Law sets 30% quota for women on management boards
Belgium’s parliament adopted a plan in June 2011 to force public enterprises, and companies that are listed on the stock exchange, to give women 30% of the seats on management boards. The law, still to be approved by the Senate, is expected to come into force next year. Under the new rules, each time a board member leaves he or she is to be replaced by a woman until the quota is fulfilled. Members of boards that do not reach the quota will lose the benefits that come with their jobs.
Adoption by parliament
On 16 June 2011, the Belgian House of Representatives adopted legislation on quotas on boards of directors (in Dutch), which imposes a quota of one-third of women. The law (in Dutch), documented in full by the women’s archive RoSa, is still to be approved by the Senate, or upper house, but provides for the quota system to come into force from 2012 in state-owned companies such as telecoms operator Belgacom, the postal service and the lottery, and companies that are quoted on the stock exchange. Under the new rules, each time a director leaves, he or she is to be replaced by a woman until the quota is fulfilled. Companies will have six years to reach the target, with small and medium-sized enterprises (SMEs) being given eight years.
The law was supported by Socialists, Christian Democrats and Greens. Members of the Open Flemish Liberals and Democrats (Open VLD) party, and of the conservative party New Flemish Alliance (N-VA) voted against. MPs from the French-speaking liberal party the Reformist Movement (MR) abstained.
Change in content after criticism by the State Council
The wording of the law took into account the comments made by the Council of State on 26 April 2011, which, although describing the quotas as useful in addressing gender inequality on boards, sharply criticised the sanctions that had been originally proposed.
These sanctions, set out in a first proposal on representation on company boards (in French and Dutch, 1.3Mb PDF) in March by the parliamentary committee, had declared that if companies did not comply, their decisions would be declared void. This proposal was never voted in the plenary since its opponents asked for the advice of the State Council. In the new version, directors of boards with less than a third of women will be sanctioned by losing the benefits accruing to their position. If the quota has still not been reached one year later, then a new board will be appointed. The benefits, both financial and material, will be reassigned when the board complies with the law. An evaluation of how the law is working, once enacted, is not planned for another 12 years.
Reactions by social partners
The caretaker Minister of Employment and equal opportunities, Joëlle Milquet, welcomed the law, pointing to the fact that in 2010 women accounted for less than of 7% of the directors of listed companies at the Stock Exchange. She was working on a comparable legislative proposal when the government fell in April 2010.
The Belgian Enterprise Federation (VBO) reacted with disappointment to the law, saying it had been lobbying for a voluntary 30% quota within the next seven years. Its proposal forms part of the code of corporate governance it is promoting. Under this code, ‘comply or explain’ would be the basic rule for companies. A spokesperson for the federation said a law would hamper companies from functioning effectively, and accused politicians of not having much faith in the initiative of company bosses.
Trade unions, however, welcomed the legislation, saying that self-regulation would only lead to disappointment. A spokesperson for the biggest union, the General Christian Trade Union Federation (ACV-CSC), stressed that the law is also about giving women chances to move up in the company hierarchy, and added that supporting women to combine work and family life are essential for this.
At the beginning of June the European Parliament’s Women’s Rights Committee voted in favour of proposals to impose quotas, allowing competent women greater access to top jobs. The Belgian legislature has now followed comparable legislative action in France (FR1101031I) and Norway (NO0602102F). In March this year, the Austrian government agreed on the implementation of female quotas for supervisory boards of state-owned companies (AT1103011I).
The onus is now on Belgian enterprises, who could get some help from the initiative Women on Board. This is an association created by five women in 2009, who want to facilitate access for Belgian enterprises to a pool of available and competent women as board members.
Guy Van Gyes, Higher Institute for Labour Studies (HIVA), Catholic University of Leuven (KUL)