in appointments to economic decision-making positions would amount to a failure to fully exploit skilled human capital.

(7) The efficient use of human capital is the most important determinant of an economy's competitiveness, development and growth and is key to addressing the EU's demographic challenges, to competing successfully in a globalised economy and to ensuring a comparative advantage vis-à-vis third countries. The pool of highly trained and qualified women is constantly growing as evidenced by the fact that 60 per cent of university graduates are female. A continued failure to draw on this pool in companies' management positions and decision-making positions would amount to a failure to fully exploit skilled human capital.

Amendment  8

Proposal for a directive

Recital 7 a (new)

Text proposed by the Commission

Amendment

 

(7a) The attainment of gender equality in society as a whole entails the establishment of equal academic and professional rights for men and women, as well as of shared family, child-care and household responsibilities. The fact that women are typically responsible for the large majority of family and household chores may hinder their advancement to top professional positions. Active participation and involvement of men in family responsibilities is crucial for the attainment of a work-life balance and for the creation of equal career opportunities for both men and women. Attention should be paid to tackling gender stereotypes, inflexible and out-dated employment policies and inadequate parental-leave provisions. Provisions should be in place for women and men to combine family and work life should they wish. Member States are encouraged to ensure the implementation of welfare elements such as fair parental-leave allowances for both women and men, extensive provisions for child- care and opportunities for shared parental leave.

Amendment  9

Proposal for a directive

Recital 8

Text proposed by the Commission

Amendment

(8) At company level, it is widely acknowledged that the presence of women on boards improves corporate governance, because team performance and the quality of decision-making are enhanced due to a more diverse and collective mind-set incorporating a wider range of perspectives and therefore reaching more balanced decisions. Numerous studies have also shown that there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. Enhancing female representation on the boards of publicly listed companies in the Union can therefore have a positive impact on the performance of companies concerned.

(8) At company level, it is widely acknowledged that the presence of women on boards improves corporate governance, because team performance and the quality of decision-making are enhanced due to a more diverse and collective mind-set incorporating a wider range of perspectives as well as a more proactive business model and therefore reaching more balanced decisions. Numerous studies have also shown that there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. Enhancing female representation on the boards of publicly listed companies in the Union given their significant economic and social responsibility can therefore have a positive impact on the performance of companies concerned and sustainable economic development.

Amendment  10

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) Existing evidence also shows that labour market equality can improve economic growth substantially. Enhancing female presence in the boardrooms of listed companies in the Union not only affects the women appointed to boards, but also contributes to attracting female talent to the company and ensuring a greater presence of women at all levels of management and in the workforce. Therefore, a higher share of women on company boards has a positive impact on closing both the gender employment gap and the gender pay gap. Making full use of the existing female talent pool would constitute a marked improvement in terms of return on education for both individuals and the public sector. Female under-representation in the board rooms of publicly listed companies in the EU is a missed opportunity in terms of achieving long-term sustainable growth for Member States' economies at large.

(9) Existing evidence also shows that labour market equality can improve economic growth substantially. Enhancing female presence in the boardrooms of listed companies in the Union not only affects the women appointed to boards, but also contributes to attracting female talent to the company and ensuring a greater presence and recognising the contribution of women at all levels of management and in the workforce. Therefore, a higher share of women on company boards has a positive impact on closing both the gender employment gap and the gender pay gap. Making full use of the existing female talent pool would constitute a marked improvement in terms of return on education for both individuals and the public sector. Female under-representation in the board rooms of publicly listed companies in the EU is a missed opportunity in terms of achieving long-term sustainable growth for Member States' economies at large. Member States should therefore introduce measures to encourage career progression of women at all levels through positive actions such as networking and mentoring programmes.

Amendment  11

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

(10) Despite the existing Union legislation aimed at preventing and combating sex discrimination, the Council recommendations aimed specifically at increasing the presence of women in economic decision-making and Union-level actions encouraging self-regulation, women continue to be strongly 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. 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. In January 2012, women occupied on average just 13.7 per cent of board seats in the largest publicly listed companies in Member States. Among non-executive directors only 15 per cent were women.

(10) Despite the existing Union legislation aimed at preventing and combating sex discrimination, the Council recommendations aimed specifically at increasing the presence of women in economic decision-making and Union-level actions encouraging self-regulation, women continue to be strongly outnumbered by men in the highest decision-making bodies of companies throughout the Union. The same is also true of some EU institutions and agencies, such as the European Central Bank, which should be setting an example by representing all citizens. It will be recalled that, during the appointment of a new member of the ECB Executive Board in late 2012, the Heads of State and Government refused to take into account the gender equality perspective, in contravention of Article 2 of the Treaty, despite the negative opinion of the European Parliament. Also in the private sector gender imbalance in decision making bodies is significant and acute. 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. In January 2012, women occupied on average just 13.7 per cent of board seats in the largest publicly listed companies in Member States. Among non-executive directors only 15 per cent were women. However, the provisions of this Directive do not unduly interfere with day-to-day management, since companies maintain the freedom to select candidates on the basis of quality or other relevant objective considerations.

Amendment  12

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(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. Growing discrepancies between Member States are likely to increase given the very different approaches pursued by individual Member States to increase the representation of females on boards that are being pursued by individual Member States.

(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. However, a number of countries have reached similarly good results through voluntary mechanisms, backed up by solid welfare systems, beneficial to women's participation in the workforce. Growing discrepancies between Member States are likely to increase given the very different approaches pursued by individual Member States to increase the representation of females on boards that are being pursued by individual Member States.

Amendment  13

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

(12) The scattered and divergent regulation or the absence of regulation at national level as regards the gender balance on boards of listed companies does not only lead to discrepancies in the number of women among non-executive directors and different rates of improvement across Member States, but also poses barriers to the internal market by imposing divergent corporate governance requirements on European listed companies. Those differences in legal and self-regulatory requirements for the composition of corporate boards can lead to practical complications for listed companies operating across borders, notably when establishing subsidiaries or in mergers and acquisitions, as well as for candidates for board positions.

(12) The scattered and divergent regulation or the absence of regulation at national level as regards the gender balance on boards of listed companies leads to discrepancies in the number of women among non-executive directors and different rates of improvement across Member States.

Amendment  14

Proposal for a directive

Recital 12 a (new)

Text proposed by the Commission

Amendment

 

(12a) Gender imbalances within companies increase at more senior levels. Furthermore, many of the women who are represented in senior management are employed in fields such as human resources and communication while men at a senior level are more likely to be employed in general management or "line management" within the company. As the main pool for recruitment to corporate board positions is candidates with senior management experience, it is vital that the number of women advancing to such management positions within companies is increased. This is a fundamental requirement for achieving real change in the opportunities for advancement to top decision-making positions available to women.

Amendment  15

Proposal for a directive

Recital 13

Text proposed by the Commission

Amendment

(13) The current lack of transparency of the selection procedures 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 procedure for board members enables investors to better assess the company's business strategy and to take informed decisions.

(13) The current lack of transparency of the selection procedures, qualification criteria and recruitment 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 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. 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 procedure for board members enables investors to better assess the company's business strategy and to take informed decisions.

Amendment  16

Proposal for a directive

Recital 14

Text proposed by the Commission

Amendment

(14) While this Directive does not aim to harmonise national laws on the selection procedures 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 take appointment decisions for non-executive directors on the basis of an objective comparative assessment of the qualifications of candidates in terms of suitability, competence and professional performance is necessary in order to attain gender balance among non-executives directors. Only an EU-level measure can effectively help to ensure a competitive level-playing field throughout the Union and avoid practical complications in business life.

(14) While this Directive does not aim to harmonise national laws on the selection procedures and qualification criteria for board positions in detail, the introduction of certain minimum standards for listed companies without balanced gender representation to take appointment decisions for non-executive directors on the basis of an objective comparative assessment of the qualifications of candidates in terms of suitability, competence and professional performance is necessary in order to attain gender balance among non-executives directors. An EU-level measure can effectively help to ensure a competitive level-playing field throughout the Union avoid practical complications in business life and allow companies to make full use of the opportunities the Internal Market has to offer.

Amendment  17

Proposal for a directive

Recital 15

Text proposed by the Commission

Amendment

(15) The Europe 2020 Strategy for Smart, Sustainable and Inclusive Growth29 ascertained that increased female labour force participation is 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 current economic crisis has magnified Europe's ever-growing need to rely on knowledge, competence and innovation and to make full use of the pool of available talent. Enhancing female participation in economic decision-making, on company boards in particular, is expected to have a positive spill-over effect on female employment in the companies concerned and throughout the whole economy.

(15) The Europe 2020 Strategy for Smart, Sustainable and Inclusive Growth29 ascertained that increased female labour force participation is 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 current economic crisis has magnified Europe's ever-growing need to rely on knowledge, competence and innovation and to make full use of the pool of available talent. Enhancing female participation in economic decision-making, on company boards and at senior management level in particular, is expected to have a positive spill-over effect on female employment in the companies concerned and throughout the whole economy.

Amendment  18

Proposal for a directive

Recital 16

Text proposed by the Commission

Amendment

(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 the view of the fact that Member States and other countries which have chosen this or a similar method have achieved the best results in reducing the under-representation of women in economic decision-making positions.

(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 common requirements on positive action in the form of measures aiming at attaining a quantitative objective for the gender composition of boards of listed companies,

Amendment  19

Proposal for a directive

Recital 16 a (new)

Text proposed by the Commission

Amendment

 

(16a) The appointment of board members and executive and non-executive board directors should fully remain the prerogative and responsibility of the shareholders.

Amendment  20

Proposal for a directive

Recital 16 b (new)

Text proposed by the Commission

Amendment

 

(16b) Reducing individuals to representatives of different groups in society, such as men, women or ethic minorities, runs counter to the objective of providing equal opportunities for all. Every individual shall be regarded as an individual and for that reason there should be no quotas on representation imposed by law. Keeping in mind that individual commitment of companies is essential in order to change attitudes and practices toward women and men in a more comprehensive manner within companies. It also allows for companies to take broader action than merely among non-executive directors. Therefore it is necessary that all companies have a gender policy in place and should report in a transparent manner in their annual report on the gender balance at board and senior management levels.

Amendment  21

Proposal for a directive

Recital 16 c (new)

Text proposed by the Commission

Amendment

 

(16c) Member states should ensure that listed companies develop a gender policy in order to attain a more balanced gender representation throughout the company. This policy may include a description of the relevant measures implemented in that company: nominating both a female and male candidate for key positions, mentoring schemes and career development guidance for women, human resource strategies to encourage diverse recruitment. Furthermore, it may include offering flexible working conditions, for example flexible provisions for parental leave as well as providing subsidised cleaning help and child care. At the same time, these policies should involve employees' organisations, so that women at all levels of society may benefit from it. Each company may select the policies best suited to its activities and should take active measures to increase the proportion of the underrepresented gender in the management of the company.

Amendment  22

Proposal for a directive

Recital 17

Text proposed by the Commission

Amendment

(17) Companies listed on stock exchanges enjoy a particular economic importance, visibility and impact on the market as a whole. The measures provided for in this Directive should therefore apply to listed companies, which are defined as companies incorporated in a Member State whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, in one or more Member States. These companies set standards for the economy in its entirety and their practices can be expected to be followed by other types of companies. The public nature of listed companies justifies that they be regulated to a greater extent in the public interest.

(17) Companies listed on stock exchanges enjoy a particular economic importance, visibility and impact on the market as a whole. The measures provided for in this Directive should therefore apply to listed companies, which are defined as companies incorporated in a Member State whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, in one or more Member States. These companies set standards for the economy in its entirety and their practices can be expected to be followed by other types of companies. The public nature of listed companies justifies that they be adequately regulated in the public interest.

Amendment  23

Proposal for a directive

Recital 17 a (new)

Text proposed by the Commission

Amendment

 

(17a) Non-listed companies also play a major role in the economy. In principle, they should therefore be included in the scope of this Directive. However, since the gender situation in these companies is not generally well-known and since particular provisions might be needed in order to reflect their specificities and varying nature within and across Member States, the inclusion should not be made until at a later stage. The Commission could present a proposal to that effect after having carried out a thorough investigation into all relevant aspects.

Amendment  24

Proposal for a directive

Recital 18

Text proposed by the Commission

Amendment

(18) This Directive should not apply to micro, 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, even if they are listed companies.

(18) This Directive should not apply to micro, 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. This SME exemption should be applicable to listed companies and potentially, following a future Commission proposal, may be applied to non-listed companies.

Amendment  25

Proposal for a directive

Recital 21

Text proposed by the Commission

Amendment

(21) In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the company's workforce and/or organisations of workers pursuant to national law or practice. The quantitative objectives provided for in this Directive should apply to all non-executive directors including employee representatives. However, the practical procedures 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.

(21) In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the company's workforce and/or organisations of workers pursuant to national law or practice. The quantitative objectives provided for in this Directive should apply to all non-executive directors including employee representatives. However, the practical procedures 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 on the basis of careful and extensive consultations with social partners at the national level. It is also important that employee organisations are involved in the development and implementation of gender policies in the company. Employee representation on the boards of listed companies is also a positive way of enhancing diversity by including key perspectives and genuine knowledge of the internal workings of the company.

Amendment  26

Proposal for a directive

Recital 22

Text proposed by the Commission

Amendment

(22) Listed companies in the Union should be imposed obligations of means providing for appropriate procedures with a view of meeting specific objectives regarding the gender composition of their boards. Those listed companies in whose boards members of the under-represented sex hold less than 40 per cent of non-executive director positions should 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. Therefore, the Directive establishes the objective of at least 40 per cent of non-executive directors of the under-represented sex by that date. This objective in principle only concerns the overall gender diversity among the non-executive directors and does not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, it does not exclude any particular candidates for director positions, nor does it impose any individual directors on companies or shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.

(22) Listed companies in the Union should be obliged to implement appropriate and efficient procedures with a view of meeting specific objectives regarding the gender composition of their boards. Those listed companies in whose boards members of the under-represented sex hold less than 40 per cent of non-executive director positions should 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. Listed companies could for example consider putting in place training programmes and mentoring programmes for the under-represented sex as one tool to achieve gender balance if there is a clear gender gap in the company's selection pool for recruitment to board positions. Therefore, the Directive establishes the objective of at least 40 per cent of non-executive directors of the under-represented sex by that date. This objective in principle only concerns the overall gender diversity among the non-executive directors and does not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, it does not exclude any particular candidates for director positions, nor does it impose any individual directors on companies or shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.

Amendment  27

Proposal for a directive

Recital 22 a (new)

Text proposed by the Commission

Amendment

 

(22a) In order to include a broader set of perspectives and experiences in economic decision making, listed companies should be encouraged to take into account not just gender equality but also diversity as regards competence, age, geographical provenance, ethnicity, and educational and professional background in their recruitment policies.

Amendment  28

Proposal for a directive

Recital 23

Text proposed by the Commission

Amendment

(23) Member States exercise a dominant influence over listed companies which are public undertakings within the meaning of Article 2(b) of Commission Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings, as well as on financial transparency within certain undertakings. Due to that dominant influence, they have the instruments at their disposal to bring about the necessary change more rapidly. Therefore, in such companies the objective of least 40 per cent of non-executive directors of the under-represented sex should be set at an earlier date.

(23) Member States exercise a dominant influence over listed companies which are public undertakings within the meaning of Article 2(b) of Commission Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings, as well as on financial transparency within certain undertakings. Due to that dominant influence, they have the instruments at their disposal to bring about the necessary change more rapidly.

Amendment  29

Proposal for a directive

Recital 26

Text proposed by the Commission

Amendment

(26) In line with that case-law, Member States should ensure that the selection of the best qualified candidates for non-executive directors is based on a comparative analysis of the qualifications of each candidate on the basis of pre-established, clear, neutrally formulated and unambiguous criteria. Examples of types of selection criteria that 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 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.

(26) In line with that case-law, listed companies should be encouraged to base the selection of the best qualified candidates for non-executive directors on a comparative analysis of the qualifications of each candidate on the basis of pre-established, clear, neutrally formulated and unambiguous criteria. Examples of types of selection criteria that 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 may be given to the candidate of the under-represented sex if that candidate is at least equally qualified. Member States should ensure that companies that do not comply with the Directive's key objectives disclose additional information on their recruitment, selection and appointment policies, and in particular explain measures they will implement to improve their gender balance in this regard.

Amendment  30

Proposal for a directive

Recital 27

Text proposed by the Commission

Amendment

(27) The methods of recruiting and appointing 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, the direct appointment of directors by individual shareholders or a vote in the shareholders' assembly on individual candidates or lists of candidates. 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. In this respect, this Directive only establishes a minimum harmonisation of selection procedures, 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 gender representation in the boards of listed companies.

(27) The methods of recruiting, selecting and appointing 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, the direct appointment of directors by individual shareholders or a vote in the shareholders' assembly on individual candidates or lists of candidates. This Directive respects the diversity of selection procedures which should be based on transparency and merit, while insisting that the aim of increasing the under-represented sex's participation on boards is attained. 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. In this respect, this Directive allows for diversity of selection procedures, with a view to attaining the objective of a more balanced gender representation in the boards of listed companies. The provision of this Directive does not unduly interfere with day-to-day management, since companies maintain the freedom to select candidates on the basis of qualifications or other objective relevant considerations.

Amendment  31

Proposal for a directive

Recital 28

Text proposed by the Commission

Amendment

(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 to disclose, upon the request of an unsuccessful candidate, not only the qualification criteria upon which the selection was based, but also 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 the Articles 7 and 8 of the Charter, and the obligation for listed companies to supply that information, upon request, to the unsuccessful candidate, 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.

(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 to disclose, where possible, upon the request of an unsuccessful candidate, not only the qualification criteria upon which the selection was based, but also the objective comparative assessment of those criteria. These limitations to the right to respect for private life with regard to the processing of personal data, recognised by the Articles 7 and 8 of the Charter, and the obligation for listed companies to supply that information, upon request, to the unsuccessful candidate, 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.

Amendment  32

Proposal for a directive

Recital 29

Text proposed by the Commission

Amendment

(29) Where an unsuccessful candidate of the under-represented sex establishes the presumption they were equally qualified as the appointed candidate of the other sex, the listed company should be required to demonstrate the correctness of the choice.

deleted

Amendment  33

Proposal for a directive

Recital 30

Text proposed by the Commission

Amendment

(30) Member States should provide for effective, proportionate and dissuasive sanctions for breaches of this Directive, which could include, inter alia, administrative fines and 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).

(30) Member States should provide for effective, proportionate and dissuasive sanctions for breaches of this Directive, which could include, inter alia, administrative fines and 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) and publication of the decision to impose administrative fines, including information on the type and nature of the breach and the amount of the fine imposed. Sanctions shall be applied in the case of listed companies that do not comply with the foreseen procedures for the appointment or the election of non-executive directors laid down in Article 4 (1) or with the disclosure requirements as defined in Article 5 of this Directive. However, the case of companies' failure to reach the quantitative objective in article 4(1) shall not qualify as a breach of this Directive and should not trigger a sanctioning regime.

Amendment  34

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

(31) Since the gender composition of the workforce has a direct impact on the availability of candidates of the under-represented sex, Member States may provide that where the members of the under-represented sex make up less than 10 per cent of the workforce the company concerned should not be required to meet the objective laid down in this Directive.

deleted

Amendment  35

Proposal for a directive

Recital 32

Text proposed by the Commission

Amendment

(32) Since listed companies should aim to increase the proportion of the under-represented sex in all decision-making positions, Member States may provide that the objective laid down in this Directive should be considered to be 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.

(32) Since listed companies should aim to increase the proportion of the under-represented sex in all decision-making positions, Member States may provide that the objective laid down in this Directive should be considered to be 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. Such companies shall, however, continue to set out in their annual reports and on their websites the gender balance among executive and non-executive directors, and their policies in this area, in accordance with Article 5(1), 5(1a) and 5(2) of this Directive.

Amendment  36

Proposal for a directive

Recital 34

Text proposed by the Commission

Amendment

(34) Member States should require listed companies to provide information on the gender composition of their boards as well as information on how they managed to meet 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 gender balance among directors. Such information should be published and, where the company in question has not met the objective, it should include a description of the measures that it has taken so far and intends to take in the future in order to meet the objective.

(34) Member States should require listed companies to provide information on the gender composition of their boards as well as information on how they managed to meet 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 gender balance among directors. Such information should be published in an appropriate and easily accessible manner in the annual report and on the website and, where the company in question has not met the objective, it should include a comprehensive description of the measures that it has taken so far and intends to take in the future in order to meet the objective. Furthermore, companies that failed to comply should provide a justification on the reasons for not implementing the adequate mechanisms, and what concrete measures are to be adopted in order to efficiently guarantee that the objective of enhanced gender-balance is met.

Amendment  37

Proposal for a directive

Recital 35

Text proposed by the Commission

Amendment

(35) Member States may have already taken measures providing for means to ensure a more balanced representation of women and men in company boards before the entry into force of this Directive. Such Member States should have an opportunity to apply those measures in place of the procedural requirements relating to appointments where they can demonstrate that the measures taken are of equivalent efficacy in order to attain the objective of a presence of the under-represented sex of at least 40 per cent among non-executive directors of listed companies at the latest by 1 January 2020 or at the latest by 1 January 2018 in case of listed companies which are public undertakings.

(35) Member States may have already taken measures providing for means to ensure a more balanced representation of women and men in company boards before the entry into force of this Directive. Such Member States should have an opportunity to apply those measures in place of the procedural requirements relating to appointments where they can demonstrate that the measures taken are of equivalent efficacy in order to attain the objective of a presence of the under-represented sex of at least 40 per cent among non-executive directors of listed companies or the objective laid out in Article 4(1) at the latest by 1 January 2020 . The Commission should assess whether the Member States' measures are sufficient to achieve the desired outcome, and decide whether relevant articles of the Directive can be suspended in order to avoid interference with national measures.

Amendment  38

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(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 achieve those objectives. Member States are given sufficient freedom to determine how the objectives laid down in this Directive should best be achieved taking national circumstances into account, in particular rules and practices concerning recruitment for board positions. This Directive does not interfere with the possibility for companies to appoint the most qualified board members, and it grants a sufficiently long period of adaptation for all listed companies.

(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 achieve those objectives. Member States are given sufficient freedom to determine how the objectives laid down in this Directive should best be achieved taking national circumstances into account, in particular rules and practices concerning recruitment for board positions. This Directive does not interfere with the possibility for companies to appoint the most qualified board members, and it grants a flexible framework and a sufficiently long period of adaptation for all listed companies.

Amendment  39

Proposal for a directive

Recital 38 a (new)

Text proposed by the Commission

Amendment

 

(38a) In order to ensure that the gender balance objectives set out in this Directive are fully implemented by the Member States and are integrated into the specific policies of the relevant companies and in order to verify the expected spill-over effects of this Directive, the Commission shall submit to the European Parliament and the Council a report. This report should also evaluate the positive and negative impacts of the potential extension of the scope of the gender balance objectives to non-listed companies and re-evaluate the need for the introduction of legally-binding targets at the EU-level.

Amendment  40

Proposal for a directive

Recital 39

Text proposed by the Commission

Amendment

(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.

(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. Member States should cooperate with social partners and civil society in order to efficiently inform them on the Directive's signification, transposition and implementation.

Amendment  41

Proposal for a directive

Article 4 – paragraph 1

Text proposed by the Commission

Amendment

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.

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 adjust their recruitment, selection or appointment procedures in order to ensure that the selection of the non-executive directors is based on 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.

Amendment  42

Proposal for a directive

Article 4 – paragraph 3

Text proposed by the Commission

Amendment

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.

3. In order to attain the objective laid down in paragraph 1, Member States shall ensure that, in the recruitment , selection or appointment procedures for non-executive directors priority may 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 assessment taking account of all criteria specific to the individual candidates tilts the balance in favour of the candidate of the other sex.

Amendment  43

Proposal for a directive

Article 4 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. Member States shall ensure that the requirements concerning the selection of candidates shall be met at the appropriate stage of the selection process in accordance with national law and the articles of association of the listed company concerned.

Amendment  44

Proposal for a directive

Article 4 – paragraph 4

Text proposed by the Commission

Amendment

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.

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.

Amendment  45

Proposal for a directive

Article 4 – paragraph 6

Text proposed by the Commission

Amendment

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.

deleted

Amendment  46

Proposal for a directive

Article 4 – paragraph 7

Text proposed by the Commission

Amendment

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.

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. Such companies shall continue to set out in their annual reports and on their websites the gender balance among executive and non-executive directors and their commitments in this area, in accordance with Article 5(1) and 5(2) of this Directive.

Amendment  47

Proposal for a directive

Article 5 – paragraph 1

Text proposed by the Commission

Amendment

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.

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. These commitments shall aim to achieve tangible progress from the individual company's current position to ensure a balanced gender representation among executive directors.

Amendment  48

Proposal for a directive

Article 5 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. Member States shall ensure that listed companies in which the under-represented sex holds less than a third of executive and non-executive board positions, develop a gender policy on how to increase the proportion of the under-represented gender at executive and non-executive levels in the company.

Amendment  49

Proposal for a directive

Article 5 – paragraph 2

Text proposed by the Commission

Amendment

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.

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 following:

 

a) the gender representation on their boards, distinguishing between non-executive and executive directors,

 

b) presentation and analysis of the specific measures taken in view of the objectives laid down in Article 4(1) and in paragraph 1 and 1a of this Article,

 

c) the specific measures planned for the following year,

 

d) the progress with regard to the objectives laid down in Article 4(1) and paragraph 1 of this Article.

 

Listed companies shall publish that information in an appropriate and accessible manner on their website and in their annual report.

Amendment  50

Proposal for a directive

Article 5 – paragraph 3

Text proposed by the Commission

Amendment

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.

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 and 1a 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.

Amendment  51

Proposal for a directive

Article 6 – paragraph 1

Text proposed by the Commission

Amendment

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.

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. Member States shall report to the Commission on the sanctions that are in place to comply with the provisions of this Directive.

Amendment  52

Proposal for a directive

Article 6 – paragraph 2 – introductory part

Text proposed by the Commission

Amendment

2. The sanctions must be effective, proportionate and dissuasive and may include the following measures:

2. The sanctions must be effective, proportionate and dissuasive and shall include at least the following:

Amendment  53

Proposal for a directive

Article 6 – paragraph 2 – point b a (new)

Text proposed by the Commission

Amendment

 

(ba) publication of the decision to impose administrative fines, including information on the type and nature of the breach [and the amount of the fine imposed];

Amendment  54

Proposal for a directive

Article 8 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

3. Without prejudice to Article 4(6) and (7), Member States which before the entry into force of this Directive have already taken measures to ensure a more balanced representation of women and men among the non-executive directors of listed companies may suspend the application of the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5), provided that it can be shown that those measures enable members of the under-represented sex to hold at least 40 per cent of the non-executive director positions of listed companies by at the latest 1 January 2020, or at the latest 1 January 2018 for listed companies which are public undertakings.

3. Without prejudice to Article 4(6) and (7), Member States which before the entry into force of this Directive have already taken measures to ensure a more balanced representation of women and men among the non-executive directors of listed companies may suspend the application of the procedural requirements contained in Article 4(1), (3) and (4) ), provided that it can be shown that those measures enable members of the under-represented sex to hold at least 40 per cent of the non-executive director positions of listed companies by at the latest 1 January 2020.

Amendment  55

Proposal for a directive

Article 9 – paragraph 1

Text proposed by the Commission

Amendment

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, amongst others, comprehensive information about the measures taken with a view to attaining the objectives laid down in Article 4(1), information provided in accordance with Article 5(2) and information about individual commitments taken by listed companies pursuant to Article 5(1).

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 amongst others, comprehensive information about the measures taken with a view to attaining the objectives laid down in Article 4(1), information provided in accordance with Article 5 (2) and information about individual commitments taken by listed companies pursuant to Article 5(1) and 5(1a).

Amendment  56

Proposal for a directive

Article 9 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. The Commission shall submit an evaluation report on the implementation of the requirements for listed companies referred to in Articles 4 (1) and 5(1) on the basis of the reports submitted by the Member States pursuant to paragraph 1. In addition, the Commission report shall include the gender-balance situation at board-level of non-listed companies that are above the SME threshold as defined in Article 2.The Commission shall consider making a proposal for extending the scope of this Directive to non-listed companies which are not SMEs, taking into account all relevant European and international developments and the specificities and varying nature of these companies.

 

Where the report demonstrates that the efforts of the companies have not led to a significant increase in the proportion of the underrepresented gender on the boards in listed or non-listed companies, the Commission shall consider making an appropriate legislative proposal amending the requirements laid down in this Directive in order to introduce more strict legal measures.

Amendment  57

Proposal for a directive

Article 9 – paragraph 1 b (new)

Text proposed by the Commission

Amendment

 

1b. The Commission shall present a report on how the principles of this Directive are applied by and incorporated into the rules governing the internal staffing procedures of all EU institutions and agencies. To this end all EU institutions and agencies shall report to the Commission at the latest by 31 December 2018 and afterwards annually on their gender statistics and progress made. The Commission shall forthwith make such reports public on its website. Where appropriate this report could be accompanied by a legislative proposal extending the scope of the Directive to cover all EU institutions and agencies.

Amendment  58

Proposal for a directive

Article 9 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

2. Member States having suspended pursuant to Article 8(3) the application of the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5) shall include information in the reports mentioned in paragraph 1 demonstrating the concrete results obtained by the national measures referred to in Article 8(3). The Commission shall then issue a specific report ascertaining whether those measures effectively enable members of the under-represented sex to hold at least 40 per cent of the non-executive director positions by 1 January 2018 for listed companies which are public undertakings, and by 1 January 2020 for listed companies which are not public undertakings. The first such report shall be issued by the Commission by 1 July 2017, and subsequent reports shall be issued within six months after notification of the respective national reports under paragraph 1.

2. Member States having suspended pursuant to Article 8(3) the application of the procedural requirements contained in Article 4(1), (3), and (4) shall include information in the reports mentioned in paragraph 1 demonstrating the concrete results obtained by the national measures referred to in Article 8(3). The Commission shall then issue a specific report ascertaining whether those measures effectively enable members of the under-represented sex to hold at least 40 per cent of the non-executive director positions by 1 January 2020 for listed companies. The first such report shall be issued by the Commission by 1 July 2017, and subsequent reports shall be issued within six months after notification of the respective national reports under paragraph 1.

Amendment  59

Proposal for a directive

Article 9 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

Member States in question shall ensure that listed companies, which by applying the national measures referred to in Article 8(3) have not appointed or elected members of the under-represented sex for at least 40 per cent of the non-executive director positions of their boards by 1 January 2018, where they are public undertakings, or by 1 January 2020, where they are not public undertakings, apply the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5) with effect respectively from those dates.

Member States in question shall ensure that listed companies, which by applying the national measures referred to in Article 8(3) have not appointed or elected members of the under-represented sex for at least 40 per cent of the non-executive director positions of their boards by 1 January 2020 apply the procedural requirements relating to appointments contained in Article 4(1), (3) and (4) with effect respectively from those dates.

Amendment  60

Proposal for a directive

Article 9 – paragraph 3

Text proposed by the Commission

Amendment

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.

3. The Commission shall review the application of this Directive and submit to the European Parliament and the Council the reports referred to in paragraphs 1a and 1b by 31 December 2019 at the latest and every two years thereafter. The Commission shall evaluate in particular whether the objectives of this Directive have been achieved.

PROCEDURE

Title

Gender balance among non-executive directors of companies listed on stock exchanges

References

COM(2012)0614 – C7-0382/2012 – 2012/0299(COD)

Committees responsible

       Date announced in plenary

JURI

22.11.2012

FEMM

22.11.2012

 

 

Opinion by

       Date announced in plenary

ECON

22.11.2012

Rapporteur

       Date appointed

Olle Schmidt

14.1.2013

Rule 51 – joint committee meetings

       Date announced in plenary

       

17.1.2013

Discussed in committee

24.4.2013

18.6.2013

 

 

Date adopted

17.9.2013

 

 

 

Result of final vote

+:

–:

0:

39

2

6

Members present for the final vote

Marino Baldini, Jean-Paul Besset, Udo Bullmann, George Sabin Cutaş, Leonardo Domenici, Derk Jan Eppink, Diogo Feio, Markus Ferber, Elisa Ferreira, Ildikó Gáll-Pelcz, Jean-Paul Gauzès, Sven Giegold, Sylvie Goulard, Gunnar Hökmark, Syed Kamall, Othmar Karas, Wolf Klinz, Jürgen Klute, Philippe Lamberts, Astrid Lulling, Ivana Maletić, Arlene McCarthy, Marlene Mizzi, Ivari Padar, Alfredo Pallone, Anni Podimata, Antolín Sánchez Presedo, Olle Schmidt, Peter Simon, Theodor Dumitru Stolojan, Ivo Strejček, Kay Swinburne, Sampo Terho, Marianne Thyssen, Pablo Zalba Bidegain

Substitute(s) present for the final vote

Pervenche Berès, Fabrizio Bertot, Herbert Dorfmann, Sari Essayah, Mojca Kleva Kekuš, Thomas Mann, Gay Mitchell, Godelieve Quisthoudt-Rowohl, Andreas Schwab, Theodoros Skylakakis, Nils Torvalds

Substitute(s) under Rule 187(2) present for the final vote

Alda Sousa


OPINION of the Committee on Employment and Social Affairs (11.7.2013)

for the Committee on Legal Affairs and the Committee on Women’s Rights and Gender Equality

on the proposal for a directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures

(COM(2012)0614 – C7-0382/2012 – 2012/0299(COD))

Rapporteur: Marije Cornelissen

SHORT JUSTIFICATION

In October 2012, the Commission presented a legislative proposal to promote gender balance among non-executive Directors of companies listed on stock exchanges. In the year before that, listed companies in the EU were given a last chance to self-regulate for more women in board positions, when Commission Vice-President Reding called on them to sign the ‘Women on board pledge for Europe’ in March 2011. Only 24 companies throughout Europe signed. Considering the persistently low number of women on company boards and the obvious failure of self-regulation to significantly improve the situation in the past decades, the time has come to take legislative action.

Scope: executive - non executive Directors

Your rapporteur suggests that the entire Directive be applied to executive as well as non-executive Directors. The provisions of this Directive do not unduly interfere with day-to-day management, since companies maintain the freedom to select candidates on the basis of quality or other relevant considerations. The proportion of female executive Directors is particularly low (10% in 2013 compared to 17% among non-executives). Therefore the key articles of the Directive related to adjustment of the selection procedure should apply to all Directors.

Diversity of procedures

In the Commission proposal, the emphasis is on the specific manner in which candidates are selected for board positions. This should be transparent, neutral and based on individual qualifications. However, the way in which board members are selected or appointed does not always resemble a recruitment procedure for regular employees. In some Member States, for instance, board members are appointed or elected by workers or union members, as in the German system of ‘Mitbestimmung’. Furthermore, individual qualities are not always the sole relevant criterion. A balance among different skills, expertise, nationality or considerations of representation can be important or even decisive factors in the final choice of Directors. Unions and businesses have asked for more flexibility in the manner of appointment or selection.

Therefore, your rapporteur proposes in Article 4.1 to leave Member States and companies free as to how they adjust their selection or appointment procedure, while focusing on the outcome. Adjustments can take different forms and could apply to the appointment, recruitment and selection process, as long as they aim for the result of at least 40% women on the boards of listed companies.

Focus on the whole process of recruitment

The Commission proposal focuses solely on the individual selection of candidates for board positions. However, the recruitment of a board member does not start at the selection stage; it starts at the stage of building a pool of candidates to be selected. If this pool does not include enough able and suitable women, it is still unlikely that a woman will be chosen even if the selection criteria are fully gender neutral.

Your rapporteur therefore proposes to include the selection pool in the reporting obligations for companies that have not selected women while women are still under-represented, by requiring information on the number of women in the selection pool as well as on the criteria used to select a candidate, and the measures they will take to ensure sufficient qualified and suitable candidates of the under-represented sex in the next procedures.

Reporting and explaining obligations

The Directive should be aimed at those companies who do not make a sufficient effort or obtain sufficient results in promoting gender equality in their boards. Therefore, your rapporteur wants to distinguish between companies that do well and companies that do poorly. All companies will be required to annually provide data on the gender representation on their boards in their annual reports and to the competent national authorities. If companies have appointed someone of the over-represented sex, their disclosure, reporting and explaining obligations increase. They will have to disclose the gender composition of the selection pool and the reasons and criteria leading to the choice for the candidate of the over-represented sex, as well as present measures to ensure more gender balance in the selection pool and to increase the chances of appointing a director from the under-represented sex in future appointments.

Suspension clause

The Commission proposal aims to avoid interfering with existing national measures taken to increase gender diversity on boards. Your rapporteur suggests maintaining the possibility for Member States to suspend certain key articles of the Directive. If a Member State feels that voluntary or other measures will also lead to the fulfilment of the aims of the Directive, it should have the freedom to see if this is the case. However, she proposes to strengthen the safeguards that national policy is equally effective in reaching the 40% objective of the Directive. To this end, the suspension should be made conditional upon approval by the Commission. If, furthermore, by 2017 an intermediate goal of 30% women on boards has not been reached, the Directive will automatically come into force for that Member State.

Sanctions and incentives

Your rapporteur agrees with the Commission's approach to give Member States the key responsibility to put in place effective, proportionate and dissuasive sanctions. However, additional incentives can be put in place. Member States should be able to reward companies by using the achievement of the 40%-objective as an award criteria in public procurement. Additionally, the EU institutions should set the example by granting tenders to companies that have reached the 40% objective only. Compliance with the Directive (not to be confused with the ultimate objective) should be a condition for the reception of EU funds.

AMENDMENTS

The Committee on Employment and Social Affairs calls on the Committee on Legal Affairs and the Committee on Women’s Rights and Gender Equality, as the committees responsible, to incorporate the following amendments in their report:

Amendment  1

Proposal for a directive

Title 1

Text proposed by the Commission

Amendment

Proposal for a

Proposal for a

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures

on improving the gender balance among directors of companies listed on stock exchanges and large public undertakings and related measures

(Text with EEA relevance)

(Text with EEA relevance)

Amendment  2

Proposal for a directive

Citation 1

Text proposed by the Commission

Amendment

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 157(3) thereof,

Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 8, 157(3) and (4) thereof,

Amendment  3

Proposal for a directive

Citation 1 a (new)

Text proposed by the Commission

Amendment

 

Having regard to Articles 2 and 3(3) of the Treaty on European Union,

Amendment  4

Proposal for a directive

Citation 1 b (new)

Text proposed by the Commission

Amendment

 

Having regard to Article 23 of the Charter of Fundamental Rights of the European Union,

Amendment  5

Proposal for a directive

Citation 1 c (new)

Text proposed by the Commission

Amendment

 

Having regard to Article 4 of the Convention on the Elimination of All Forms of Discrimination against Women (CEDAW),

Amendment  6

Proposal for a directive

Recital 2 a (new)

Text proposed by the Commission

Amendment

 

(2a) In order to achieve gender equality in the workplace there must be a gender balanced model of decision making at all levels within the company while also ensuring the elimination of the gender pay gap which contributes significantly to the feminisation of poverty.

Amendment  7

Proposal for a directive

Recital 6 a (new)

Text proposed by the Commission

Amendment

 

(6a) In their internal staffing policies all EU institutions and agencies should comply with the principle of gender equality, in particular by ensuring gender balanced decision making at all levels within the bodies concerned.

Amendment  8

Proposal for a directive

Recital 7

Text proposed by the Commission

Amendment

(7) The efficient use of human capital is the most important determinant of an economy's competitiveness and is key to addressing the EU's demographic challenges, to competing successfully in a globalised economy and to ensuring a comparative advantage vis-à-vis third countries. The pool of highly trained and qualified women is constantly growing as evidenced by the fact that 60 per cent of university graduates are female. A continued failure to draw on this pool in appointments to economic decision-making positions would amount to a failure to fully exploit skilled human capital.

(7) The efficient use of human capital is the most important determinant of an economy's competitiveness, to competing successfully in a globalised economy. There is a pool of highly trained and qualified women as evidenced among others by the fact that 60 per cent of university graduates are female. A continued failure to draw on this pool in appointments to economic decision-making positions would amount to a failure to fully exploit skilled human capital.

Amendment  9

Proposal for a directive

Recital 7 a (new)

Text proposed by the Commission

Amendment

 

(7a) In order to ensure the promotion of gender equality, Member States should put in place provisions whereby men and women can combine work and family life, in particular, flexible arrangements and supports for those with care responsibilities.

Amendment  10

Proposal for a directive

Recital 8

Text proposed by the Commission

Amendment

(8) At company level, it is widely acknowledged that the presence of women on boards improves corporate governance, because team performance and the quality of decision-making are enhanced due to a more diverse and collective mind-set incorporating a wider range of perspectives and therefore reaching more balanced decisions. Numerous studies have also shown that there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. Enhancing female representation on the boards of publicly listed companies in the Union can therefore have a positive impact on the performance of companies concerned.

(8) At company level, it is widely acknowledged that the presence of women on boards improves corporate governance, because team performance is enhanced and the quality of decision making is improved due to the fact that it incorporates a more balanced perspective. Numerous studies have also shown that there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. Enhancing female representation on the boards of publicly listed companies in the Union should therefore have a positive impact on the performance of companies concerned.

Amendment  11

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) Existing evidence also shows that labour market equality can improve economic growth substantially. Enhancing female presence in the boardrooms of listed companies in the Union not only affects the women appointed to boards, but also contributes to attracting female talent to the company and ensuring a greater presence of women at all levels of management and in the workforce. Therefore, a higher share of women on company boards has a positive impact on closing both the gender employment gap and the gender pay gap. Making full use of the existing female talent pool would constitute a marked improvement in terms of return on education for both individuals and the public sector. Female under-representation in the board rooms of publicly listed companies in the EU is a missed opportunity in terms of achieving long-term sustainable growth for Member States' economies at large.

(9) Existing evidence also shows that labour market equality can improve economic growth substantially. Enhancing female presence in the boardrooms of listed companies in the Union not only affects the women appointed to boards, but also contributes to attracting female talent to the company and ensuring a greater presence of women at all levels of management and in the workforce. Therefore, a higher share of women on company boards should have a positive impact on closing both the gender employment gap and the gender pay gap. Making full use of the existing female talent pool would constitute a marked improvement in terms of return on education for both individuals and the public sector. Female under-representation in the board rooms of publicly listed companies in the EU is a missed opportunity in terms of achieving long-term sustainable growth for Member States' economies at large.

Amendment  12

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(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. Growing discrepancies between Member States are likely to increase given the very different approaches pursued by individual Member States to increase the representation of females on boards that are being pursued by individual Member States.

(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. Growing discrepancies between Member States are likely to increase given the very different approaches pursued by individual Member States to increase the representation of females on boards that are being pursued by individual Member States. Member States should therefore exchange information and good practices designed to achieve better results through the adoption of measures to promote gender equality.

Amendment  13

Proposal for a directive

Recital 13

Text proposed by the Commission

Amendment

(13) The current lack of transparency of the selection procedures 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 procedure for board members enables investors to better assess the company's business strategy and to take informed decisions.

(13) The current lack of transparency of the selection procedures 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 procedure for board members enables investors to better assess the company's business strategy and to take informed decisions. It is therefore important for board appointment procedures to be clear and transparent and for applicants to be assessed objectively on their individual merits, irrespective of gender.

Amendment  14

Proposal for a directive

Recital 14

Text proposed by the Commission

Amendment

(14) While this Directive does not aim to harmonise national laws on the selection procedures 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 take appointment decisions for non-executive directors on the basis of an objective comparative assessment of the qualifications of candidates in terms of suitability, competence and professional performance is necessary in order to attain gender balance among non-executives directors. Only an EU-level measure can effectively help to ensure a competitive level-playing field throughout the Union and avoid practical complications in business life.

(14) This Directive does not aim to harmonise national laws on the recruitment, selection and appointment procedures and qualification criteria for board positions in detail, but requires the listed companies and large public undertakings without balanced gender representation to adjust their vacancy announcement, recruitment, selection and appointment procedures which has been shown to be necessary in order to attain gender balance among directors. An EU-level measure is the main tool to effectively ensure a competitive level-playing field throughout the Union and avoid practical complications in business life.

Amendment  15

Proposal for a directive

Recital 15

Text proposed by the Commission

Amendment

(15) The Europe 2020 Strategy for Smart, Sustainable and Inclusive Growth ascertained that increased female labour force participation is 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 current economic crisis has magnified Europe's ever-growing need to rely on knowledge, competence and innovation and to make full use of the pool of available talent. Enhancing female participation in economic decision-making, on company boards in particular, is expected to have a positive spill-over effect on female employment in the companies concerned and throughout the whole economy.

(15) The Europe 2020 Strategy for Smart, Sustainable and Inclusive Growth ascertained that increased female labour force participation is 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 current economic crisis has magnified Europe's ever-growing need to rely on knowledge, competence and innovation and to make full use of the pool of available talent. Enhancing female participation in economic decision-making, on company boards and at all management levels throughout the company, is expected to have a positive spill-over effect on female employment in the companies concerned and throughout the whole economy.

Amendment  16

Proposal for a directive

Recital 16

Text proposed by the Commission

Amendment

(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 the view of the fact that Member States and other countries which have chosen this or a similar method have achieved the best results in reducing the under-representation of women in economic decision-making positions.

The Union should therefore aim to increase the presence of women on company boards in all Member States, in order to boost economic growth, encourage labour market mobility and strengthen 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 and large public undertakings, in the view of the fact that Member States and other countries which have chosen this or a similar method have achieved the best results in reducing the under-representation of women in economic decision-making positions.

Amendment  17

Proposal for a directive

Recital 18

Text proposed by the Commission

Amendment

(18) This Directive should not apply to micro, 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, even if they are listed companies.

(18) This Directive should not apply to micro, 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, even if they are listed companies, however Member states should put in place policies to support and incentivise SMEs to significantly improve the gender balance at all levels of management and on company boards.

Amendment  18

Proposal for a directive

Recital 20

Text proposed by the Commission

Amendment

(20) All board systems distinguish 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 quantitative objectives provided for in this Directive should apply only to the non-executive directors 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. As the non-executive directors perform supervisory tasks, it is also easier to recruit qualified candidates from outside the company and to a large extent also from outside the specific sector in which a company operates – a consideration which is of importance for areas of the economy where members of a particular sex are especially under-represented in the workforce.

(20) All board systems distinguish 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 quantitative objectives provided for in this Directive should apply to all directors.

Amendment  19

Proposal for a directive

Recital 21

Text proposed by the Commission

Amendment

(21) In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the company's workforce and/or organisations of workers pursuant to national law or practice. The quantitative objectives provided for in this Directive should apply to all non-executive directors including employee representatives. However, the practical procedures 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.

(21) In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the company's workforce and/or organisations of workers pursuant to national law or practice. The quantitative objectives provided for in this Directive should apply to all non-executive directors including employee representatives. However, the practical procedures 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 on the basis of careful and extensive consultations with social partners at the national level.

Amendment  20

Proposal for a directive

Recital 22

Text proposed by the Commission

Amendment

(22) Listed companies in the Union should be imposed obligations of means providing for appropriate procedures with a view of meeting specific objectives regarding the gender composition of their boards. Those listed companies in whose boards members of the under-represented sex hold less than 40 per cent of non-executive director positions should 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. Therefore, the Directive establishes the objective of at least 40 per cent of non-executive directors of the under-represented sex by that date. This objective in principle only concerns the overall gender diversity among the non-executive directors and does not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, it does not exclude any particular candidates for director positions, nor does it impose any individual directors on companies or shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.

(22) Listed companies in the Union should be imposed obligations of means providing for appropriate procedures with a view of meeting specific objectives regarding the gender composition of their boards. Those listed companies and large public undertakings in whose boards members of the under-represented sex hold less than 40 per cent of director positions should adjust their recruitment, vacancy announcement, selection and appointment procedures in order to attain the said percentage at the latest by 1 January 2020. Therefore, the Directive establishes the objective of at least 40 per cent of directors of the under-represented sex by that date. This objective in principle only concerns the overall gender diversity among directors and does not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, it does not exclude any particular candidates for director positions, nor does it impose any individual directors on companies or shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.

Amendment  21

Proposal for a directive

Recital 23

Text proposed by the Commission

Amendment

(23) Member States exercise a dominant influence over listed companies which are public undertakings within the meaning of Article 2(b) of Commission Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings, as well as on financial transparency within certain undertakings.32 Due to that dominant influence, they have the instruments at their disposal to bring about the necessary change more rapidly. Therefore, in such companies the objective of least 40 per cent of non-executive directors of the under-represented sex should be set at an earlier date.

(23) Member States exercise a dominant influence over large public undertakings within the meaning of Article 2(b) of Commission Directive 2006/111/EC of 16 November 2006 on the transparency of financial relations between Member States and public undertakings, as well as on financial transparency within certain undertakings.32 Due to that dominant influence, they have the instruments at their disposal to bring about the necessary change more rapidly. Therefore, in such companies the objective of least 40 per cent of directors of the under-represented sex should be set at an earlier date.

Amendment  22

Proposal for a directive

Recital 24

Text proposed by the Commission

Amendment

(24) Determining the number of non-executive director positions necessary to meet the objective 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. Therefore, the number of board positions necessary to meet the objective should be the number closest to 40 per cent. At the same time, in order to avoid discrimination of the initially over-represented sex, listed companies should not be obliged to appoint members of the under-represented sex to half or more of the non-executive board positions. Thus, for example, members of the under-represented sex should hold at least one position on boards with three or four non-executive directors, at least two positions on boards with five or six non-executive directors, and at least three positions on boards with seven or eight non-executive directors.

(24) Determining the number of director positions necessary to meet the objective 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. Therefore, the number of board positions necessary to meet the objective should be the number closest to 40 per cent. At the same time, in order to avoid discrimination of the initially over-represented sex, listed companies and large public undertakings should not be obliged to appoint members of the under-represented sex to more than half of the board positions. Thus, for example, members of the under-represented sex should hold at least one position on boards with three directors, at least two positions on boards with four, five or six directors, and at least three positions on boards with seven or eight directors.

Amendment  23

Proposal for a directive

Recital 26

Text proposed by the Commission

Amendment

(26) In line with that case-law, Member States should ensure that the selection of the best qualified candidates for non-executive directors is based on a comparative analysis of the qualifications of each candidate on the basis of pre-established, clear, neutrally formulated and unambiguous criteria. Examples of types of selection criteria that 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 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.

(26) In line with Article 23 of the Charter of Fundamental Rights of the European Union and where applicable related case-law, Member States should ensure transparency in their recruitment, vacancy announcement, selection and appointment procedures while respecting private life with regard to the processing of personal data, recognised by the Articles 7 and 8 of the Charter. Examples of types of selection criteria that 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 at least equally qualified as the candidate of the other. Member States should ensure that companies that do not progress towards the Directive's key objective disclose additional information on their recruitment, selection and appointment policies, and in particular deliver concrete plans to improve gender balance on their boards.

Amendment  24

Proposal for a directive

Recital 27

Text proposed by the Commission

Amendment

(27) The methods of recruiting and appointing 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, the direct appointment of directors by individual shareholders or a vote in the shareholders' assembly on individual candidates or lists of candidates. 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. In this respect, this Directive only establishes a minimum harmonisation of selection procedures, 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 gender representation in the boards of listed companies.

(27) The methods of recruiting and appointing 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, the direct appointment of directors by individual shareholders or a vote in the shareholders' assembly on individual candidates or lists of candidates. This legislative instrument therefore respects the diversity of selection procedures while insisting that adjustments to these procedures are made in order to attain the aim of increasing women's participation on boards is attained. 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. In this respect, this Directive allows for a diversity of selection procedure with a view to attaining the objective of a more balanced gender representation in the boards of listed companies.

Amendment  25

Proposal for a directive

Recital 27 a (new)

Text proposed by the Commission

Amendment

 

(27a) Where preselection of candidates is based on election or voting procedures, for example by workers or their representatives, the procedures throughout the whole process should be adjusted in order to contribute to the attainment of the objective of more gender balance on the board of directors as a whole, while ensuring that the sex of the director elected in this procedure is not in any way predetermined.

Amendment  26

Proposal for a directive

Recital 28

Text proposed by the Commission

Amendment

(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 to disclose, upon the request of an unsuccessful candidate, not only the qualification criteria upon which the selection was based, but also 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 the Articles 7 and 8 of the Charter, and the obligation for listed companies to supply that information, upon request, to the unsuccessful candidate, 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.

(28) This Directive aims to improve the gender balance among directors of companies listed on stock exchanges and large public undertakings 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 and large public undertakings should therefore be required to disclose, upon the request of an unsuccessful candidate, not only the qualification criteria upon which the recruitment, selection or appointment was based, but also 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 the Articles 7 and 8 of the Charter, and the obligation for listed companies and large public undertakings to supply that information, upon request, to the unsuccessful candidate, 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.

Amendment  27

Proposal for a directive

Recital 29

Text proposed by the Commission

Amendment

(29) Where an unsuccessful candidate of the under-represented sex establishes the presumption they were equally qualified as the appointed candidate of the other sex, the listed company should be required to demonstrate the correctness of the choice.

(29) Where an unsuccessful candidate of the under-represented sex establishes the presumption they were equally qualified as the appointed candidate of the other sex, the company or undertaking in question should be required to demonstrate the correctness of the choice.

Amendment  28

Proposal for a directive

Recital 30

Text proposed by the Commission

Amendment

(30) Member States should provide for effective, proportionate and dissuasive sanctions for breaches of this Directive, which could include, inter alia, administrative fines and 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).

(30) Member States should provide for effective, proportionate and dissuasive sanctions for breaches of this Directive, which could include, inter alia, administrative fines and nullity or annulment declared by a judicial body of the appointment or of the election of directors made contrary to the national provisions adopted pursuant to Article 4(1) as well as forced dissolution, ordered by a competent judicial body in full respect of proper procedural safeguards, in cases of serious and repeated infringements.

Amendment  29

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

(31) Since the gender composition of the workforce has a direct impact on the availability of candidates of the under-represented sex, Member States may provide that where the members of the under-represented sex make up less than 10 per cent of the workforce the company concerned should not be required to meet the objective laid down in this Directive.

deleted

Amendment  30

Proposal for a directive

Recital 32

Text proposed by the Commission

Amendment

(32) Since listed companies should aim to increase the proportion of the under-represented sex in all decision-making positions, Member States may provide that the objective laid down in this Directive should be considered to be 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.

(32) Since the percentage of women among executive directors is even lower, an additional incentive should be created to increase the number of female executive directors. Member States may provide that the objective laid down in this Directive should be considered to be met where listed companies can show that directors of the underrepresented sex hold at least one third of all director positions under the condition that at least one of the executive directors is of the under-represented sex.

Amendment  31

Proposal for a directive

Recital 33

Text proposed by the Commission

Amendment

(33) 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 make individual commitments regarding the representation of both sexes among executive directors, to be achieved at the latest by 1 January 2020. These commitments should aim to achieve tangible progress from the individual company's current position towards better gender balance.

(33) In addition to the incentives relating to executive directors, and with a view also to further improving the gender balance among directors involved in daily management tasks, listed companies should be required to make individual commitments regarding a more balanced representation of both sexes among executive directors, to be achieved at the latest by 1 January 2020, and by 1 January 2018 in case of large public undertakings. These commitments should aim to achieve tangible progress from the individual company's current position towards better gender balance.

Amendment  32

Proposal for a directive

Recital 34

Text proposed by the Commission

Amendment

(34) Member States should require listed companies to provide information on the gender composition of their boards as well as information on how they managed to meet 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 gender balance among directors. Such information should be published and, where the company in question has not met the objective, it should include a description of the measures that it has taken so far and intends to take in the future in order to meet the objective.

(34) Member States should require listed companies and large public undertakings to provide information on the gender composition of their boards as well as information on how they managed to meet 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 and large public undertaking towards gender balance among directors. Such information should be published in an appropriate and easily accessible manner in the annual report and on the website and, where the company in question has not met the objective, it should include a comprehensive description of the measures that it has taken so far and intends to take in the future in order to meet the objective.

Amendment  33

Proposal for a directive

Recital 35

Text proposed by the Commission

Amendment

(35) Member States may have already taken measures providing for means to ensure a more balanced representation of women and men in company boards before the entry into force of this Directive. Such Member States should have an opportunity to apply those measures in place of the procedural requirements relating to appointments where they can demonstrate that the measures taken are of equivalent efficacy in order to attain the objective of a presence of the under-represented sex of at least 40 per cent among non-executive directors of listed companies at the latest by 1 January 2020 or at the latest by 1 January 2018 in case of listed companies which are public undertakings.

(35) Member States may have already taken measures providing for means to ensure a more balanced representation of women and men in company boards before the entry into force of this Directive. Such Member States should have an opportunity to apply those measures in place of the procedural requirements relating to appointments where they can demonstrate that the measures taken are of equivalent efficacy in order to attain the objective of a presence of the under-represented sex of at least 40 per cent among directors of listed companies or the one third objective referred to in Article 4(1)* of this Directive at the latest by 1 January 2020 or at the latest by 1 January 2018 in case of large public undertakings. The Commission should evaluate whether enough progress has been made towards the objectives of this Directive. If progress is insufficient in a certain Member State, the provisions of this Directive will automatically come into force for that Member State;

Amendment  34

Proposal for a directive

Recital 37

Text proposed by the Commission

Amendment

(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 gender representation among non-executive board members across the Union in line with the objectives set out in this Directive will not be achieved 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.

(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 gender representation among board members across the Union in line with the objectives set out in this Directive will not be achieved 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.

Amendment  35

Proposal for a directive

Recital 38

Text proposed by the Commission

Amendment

(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 achieve those objectives. Member States are given sufficient freedom to determine how the objectives laid down in this Directive should best be achieved taking national circumstances into account, in particular rules and practices concerning recruitment for board positions. This Directive does not interfere with the possibility for companies to appoint the most qualified board members, and it grants a sufficiently long period of adaptation for all listed companies.

(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 achieve those objectives. Member States are given sufficient freedom to determine how the objectives laid down in this Directive should best be achieved taking national circumstances into account, in particular rules and practices concerning recruitment for board positions. This Directive does not interfere with the possibility for companies to appoint the most qualified board members, and it grants a sufficiently long period of adaptation for all listed companies and large public undertakings.

Amendment   36

Proposal for a directive

Article 1

Text proposed by the Commission

Amendment

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.

This Directive lays down measures to ensure a more balanced representation of men and women among the directors of listed companies and large public undertakings by establishing measures aimed at accelerated progress towards gender balance while allowing companies sufficient time to make the necessary arrangements.

Amendment  37

Proposal for a directive

Article 2 – point 1

Text proposed by the Commission

Amendment

(1) ‘listed company’ means a company incorporated in a Member State whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC, in one or more Member States;

(1) ‘listed company’ means a company situated in a Member State whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC, in one or more Member States;

Amendment   38

Proposal for a directive

Article 3

Text proposed by the Commission

Amendment

This Directive shall not apply to small and medium-sized enterprises ('SMEs').

This Directive shall not apply to small and medium-sized and micro enterprises ('SMEs'), however Member states should put in place policies to support and incentivise SMEs to significantly improve the gender balance at all levels of management and on company boards.

Amendment  39

Proposal for a directive

Article 4 – title

Text proposed by the Commission

Amendment

Objectives with regard to non-executive directors

Objectives with regard to directors

Amendment  40

Proposal for a directive

Article 4 – paragraph 1

Text proposed by the Commission

Amendment

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.

1. Member States shall ensure that listed companies and large public undertakings in whose boards members of the under-represented sex hold less than 40 per cent of the director positions adjust their recruitment, including vacancy announcements, pre-selection, selection, or appointment procedures for all director positions, with the objective of attaining 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.

 

Member States shall ensure that listed companies make the adjustments at the appropriate stages of the recruitment, pre-selection, selection or appointment process. In particular, Member States shall ensure that companies select candidates for a board position from a gender balanced selection pool.

 

To the extent that the selection procedure takes place on the basis of a comparative analysis of the qualifications of each candidate, Member States shall ensure that such adjustments include the application of pre-established, clear, neutrally formulated and unambiguous criteria.

Amendment  41

Proposal for a directive

Article 4 – paragraph 1 a (new)

Text proposed by the Commission

Amendment

 

1a. Member States may provide that the objective, laid down in this paragraph, is met where listed companies and large public undertakings can show that members of the under-represented sex hold at least one third of all director positions, provided that they are represented among both types of directors – executive and non-executive. The number necessary for meeting this one third objective shall be the number closest to the proportion of one third.

Amendment  42

Proposal for a directive

Article 4 – paragraph 2

Text proposed by the Commission

Amendment

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.

2. The number of director positions necessary to meet the objective laid down in paragraph 1 shall be at least 40 per cent.

Amendment  43

Proposal for a directive

Article 4 – paragraph 3

Text proposed by the Commission

Amendment

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.

3. In order to attain the objective laid down in paragraph 1, and in accordance with Article 23(2) of the Charter of Fundamental Rights of the European Union, Member States shall ensure that, in the recruitment, selection and appointment of directors, priority shall be given to the competent candidate of the under-represented sex, unless an objective assessment taking account of all criteria tilts the balance in favour of the candidate of the other sex. To this end, the selection criteria must above all be clear, transparent and non-discriminatory.

 

In the case of a competence-based selection procedure, priority shall be given to the candidate of the under-represented sex in cases where that candidate is at least equally qualified as a candidate of the other sex in terms of suitability, competence or professional performance.

Amendment  44

Proposal for a directive

Article 4 – paragraph 4

Text proposed by the Commission

Amendment

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.

4. Member States shall ensure that listed companies and large public undertakings are obliged to disclose to an unsuccessful candidate, the number and gender of the candidates in the selection pool while respecting their anonymity in accordance with EU law on data protection, the qualification criteria upon which the recruitment, selection or appointment 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.

Amendment  45

Proposal for a directive

Article 4 – paragraph 4 a (new)

Text proposed by the Commission

Amendment

 

4 a. Member States shall ensure that 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.

Amendment  46

Proposal for a directive

Article 4 – paragraph 5

Text proposed by the Commission

Amendment

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.

5. Member States shall take the necessary measures, in accordance with their national judicial systems, to ensure that listed companies and large public undertakings are able to demonstrate that their appointment process has been carried out in compliance with the rule laid down in paragraph 3, particularly in cases 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 or large public undertaking to prove that there has been no breach of the rule laid down in paragraph 3.

Amendment  47

Proposal for a directive

Article 4 – paragraph 6

Text proposed by the Commission

Amendment

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.

deleted

Amendment  48

Proposal for a directive

Article 5 – paragraph 1

Text proposed by the Commission

Amendment

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.

1. Member States shall ensure that listed companies undertake further individual commitments regarding gender-balanced representation of both sexes among executive directors, in accordance with the procedures described in Article 4.

 

The aim of such commitments shall be to make tangible progress towards achieving better gender balance to be achieved at the latest by 1 January 2020, or, in case of large public undertakings, by 1 January 2018.

Amendment  49

Proposal for a directive

Article 5 – paragraph 2

Text proposed by the Commission

Amendment

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.

2. Member States shall require listed companies and large public undertakings to provide information to the competent national authorities once a year, where applicable in their annual reports, as from [two years after adoption], about the gender representation on their boards, distinguishing between non-executive and executive directors and about the progress made and the measures taken in view of the objectives laid down in Article 4(1) and in paragraph 1 of this Article, and where applicable, about the gender of all appointed directors during the reference period, and to publish that information in an appropriate, easily and accessible manner on their website.

Amendment  50

Proposal for a directive

Article 5 – paragraph 3

Text proposed by the Commission

Amendment

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.

3. Where a listed company or a large public undertaking 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 comprehensive description of the measures which the company has adopted or intends to adopt in order to meet the objectives or commitments.

Amendment  51

Proposal for a directive

Article 5 – paragraph 4

Text proposed by the Commission

Amendment

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.

deleted

Justification

The deletion of this part is not meant as a deletion of the text, but as a restructuring of the directive. This part is placed now as a separate article 8 (a) new. This is done in order to extend the competence of the equality body.

Amendment  52

Proposal for a directive

Article 6 – paragraph 2 – introductory part

Text proposed by the Commission

Amendment

2. The sanctions must be effective, proportionate and dissuasive and may include the following measures:

2. The sanctions must be effective, proportionate, progressive and dissuasive and may include the following measures:

Amendment  53

Proposal for a directive

Article 6 – paragraph 2 – point a

Text proposed by the Commission

Amendment

(a) administrative fines;

(a) early warning followed by progressive administrative fines;

Amendment  54

Proposal for a directive

Article 6 – paragraph 2 – point b a (new)

Text proposed by the Commission

Amendment

 

(ba) forced dissolution, ordered by a competent judicial body in full respect of proper procedural safeguards, in cases of serious and repeated infringements.

Justification

It should be made clear that a wide range of options are open to Member States when it comes to establishing a credible sanctions regime at the national level.

Amendment  55

Proposal for a directive

Article 6 – paragraph 2 c (new)

Text proposed by the Commission

Amendment

 

2 c. Member States shall report on the sanctions that are in place to comply with the provisions of this Directive.

Amendment  56

Proposal for a directive

Article 7 – paragraph 1

Text proposed by the Commission

Amendment

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 companies incorporated in their national territory, provided those provisions do not create unjustified discrimination, nor hinder the proper functioning of the internal market.

Member States are encouraged to introduce or maintain provisions which are more favourable than those laid down in this Directive with a view to achieve the aim of Article 23 of the Charter of Fundamental Rights of the European Union and to ensure a more balanced representation of men and women in respect of companies incorporated in their national territory, provided those provisions are geared towards the aim of this Directive and do not go beyond what is necessary to achieve this aim or do not create unjustified discrimination.

Amendment  57

Proposal for a directive

Article 8 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

Without prejudice to Article 4(6) and (7), Member States which before the entry into force of this Directive have already taken measures to ensure a more balanced representation of women and men among the non-executive directors of listed companies may suspend the application of the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5), provided that it can be shown that those measures enable members of the under-represented sex to hold at least 40 per cent of the non-executive director positions of listed companies by at the latest 1 January 2020, or at the latest 1 January 2018 for listed companies which are public undertakings.

Without prejudice to Article 4(6), Member States which before the entry into force of this Directive have already taken measures to ensure a more balanced representation of women and men among the non-executive directors of listed companies and large public undertakings or Member States where other e.g. self-regulatory measures aiming to ensure a more balanced representation of women and men among the non-executive directors of listed companies and large public undertakings exist may suspend the application of the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5) and the application of Article 5(1), provided that an assessment by the European Commission indicates that those measures enable members of the under-represented sex to hold either at least 40 per cent of the non-executive director positions of listed companies or the one-third objective referred to in Article 4(7) by at the latest 1 January 2020, or at the latest 1 January 2018 for public undertakings. The Member State in question shall notify this information to the Commission.

Justification

Also self-regulatory measures (e.g. corporate governance codes) that have proven efficient should justify the suspension of the procedural requirements.

Amendment  58

Proposal for a directive

Article 8 a (new)

Text proposed by the Commission

Amendment

 

Article 8a

 

Equality body

 

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)1 are also competent for the promotion, analysis, monitoring and support of gender balance on the boards of listed companies.

 

__________________

 

1 OJ L 204, 26.7.2006, p. 23.

Amendment  59

Proposal for a directive

Article 9 – paragraph 1

Text proposed by the Commission

Amendment

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, amongst others, comprehensive information about the measures taken with a view to attaining the objectives laid down in Article 4(1), information provided in accordance with Article 5(2) and information about individual commitments taken by listed companies pursuant to Article 5(1).

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, amongst others, comprehensive information about the measures taken with a view to attaining the objectives laid down in Article 4(1), information provided in accordance with Article 5(2) and information about individual commitments taken by listed companies and large public undertakings pursuant to Article 5(1).

Amendment  60

Proposal for a directive

Article 9 – paragraph 2 – subparagraph 1

Text proposed by the Commission

Amendment

Member States having suspended pursuant to Article 8(3) the application of the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5) shall include information in the reports mentioned in paragraph 1 demonstrating the concrete results obtained by the national measures referred to in Article 8(3). The Commission shall then issue a specific report ascertaining whether those measures effectively enable members of the under-represented sex to hold at least 40 per cent of the non-executive director positions by 1 January 2018 for listed companies which are public undertakings, and by 1 January 2020 for listed companies which are not public undertakings. The first such report shall be issued by the Commission by 1 July 2017, and subsequent reports shall be issued within six months after notification of the respective national reports under paragraph 1.

Member States having suspended pursuant to Article 8(3) the application of the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5) shall include information in the reports mentioned in paragraph 1 demonstrating the concrete results obtained by the national measures referred to in Article 8(3). The Commission shall then publish a specific report ascertaining whether those measures effectively enable members of the under-represented sex to hold at least 40 per cent of the non-executive director positions by 1 January 2018 for large public undertakings, and by 1 January 2020 for listed companies. The first such report shall be published by the Commission by 1 July 2017, and subsequent reports shall be published within six months after notification of the respective national reports under paragraph 1.

Amendment  61

Proposal for a directive

Article 9 – paragraph 2 – subparagraph 2

Text proposed by the Commission

Amendment

Member States in question shall ensure that listed companies, which by applying the national measures referred to in Article 8(3) have not appointed or elected members of the under-represented sex for at least 40 per cent of the non-executive director positions of their boards by 1 January 2018, where they are public undertakings, or by 1 January 2020, where they are not public undertakings, apply the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5) with effect respectively from those dates.

Member States in question shall ensure that listed companies and large public undertakings, which by applying the national measures referred to in Article 8(3) have not appointed or elected members of the under-represented sex for at least 40 per cent of the director positions of their boards by 1 January 2018, where they are public undertakings, or by 1 January 2020, where they are not public undertakings, apply the procedural requirements relating to recruitment, selection and appointments contained in Article 4(1), (3), (4) and (5) with effect respectively from those dates.

Amendment  62

Proposal for a directive

Article 9 – paragraph 3

Text proposed by the Commission

Amendment

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.

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, after consulting the European Parliament, the Council and the European Social Partners, shall evaluate in particular whether the objectives of this Directive have been achieved.

Amendment  63

Proposal for a directive

Article 9 – paragraph 4

Text proposed by the Commission

Amendment

4. In its report, the Commission shall assess whether, in the light of developments in the representation of men and women in 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 amend it.

deleted

PROCEDURE

Title

Gender balance among non-executive directors of companies listed on stock exchanges

References

COM(2012)0614 – C7-0382/2012 – 2012/0299(COD)

Committees responsible

       Date announced in plenary

JURI

22.11.2012

FEMM

22.11.2012

 

 

Opinion by

       Date announced in plenary

EMPL

22.11.2012

Rapporteur

       Date appointed

Marije Cornelissen

12.12.2012

Rule 51 – joint committee meetings

       Date announced in plenary

       

17.1.2013

Discussed in committee

23.4.2013

19.6.2013

8.7.2013

 

Date adopted

9.7.2013

 

 

 

Result of final vote

+:

–:

0:

37

5

4

Members present for the final vote

Regina Bastos, Edit Bauer, Heinz K. Becker, Jean-Luc Bennahmias, Phil Bennion, Pervenche Berès, Vilija Blinkevičiūtė, Milan Cabrnoch, Alejandro Cercas, Ole Christensen, Derek Roland Clark, Minodora Cliveti, Marije Cornelissen, Emer Costello, Andrea Cozzolino, Frédéric Daerden, Karima Delli, Sari Essayah, Richard Falbr, Marian Harkin, Nadja Hirsch, Stephen Hughes, Danuta Jazłowiecka, Ádám Kósa, Jean Lambert, Patrick Le Hyaric, Olle Ludvigsson, Thomas Mann, Elisabeth Morin-Chartier, Csaba Őry, Siiri Oviir, Konstantinos Poupakis, Sylvana Rapti, Licia Ronzulli, Elisabeth Schroedter, Joanna Katarzyna Skrzydlewska, Jutta Steinruck, Ruža Tomašić, Traian Ungureanu, Inês Cristina Zuber

Substitute(s) present for the final vote

Roberta Angelilli, Jan Kozłowski, Ria Oomen-Ruijten, Gabriele Zimmer

Substitute(s) under Rule 187(2) present for the final vote

Anneli Jäätteenmäki, Jacek Włosowicz


OPINION of the Committee on the Internal Market and Consumer Protection (4.6.2013 )

for the Committee on Legal Affairs and the Committee on Women's Rights and Gender Equality

on the proposal for a directive of the European Parliament and of the Council on improving the gender balance among non-executive directors of companies listed on stock exchanges and related measures

(COM(2012)0614 – C7-0382/2012 – 2012/0299(COD))

Rapporteur: Antonyia Parvanova

SHORT JUSTIFICATION

The proposal aims at promoting gender equality in economic decision-making, especially for listed companies, in line with Article 3 (3) TEU, and to utilise the existing talent pool for more equal gender representation on company boards, thereby contributing to the proper functioning of the internal market and to the Union's Europe 2020 objectives and its target increasing the employment rate of women to 75% by 2020.

The Rapporteur supports the objectives pursued by the proposal. She particularly welcomes the choice of a Directive as a tool to establish a harmonised legal system in the Union and to create greater legal certainty, to reduce administrative burdens resulting from the divergent application and implementation of the principles of gender equality at the boardroom by the Member States.

Promoting equality between women and men is one of the EU's main objectives, as reflected in its Treaties (Article 3(3) TEU and articles 8 and 157 TFUE), as well as in the Charter of Fundamental Rights (Article 23). The EU institutions have undertaken various efforts to promote gender equality in economic decision-making. In 2010, the Commission identified equality in decision- making as one of the priorities of its Women's Charter (COM (2010)78 final) and of its strategy for Equality between Women and Men 2010-2015 (COM (2010) 491 final) in 2010. In March 2011 Commission Vice-President Reding launched the 'Women on the board pledge for Europe', calling for publicly-listed companies to voluntarily commit to increasing the proportion of women in boardrooms to 40% by 2020. The call for signing up the pledge lasted one year, but only 24 companies had signed.

Despite these efforts, persistent gender imbalances in corporate leadership remain. According to the Commission's data, 15.8% of seats on the boards of the largest listed companies are currently held by women. Progress in rectifying the situation has been slow with an annual increase of just 0.6%. Results are divergent in different MS.

The Commission's proposal is supported by all the Commissioners holding economic posts: Vice-President Tajani (Industry and Entrepreneurship), Vice-President Almunia (Competition), Vice-President Rehn (Economic and Monetary Affairs), Commissioner Barnier (Internal Market and Services) and Commissioner Andor (Employment and Social Affairs), as well as by the Vice-President Viviane Reding.

The Rapporteur identified several areas which are of key interest to this Committee and on which further attention was paid in her contribution, notably the functioning of the internal market, the legal certainty for companies and the reflection of consumer preferences in the company decision-making choices. The Rapporteur paid due attention to the fragile economic situation in the EU and in what ways this proposal can contribute positively to achieving financial stability and long-term economic growth.

According to EC data, women control about 70% of global consumer spending decisions. Therefore, more women in management positions can provide a broader insight in economic behaviour and consumer choices. Products and services that are more in line with consumers' needs and preferences can boost sales figures.

Another key element is ensuring legal certainty for companies operating in more than one MS. Currently, there are disparities in rules to advance gender equality on company boards across the Union. Such diversity can have a negative impact on the functioning of the Single Market. Companies with cross-border operations need a coherent, reliable legal framework, in order to fully benefit from the access to the Single Market and to achieve sufficient economic results.

In terms of the current economic environment, as numerous qualitative studies, have demonstrated there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. This is why enhancing female representation on the boards of publicly listed companies in the Union is not only catering to the principle of gender equality and non-discrimination but can also have a positive impact on the organisational and financial performance of companies concerned.

In the context of ageing population in EU, she believes that not utilising the potential of half of Europe's population for company board positions might slow down the development of our economy, the recovery of our financial structures and the capacity of the available human capital.

In her amendments, the Rapporteur also calls for MS to incentivise companies to achieve and report on progress in terms of respecting the principle of gender equality in their corporate boards, facilitating access of women to business networks and shaping their HR policy in such a way as to support the female talent pipeline.

The amendments proposed are balanced and confirm the original text by strengthening the above-mentioned aspects. The inclusion of those will improve the legal certainty of the proposal and will strengthen the key principles of gender equality thereby ensuring compliance with Articles 23 of the Charter of Fundamental Rights, 8 and 157 of the TFEU.

AMENDMENTS

The Committee on the Internal Market and Consumer Protection calls on the Committee on Women's Rights and Gender Equality, as the committee responsible, to incorporate the following amendments in its report:

Amendment  1

Proposal for a directive

Recital 6 a (new)

Text proposed by the Commission

Amendment

 

(6a) According to the Commission1 women currently control the majority of global consumer spending. A better representation of women in boards would provide the companies involved with a broader understanding of consumers' needs and economic behaviour. Therefore they can provide goods and services that are more in line with the consumers' demand.

 

________________________

 

1 European Commission DG Justice "Women in economic decision-making in the EU: A Europe 2020 initiative 2012

Amendment  2

Proposal for a directive

Recital 6 b (new)

Text proposed by the Commission

Amendment

 

(6b) The EU institutions and agencies should lead by example by improving gender balance. The principles laid down in this Directive should be incorporated into the rules governing the internal staffing procedures of the European Commission, the European Parliament, and all EU-institutions and agencies, including the European Central Bank. More efficient gender policies must be developed in all EU institutions to impact on recruitment to, training in, and the everyday functioning of the different EU institutions. For that purpose the institutions should ensure that gender balance is achieved in the recruitment of senior management, including Director-Generals, Directors and Heads of Unit.

Amendment  3

Proposal for a directive

Recital 6 c (new)

Text proposed by the Commission

Amendment

 

(6c) It is essential that the management of the Commission, the EU's executive body, improves its gender balance to represent better the European citizens. Member States are therefore called upon to nominate both male and female candidates for each position in the college of the Commissioners in order to achieve a gender balance in the Commission college.

Amendment  4

Proposal for a directive

Recital 6 d (new)

Text proposed by the Commission

Amendment

 

(6d) The European Central bank (ECB), the European System of Financial Supervision (ESFS) – including the European Systemic Risk Board (ESRB) – and the European Supervisory Authorities (ESAs) should comply with all aspects of equality and non-discrimination on the basis of gender. The Boards of Supervisors of the ESAs should also be encouraged to present a gender-balanced list of candidates for the positions of Chairmen and Executive Directors at the relevant hearing in the European Parliament. The final selection of these positions should be gender balanced. It is also important that the Steering Committee and Advisory Committees of the ESRB are gender balanced.

Amendment  5

Proposal for a directive

Recital 6 e (new)

Text proposed by the Commission

Amendment

 

(6e) The supervisory board of the European Central Bank (ECB), including the roles of Chair and Vice Chair, should be balanced from a gender perspective. Whenever a vacancy arises on ECB Executive Board those Member States that have adopted the euro as a currency should be encouraged to nominate two candidates, a male and a female, for the vacant position. The Member States should also be encouraged to appoint women as governors of the national central banks (NCBs) in order to achieve a gender balance in the Governing Council and the General Council of the ECB and on the General Board of the ESRB.

Amendment  6

Proposal for a directive

Recital 8

Text proposed by the Commission

Amendment

(8) At company level, it is widely acknowledged that the presence of women on boards improves corporate governance, because team performance and the quality of decision-making are enhanced due to a more diverse and collective mind-set incorporating a wider range of perspectives and therefore reaching more balanced decisions. Numerous studies have also shown that there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. Enhancing female representation on the boards of publicly listed companies in the Union can therefore have a positive impact on the performance of companies concerned.

(8) At company level, it is widely acknowledged that the presence of women on boards improves corporate governance, because team performance and the quality of decision-making are enhanced due to a more diverse and collective mind-set incorporating a wider range of perspectives and therefore reaching more balanced decisions. Numerous studies have also shown that there is a positive relationship between gender diversity at top management level and a company's financial performance and profitability. Enhancing female representation on the boards of publicly listed companies in the Union can therefore have a positive impact on the organisational and financial performance of companies concerned.

Amendment  7

Proposal for a directive

Recital 9

Text proposed by the Commission

Amendment

(9) Existing evidence also shows that labour market equality can improve economic growth substantially. Enhancing female presence in the boardrooms of listed companies in the Union not only affects the women appointed to boards, but also contributes to attracting female talent to the company and ensuring a greater presence of women at all levels of management and in the workforce. Therefore, a higher share of women on company boards has a positive impact on closing both the gender employment gap and the gender pay gap. Making full use of the existing female talent pool would constitute a marked improvement in terms of return on education for both individuals and the public sector. Female under-representation in the board rooms of publicly listed companies in the EU is a missed opportunity in terms of achieving long-term sustainable growth for Member States' economies at large.

(9) Existing evidence also shows that labour market equality can improve economic growth substantially. Enhancing female presence in the boardrooms of listed companies in the Union not only affects the women appointed to boards, but also contributes to attracting female talent to the company and ensuring a greater presence of women at all levels of management and in the workforce. Therefore, a more representative share of women on company boards has a positive impact on closing both the gender employment gap and the gender pay gap. Making full use of the existing female talent pool would constitute a marked improvement in terms of return on education for both individuals and the public sector. Female under-representation in the board rooms of publicly listed companies in the EU is a missed opportunity in terms of achieving long-term sustainable growth for Member States' economies at large.

Amendment  8

Proposal for a directive

Recital 10

Text proposed by the Commission

Amendment

(10) Despite the existing Union legislation aimed at preventing and combating sex discrimination, the Council recommendations aimed specifically at increasing the presence of women in economic decision-making and Union-level actions encouraging self-regulation, women continue to be strongly 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. 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. In January 2012, women occupied on average just 13.7 per cent of board seats in the largest publicly listed companies in Member States. Among non-executive directors only 15 per cent were women.

(10) Despite the existing Union legislation aimed at preventing and combating sex discrimination, the Council recommendations aimed specifically at increasing the presence of women in economic decision-making and Union-level actions encouraging self-regulation, women continue to be strongly under-represented 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, while certain EU institutions and agencies, such as the European Central Bank, also display a deeply problematic gender imbalance. 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. In January 2012, women occupied on average just 13.7 per cent of board seats in the largest publicly listed companies in Member States. Among non-executive directors only 15 per cent were women.

Amendment  9

Proposal for a directive

Recital 11

Text proposed by the Commission

Amendment

(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. Growing discrepancies between Member States are likely to increase given the very different approaches pursued by individual Member States to increase the representation of females on boards that are being pursued by individual Member States.

(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. Growing discrepancies between Member States could increase given the very different approaches pursued by individual Member States to increase the representation of females on boards that are being pursued by individual Member States. Therefore Member States should be encouraged to share information and disseminate best practice aimed at promoting gender balance, including achievements of companies which have Boards with established gender balance in their composition.

Amendment  10

Proposal for a directive

Recital 11 a (new)

Text proposed by the Commission

Amendment

 

(11a) Member States should adopt strategies moving towards a socio-cultural shift in their approach to gender balance by using versatile means to encourage women's participation in the management hierarchy and the taking up of proactive approaches and actions by employers. Such means could include inter alia promoting flexible work schedules, encouraging family friendly workplaces by providing access to day-care.

Amendment  11

Proposal for a directive

Recital 12

Text proposed by the Commission

Amendment

(12) The scattered and divergent regulation or the absence of regulation at national level as regards the gender balance on boards of listed companies does not only lead to discrepancies in the number of women among non-executive directors and different rates of improvement across Member States, but also poses barriers to the internal market by imposing divergent corporate governance requirements on European listed companies. Those differences in legal and self-regulatory requirements for the composition of corporate boards can lead to practical complications for listed companies operating across borders, notably when establishing subsidiaries or in mergers and acquisitions, as well as for candidates for board positions.

(12) The scattered and divergent regulation or the absence of regulation at national level as regards the gender balance on boards of listed companies does not only lead to discrepancies in the number of women among non-executive directors and different rates of improvement across Member States, but also poses barriers to the internal market by imposing divergent corporate governance requirements on European listed companies. Those differences in legal and self-regulatory requirements for the composition of corporate boards can lead to practical complications for listed companies operating across borders, notably when establishing subsidiaries or in mergers and acquisitions, as well as for candidates for board positions. Nevertheless, the enforcement of the provisions laid down in the directive should be irrespective of the different ways non-executive directors are selected in European companies' boards.

Amendment  12

Proposal for a directive

Recital 12 a (new)

Text proposed by the Commission

Amendment

 

(12a) One of the main factor for a correct implementation of the following directive is the effective use of criteria for the selection of non-executive directors, which would be set in advance and with full transparency, and where candidates' competencies are equally considered, regardless of their gender.

Amendment  13

Proposal for a directive

Recital 12 b (new)

Text proposed by the Commission

Amendment

 

(12b) In the context of ageing population and skills shortages, not utilising the potential of half of Europe's population for company board positions might slow down the development opportunities of our economy and the recovery of our financial structures. If half the talent pool is not even considered for leadership positions, the process and quality of appointments itself may be compromised, which would increase the distrust with the business power structures and might lead to reduction in the efficient realization of available human capital. Systematically including suitable candidates of both sexes ensures that new board members are selected from the very best candidates, both male and female and the society is rightfully reflected in corporate decision-making.

Amendment  14

Proposal for a directive

Recital 14

Text proposed by the Commission

Amendment

(14) While this Directive does not aim to harmonise national laws on the selection procedures 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 take appointment decisions for non-executive directors on the basis of an objective comparative assessment of the qualifications of candidates in terms of suitability, competence and professional performance is necessary in order to attain gender balance among non-executives directors. Only an EU-level measure can effectively help to ensure a competitive level-playing field throughout the Union and avoid practical complications in business life.

(14) While this Directive does not aim to harmonise national laws on the selection procedures 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 take appointment decisions for non-executive directors on the basis of a vacancy announcement opening up for applications and an objective comparative assessment of the qualifications of candidates in terms of suitability, competence and professional performance is necessary in order to attain gender balance among non-executives directors. Only an EU-level measure can effectively help to ensure a competitive level-playing field throughout the Union and avoid practical complications in business life.

Amendment  15

Proposal for a directive

Recital 17

Text proposed by the Commission

Amendment

(17) Companies listed on stock exchanges enjoy a particular economic importance, visibility and impact on the market as a whole. The measures provided for in this Directive should therefore apply to listed companies, which are defined as companies incorporated in a Member State whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, in one or more Member States. These companies set standards for the economy in its entirety and their practices can be expected to be followed by other types of companies. The public nature of listed companies justifies that they be regulated to a greater extent in the public interest.

(17) Companies listed on stock exchanges enjoy a particular economic importance, visibility and impact on the market as a whole. The measures provided for in this Directive should therefore apply to listed companies, which are defined as companies incorporated in a Member State whose securities are admitted to trading on a regulated market within the meaning of Article 4(1) (14) of Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, in one or more Member States. These companies set standards for the economy in its entirety and their practices can be expected to be followed by other types of companies. The public nature of listed companies justifies that they be adequately regulated in the public interest.

Amendment  16

Proposal for a directive

Recital 17 a (new)

Text proposed by the Commission

Amendment

 

(17a) Non-listed companies also play a major role in the economy. In principle, they could be included in the scope of this Directive. However, since the gender situation in these companies is not generally well-known and since particular provisions might be needed in order to reflect their specificities and varying nature within and across Member States, the inclusion should not be made until at a later stage. The Commission should carry out a thorough investigation into all relevant aspects highlighted above and present a consistent proposal with that effect.

Amendment  17

Proposal for a directive

Recital 18

Text proposed by the Commission

Amendment

(18) This Directive should not apply to micro, 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, even if they are listed companies.

(18) This Directive should not apply to micro, 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. This SMEs exemption should be applicable to both listed and, at a later stage, non-listed companies.

Amendment  18

Proposal for a directive

Recital 21

Text proposed by the Commission

Amendment

(21) In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the company's workforce and/or organisations of workers pursuant to national law or practice. The quantitative objectives provided for in this Directive should apply to all non-executive directors including employee representatives. However, the practical procedures 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.

(21) In several Member States, a certain proportion of the non-executive directors can or must be appointed or elected by the company's workforce and/or organisations of workers pursuant to national law or practice. The quantitative objectives provided for in this Directive should apply to all non-executive directors including employee representatives. However, the practical procedures 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 on the basis of careful and extensive consultations with social partners at the national level.

Amendment  19

Proposal for a directive

Recital 22

Text proposed by the Commission

Amendment

(22) Listed companies in the Union should be imposed obligations of means providing for appropriate procedures with a view of meeting specific objectives regarding the gender composition of their boards. Those listed companies in whose boards members of the under-represented sex hold less than 40 per cent of non-executive director positions should 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. Therefore, the Directive establishes the objective of at least 40 per cent of non-executive directors of the under-represented sex by that date. This objective in principle only concerns the overall gender diversity among the non-executive directors and does not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, it does not exclude any particular candidates for director positions, nor does it impose any individual directors on companies or shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.

(22) Listed companies in the Union should adopt appropriate procedures with a view of meeting specific objectives regarding the gender composition of their boards. Those listed companies in whose boards members of the under-represented sex hold less than 40 per cent of non-executive director positions should make the appointments to those positions on the basis of a vacancy announcement opening up for applications and 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. Therefore, the Directive establishes the objective of at least 40 per cent of non-executive directors of the under-represented sex by that date. This objective in principle only concerns the overall gender diversity among the non-executive directors and does not interfere with the concrete choice of individual directors from a wide pool of male and female candidates in each individual case. In particular, it does not exclude any particular candidates for director positions, nor does it impose any individual directors on companies or shareholders. The decision on the appropriate board members thus remains with the companies and shareholders.

Amendment  20

Proposal for a directive

Recital 26

Text proposed by the Commission

Amendment

(26) In line with that case-law, Member States should ensure that the selection of the best qualified candidates for non-executive directors is based on a comparative analysis of the qualifications of each candidate on the basis of pre-established, clear, neutrally formulated and unambiguous criteria. Examples of types of selection criteria that 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 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.

(26) In line with that case-law, Member States should ensure that the selection of the best qualified candidates for non-executive directors is based on a vacancy announcement opening up for applications and a comparative analysis of the qualifications of each candidate on the basis of pre-established, clear, neutrally formulated and unambiguous criteria. Examples of types of selection criteria that 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 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.

Amendment  21

Proposal for a directive

Recital 31

Text proposed by the Commission

Amendment

(31) Since the gender composition of the workforce has a direct impact on the availability of candidates of the under-represented sex, Member States may provide that where the members of the under-represented sex make up less than 10 per cent of the workforce the company concerned should not be required to meet the objective laid down in this Directive.

deleted

Amendment  22

Proposal for a directive

Recital 34

Text proposed by the Commission

Amendment

(34) Member States should require listed companies to provide information on the gender composition of their boards as well as information on how they managed to meet 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 gender balance among directors. Such information should be published and, where the company in question has not met the objective, it should include a description of the measures that it has taken so far and intends to take in the future in order to meet the objective.

(34) Member States should require listed companies to provide information on the gender composition of their boards as well as information on how they managed to meet 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 gender balance among directors. Such information should be published in an appropriate and easily accessible manner in the annual report and on the website and, where the company in question has not met the objective, it should include a comprehensive description of the measures that it has taken so far and intends to take in the future in order to meet the objective.

Amendment  23

Proposal for a directive

Article 1

Text proposed by the Commission

Amendment

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.

This Directive lays down measures to achieve 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, respecting Member States' economic and legal framework, while allowing companies sufficient time to make the necessary arrangements.

Amendment  24

Proposal for a directive

Article 4 – paragraph 1

Text proposed by the Commission

Amendment

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.

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 vacancy announcement opening up for applications and a comparative analysis of the qualifications of each candidate, by applying pre-established, clear and neutrally formulated criteria, in order to reach 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.

Amendment  25

Proposal for a directive

Article 4 – paragraph 3

Text proposed by the Commission

Amendment

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.

3. In order to attain the objective laid down in paragraph 1, Member States could encourage 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.

 

The criteria used for the selection referred in first sub-paragraph shall be clear, transparent and non-discriminatory. They shall be set in advance and made available for any candidate.

Amendment  26

Proposal for a directive

Article 4 – paragraph 3 a (new)

Text proposed by the Commission

Amendment

 

3a. The Member States shall define in their legislation the appropriate stage of the procedure of selection of non-executive directors for the purpose of reaching in the most effective way the objective set in paragraph 1.

Amendment  27

Proposal for a directive

Article 4 – paragraph 3 b (new)

Text proposed by the Commission

Amendment

 

3b. Where the selection referred in paragraph 3 is made through a vote of shareholders or employees, companies shall ensure that appropriate information relating to the measures set in this directive are provided to voters, including the sanctions incurred by the company because of non-compliance;

Amendment  28

Proposal for a directive

Article 4 – paragraph 6

Text proposed by the Commission

Amendment

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.

deleted

Amendment  29

Proposal for a directive

Article 4 – paragraph 7 a (new)

Text proposed by the Commission

Amendment

 

7a. Regardless of its membership or how it is organised, the Board of Directors is and must remain a collegial body representing all shareholders collectively. It is required to act at all times in the interests of the company. Attention should be paid notably to the gender balance of the board and ensuring equal representation of both sexes with view to successfully reflecting the interest of the shareholders and the composition of the consumer pull at large.

Amendment  30

Proposal for a directive

Article 5 – paragraph 2

Text proposed by the Commission

Amendment

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.

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 easily accessible manner in the annual report and on their website.

Amendment  31

Proposal for a directive

Article 5 – paragraph 2 a (new)

Text proposed by the Commission

Amendment

 

2a. Member States should create appropriate incentives to encourage companies to achieve and report on progress in terms of ensuring the respect of the principles of gender equality in their company boards; enhancing the possibility of shareholders to find well-qualified women candidates and stimulate exchange of information and best practices; facilitating access of women to important business networks for business development; shaping HR policy to support the female talent pipeline and ensure no gender bias exists;

Amendment  32

Proposal for a directive

Article 5 – paragraph 3

Text proposed by the Commission

Amendment

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.

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 comprehensive description of the measures which the company has adopted or intends to adopt in order to meet the objectives or commitments.

Amendment  33

Proposal for a directive

Article 6 – paragraph 2 – point b

Text proposed by the Commission

Amendment

(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).

(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). The nullity or annulment of the appointment or of the election of non-executive directors should not have any consequence on the validity of the decisions taken by the board.

Amendment  34

Proposal for a directive

Article 8 – paragraph 3 – subparagraph 1

Text proposed by the Commission

Amendment

Without prejudice to Article 4(6) and (7), Member States which before the entry into force of this Directive have already taken measures to ensure a more balanced representation of women and men among the non-executive directors of listed companies may suspend the application of the procedural requirements relating to appointments contained in Article 4(1), (3), (4) and (5), provided that it can be shown that those measures enable members of the under-represented sex to hold at least 40 per cent of the non-executive director positions of listed companies by at the latest 1 January 2020, or at the latest 1 January 2018 for listed companies which are public undertakings.

A Member State which before the entry into force of this Directive has sought to achieve a more balanced representation of women and men among the non-executive directors or among the directors (executive and non-executive) generally of listed companies may suspend the application of Article 4, 5 and 6 of this Directive in respect of listed companies which are public companies if it considers that members of the under-represented sex will, on average, hold at least 40 per cent of the non-executive positions or one third of the director (executive and non-executive) positions generally of such companies by at the latest 1 January 2020, or at the latest 1 January 2018 for listed companies which are public undertakings.

 

A Member State to which this paragraph applies shall notify the Commission accordingly.

PROCEDURE

Title

Gender balance among non-executive directors of companies listed on stock exchanges

References

COM(2012)0614 – C7-0382/2012 – 2012/0299(COD)

Committees responsible

       Date announced in plenary

JURI

22.11.2012

FEMM

22.11.2012

 

 

Opinion by

       Date announced in plenary

IMCO

22.11.2012

Rapporteur

       Date appointed

Antonyia Parvanova

18.12.2012

Rule 51 – joint committee meetings

       Date announced in plenary

       

17.1.2013

Discussed in committee

21.3.2013

11.4.2013

29.5.2013

 

Date adopted

30.5.2013

 

 

 

Result of final vote

+:

–:

0:

27

3

3

Members present for the final vote

Claudette Abela Baldacchino, Pablo Arias Echeverría, Adam Bielan, Preslav Borissov, Jorgo Chatzimarkakis, Birgit Collin-Langen, Lara Comi, Anna Maria Corazza Bildt, António Fernando Correia de Campos, Cornelis de Jong, Vicente Miguel Garcés Ramón, Evelyne Gebhardt, Małgorzata Handzlik, Stanimir Ilchev, Edvard Kožušník, Toine Manders, Hans-Peter Mayer, Sirpa Pietikäinen, Phil Prendergast, Mitro Repo, Zuzana Roithová, Heide Rühle, Catherine Stihler, Róża Gräfin von Thun und Hohenstein, Barbara Weiler

Substitute(s) present for the final vote

Jürgen Creutzmann, Ashley Fox, Ildikó Gáll-Pelcz, Anna Hedh, Roberta Metsola, Kyriacos Triantaphyllides, Sabine Verheyen, Josef Weidenholzer


PROCEDURE

Title

Gender balance among non-executive directors of companies listed on stock exchanges

References

COM(2012)0614 – C7-0382/2012 – 2012/0299(COD)

Date submitted to Parliament

14.11.2012

 

 

 

Committees responsible

       Date announced in plenary

JURI

22.11.2012

FEMM

22.11.2012

 

 

Committee(s) asked for opinion(s)

       Date announced in plenary

ECON

22.11.2012

EMPL

22.11.2012

IMCO

22.11.2012

 

Rapporteur(s)

       Date appointed

Evelyn Regner

18.1.2013

Rodi Kratsa-Tsagaropoulou

18.1.2013

 

 

Rule 51 – joint committee meetings

       Date announced in plenary

       

17.1.2013

Discussed in committee

9.7.2013

 

 

 

Date adopted

14.10.2013

 

 

 

Result of final vote

+:

–:

0:

40

9

2

Members present for the final vote

Raffaele Baldassarre, Regina Bastos, Edit Bauer, Sebastian Valentin Bodu, Françoise Castex, Andrea Češková, Marije Cornelissen, Tadeusz Cymański, Marielle Gallo, Zita Gurmai, Mary Honeyball, Lívia Járóka, Silvana Koch-Mehrin, Rodi Kratsa-Tsagaropoulou, Constance Le Grip, Klaus-Heiner Lehne, Astrid Lulling, Antonio Masip Hidalgo, Alajos Mészáros, Elisabeth Morin-Chartier, Angelika Niebler, Antonyia Parvanova, Bernhard Rapkay, Evelyn Regner, Raül Romeva i Rueda, Joanna Katarzyna Skrzydlewska, Francesco Enrico Speroni, Dimitar Stoyanov, Marc Tarabella, Rebecca Taylor, Alexandra Thein, Britta Thomsen, Angelika Werthmann, Cecilia Wikström, Marina Yannakoudakis, Tadeusz Zwiefka

Substitute(s) present for the final vote

Izaskun Bilbao Barandica, Mojca Kleva Kekuš, Eva Lichtenberger, Kartika Tamara Liotard, Doris Pack, Rui Tavares, Corien Wortmann-Kool

Substitute(s) under Rule 187(2) present for the final vote

Jutta Haug, Karin Kadenbach, Jürgen Klute, Judith A. Merkies, María Muñiz De Urquiza, Eva Ortiz Vilella, Andrés Perelló Rodríguez, Andrej Plenković, Catherine Trautmann

Date tabled

25.10.2013

Last updated: 7 November 2013Legal notice