European politicians backed proposals to increase the number of women on the boards of top European companies on Tuesday.
The European Parliament's employment committee voted by a majority of 37-to-5 in favor of a law aimed at ensuring that 40 percent of non-executive directors on European-listed companies are female by 2020.
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Currently only 15 percent of non-executive board members are female, and only 8.9 percent of executive members of top companies, according to the European Commission. At the current rate of progress, the Commission estimates it will take 40 years before the 40 percent target is reached.
The Commission said that a higher proportion of female executives will improve the financial performance of companies, citing evidence that suggests more women in high positions can create a more productive and innovative working environment.
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"Companies are starting to adapt, even before the law is in place: we see more and more companies across Europe appointing women to their supervisory boards," said European Commission Vice-President Viviane Reding. "The strong support of the European Parliament has helped accelerate progress."
Eleven member-states, including Spain and France, already have legislation in place to promote gender equality on company boards. However, the Commission, which proposed the new law in November 2012, hopes to standardize rules across the European Union.
Under the new law, companies could be forced to implement positive discrimination If they fail to achieve 40 percent female representation on their boards. Companies must also set a "flexi-quota" regarding the number of women on their board, and report annually on their progress.
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The law will be subject to votes by both the European Council and the European Parliament before it can be enforced. Two members of the European Parliament will now draft up proposals to be debated in Strasbourg, where amendments are likely to follow.