Plans to introduce quotas for the number of women on the boards of listed companies across Europe have been rejected in favour of a 40 percent objective.
While the original proposals would have resulted in 40 percent female representation on the boards of publicly-traded companies by 2020, these have now been replaced by an objective to meet this goal, with penalties for non-compliance yet to be decided.
While companies must have gender-neutral criteria for choosing non-executive directors, they should favour the female candidate if they are underrepresented on the board.
However, as long as these measures are put in place, companies may escape punishment, even if they do not meet the objective by 2020.
Business secretary Vince Cable welcomed the news, saying that such measures were best considered at national level.
“We believe that the UK’s business-led, self-regulatory model, as set out in the Davies Review, is the best approach for us. We will now consider the Commission’s proposal carefully and work with other Member States to ensure the final directive supports our efforts to ensure we have diverse and effective boards.”
In his review, Lord Davies recommended that the FTSE 100 leading companies should aim to have at least 25 percent female representation by 2015.