Anne Peters is Professor of International and Constitutional Law, University of Basel, and currently fellow at the Wissenschaftskolleg Berlin.
1. Background and core contents of the proposed Directive
On 14 November 2012, the EU Commission tabled a proposal for a Directive on a highly sensitive issue and did so without using the ‘Q-word’ (COM(2012) 614 final). The Commission bases its proposal on Art. 157(3)TFEU which empowers the EU 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’. The proposed Directive requires that
‘Member States shall ensure that listed companies in whose boards members of the under-represented sex hold less than 40 percent 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.’ (Art. 4(1)).
The Directive further holds that
‘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.’ (Art. 4(3)).
The proposed Directive is equally applicable to various board structures for listed companies that exist in member states, both to dual systems (separate management and supervisory boards) and to unitary systems combining management and supervisory functions.
Measures to improve the gender balance through quotas are highly controversial both politically and in legally. Many states of the world have been experimenting with quotas for women in public employment/civil service and for political elections/party lists. Imposing by law quotas for women onto the business sector raises additional legal issues, because such legislation interferes with the business actors’ rights of property, economic freedom, and the freedom of association. Reacting to the conspicuously meagre presence of female managers, some EU member states, notably Norway and Denmark, have already introduced quotas, goals, or reserved seats in the boards of companies’ management positions. In other states such as Germany, such a policy is totally contested. This post sketches out the main legal issues hoping to trigger further debate.