As previously reported, the European Commission adopted a proposal for a gender Directive which plans to introduce a 40% “minimum objective” for the proportion of female non-executive directors (“NEDs”) on EU listed companies, and the Directive passed the subsidiarity test in January 2013.

On 20 September 2013, the Committee on Economic and Monetary Affairs published its Opinion: whilst fully supporting the Commission's objectives, the Committee concluded that the draft Directive does not go far enough, both in terms of scope and measures. The Committee urges EU institutions to lead by example in terms of gender balance both to set standards for the private sector, and to improve the legitimacy of the EU. The Directive's scope should be extended (i) to non-listed companies above SME threshold within two years of the Directive's implementation; and (ii) to the EU institutions and the European Central Bank (ECB), argues the Committee. Further, the Committee recommends deleting the provision which would exempt companies from compliance where women represent less than 10% of the workforce; such companies should be brought in scope.

The Committee highlights the need for companies within each Member State to promote women at all management levels to ensure, in turn, a sustained increase in women at executive and board levels. The Committee proposes an amendment to encourage listed companies to put in place training and mentoring programmes, and a new requirement for a gender policy which could set out details of relevant measures implemented, mentoring schemes and career development guidance for women, human resource strategies to encourage diverse recruitment and any flexible working arrangements.

In terms of compliance, the Committee advocates the "comply or explain model": companies should be required to set individual targets for their gender balance among executive and non-executive directors and disclose publicly their compliance and any measures planned in order to reach the targets.

The Directive is due to be discussed by the European Parliament at the plenary session on 19 November 2013.