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EU should not impose quotas for women on boards, say Lords

The EU should not impose quotas on Member States for the number of women European companies should have on their boards.  That is the view of the Lords Internal Market, Infrastructure and Employment EU Sub-Committee, who will lead a debate on Thursday 10 January on its report, introducing a motion to the House to submit a reasoned opinion to the EU.

The reasoned opinion will restate the Committee's belief that it is for Member States to set their own targets for increasing the number of women in top level business positions, as it set out in its report, Women on Boards, published in November 2012. Whilst the Committee agrees that the EU has a significant role to play in supporting Member States, it believes that the imposition of quotas at an EU level would not comply with the principle of subsidiarity – the rule that that legislation should be made at the lowest appropriate level; in this case, by each country. 

Baroness O'Cathain, Chair of the Committee, said:

“The aim of this proposed directive is to increase the number of women on corporate boards throughout Europe. The Commission proposes setting a minimum objective of 40 per cent of female non-executive directors on the boards of all companies by 2020.

“The Commission is also claiming that EU level action will help overcome some Member State's resistance to regulate at national levels, as they believe there is a risk that they will be putting their country's businesses at a disadvantage compared with companies from other Member States.

“However, the Committee believes that the Commission's argument about the need for a Directive is unconvincing. We are not persuaded that a higher figure should be imposed in order to ensure a “critical mass” of women on boards in Member States where the number of women on boards is traditionally smaller.

“In our view, EU-wide legislative action at this time is both unnecessary and potentially counter-productive to the aims of increasing the number of women in senior positions in business. We believe that individual Member States are best placed to judge the most appropriate target levels for their companies. With the support of the EU and other Member States who are more advanced in this area, the Committee is convinced that this remains the best way to achieve the desired aims within the established timeframe.”

The Committee laid the report before the House of Lords in December, and it will be debated in the House on Thursday 10 January. If the House agrees with the report, it will send a “reasoned opinion” to the European Commission and other EU institutions, to signal its concern.

The debate is expected to begin at about 4.30pm.

To read a copy of the Committee's report, Women on Boards, please visit the Committee's webpage.

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