The European Union’s plans to enforce gender diversity quotas on boards are advancing, with calls in the European Parliament for EU-wide legislation to be put in place ensuring minimum female representation of at least 40%on supervisory boards by 2020.
Law firm Eversheds says that whilst plans to impose quotas are still some way off, there is a general acceptance that if member states/companies do not move to a more diverse board structure voluntarily, European legislators will enforce quotas in order to increase the pace of change and ensure greater female representation in listed companies across Europe.
Mark Spinner, partner at Eversheds, commented:
“Gender diversity is generally accepted as a good thing and there are now a number of reports which indicate that there is a positive correlation between greater female representation and company (share price) performance. However, once you look outside of political circles, support levels for the introduction of quotas are low, notably amongst corporates. Research undertaken for the Eversheds Board Report, in which directors were interviewed for their views on the topic, identified only one director who was definitely a supporter of quotas, although the majority were in favour of gender diversity.
“The vast majority of directors are concerned that the introduction of quotas will result in a move away from merit based selection in order to ensure delivery against arbitrary targets. The real issue for companies is ensuring that recruitment criteria which emphasise the importance of achieving the desirable balance of skills and attributes brought by a diverse board are properly set in place. One result of this would be a decreasing importance being placed on ‘previous experience,’ which would likely result in more female candidates coming under consideration.