New bill to improve the men-women ratio in boards
As per January 1, 2022, a new bill to improve the men-women ratio in management boards and supervisory board of listed companies and certain large companies (BVs and NVs) is effective. Basically, two measures have been introduced pursuant to the bill: the ingrowth quota and the target scheme.
A so-called ingrowth quota has become applicable to supervisory boards of listed companies and will result in a more balanced composition of the respective supervisory boards: a supervisory board should consists of at least one third men and at least one third women. Pursuant to the ingrowth quota, an appointment of a new individual as member of a supervisory board will in principle be void if it does not lead to a more balanced composition of the supervisory board. The foregoing also applies to the appointment of non-executive directors of a listed company in case of a one-tier model.
For certain large companies, the bill has introduced an obligation to set appropriate and ambitious objectives in the form of a target scheme. This should result in a more balanced men-women ratio in the management board, supervisory board and key management. Furthermore, such large companies should prepare a plan in order to achieve the targets set forth in the target scheme and report the targets to the Social and Economic Council and in the management report.
The Social and Economic Council has reported earlier that most companies do not yet meet the requirements of a balance composition of their respective boards. In addition, most companies have not yet started with the required preparations. Given the fact that the bill has come into force, it is expected that the board composition will be on the board agenda’s soon.