On 23 October 2012, the European Commission announced that it was postponing its presentation of a proposed legislative measure, aimed at increasing gender balance on company boards in the EU.

According to press sources, the reason for postponing its plan to force companies to allot 40% of their board seats to woman by 2020 is the fact that the Legal Service of the Commission questioned the legality of the draft legislative proposal. The Legal Service is of the opinion that member states cannot be obliged to reach quotas for females, but admitted that member states could do more to address gender inequality on company boards. This was confirmed by the minutes of the meeting, which also recorded doubts over subsidiarity, the choice of legal instrument and the effect the proposed measures might have on companies already facing significant economic challenges.

Press sources further announced that the College of Commissioners will vote on (a new version of) the legislative proposal on 14 November 2012.

The legislative measure on gender balance on company boards has been drafted based on the results of a public consultation, launched on 5 March 2012, on possible action at EU level to redress the continuing gender imbalance on corporate boards in Europe and on the findings of a Progress Report, Women in economic decision-making in the EU, published on the same date (see Legal update, Gender imbalance in corporate boards: European Commission consultation).

Two days after the Commission had withdrawn its legislative proposal on gender balance on company boards, the European Parliament (EP) plenary session confirmed the rejection of candidate for European Central Bank (ECB) Executive Board member Yves Mersch, as recommended by the EP's Economic and Monetary Affairs Committee.

The EP has been regularly and insistently raising the issue of gender equality in the ECB. Ahead of the plenary vote, the EP Economic and Monetary Affairs Committee stressed that it was not their intention to call into question Mr Mersch's credentials.

Background: In the European Pact for Gender Equality (2011-20), the Council urges action at member state and EU levels to adopt measures to close gender gaps and combat gender segregation on the labour market (see Legal update, Council adopts European Pact on gender equality and considers European Commission progress report on equality between men and women). Furthermore, the Commission stated in its strategy for equality between women and men (2010-15) that it would address the gender imbalance in business decision-making through targeted initiatives (see Legal update, European Commission adopts new strategy on gender equality). It has also called on publicly-listed companies to sign a Women on the Board Pledge by March 2012, making a voluntary commitment to increase women's presence on their boards to 30% by 2015 and to 40% by 2020 by actively recruiting qualified women to replace outgoing male board members (see Legal update, Gender balance in boardrooms: first two companies sign up to "Women on the Board pledge").

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