• Impact date: Fall / autumn 2012

The Bills are seen as innovative as they impose obligations on approximately 1,100 of the largest Danish businesses to set targets and policies explaining how they intend to increase the share of the underrepresented sex in their business.

The Bills aim to ensure a more equal distribution of men and women in Danish boardrooms (the supreme governing body).

If / when they are passed, they are expected to change the gender distribution in Danish board rooms significantly.

Consultation on the Bills is taking place following a debate raised by Danish Minister for Gender Equality and Ecclesiastical Affairs to establish how the number of women on boards may be increased in companies.

Under the proposals contained within the Bills:

  1. Companies will set targets for the underrepresented gender on their boards. In most companies, women are the underrepresented sex and in the vast majority of cases the supreme governing body will be the board of directors.
  2. The obligation to define targets means that the businesses are required to determine the share (expressed also as number of board members) of the underrepresented gender and specify the time required to achieve this share.
  3. Companies will be required to establish a policy aimed at increasing the share of the un-derrepresented sex at all management levels and not only on the board of directors. However, this requirement only applies to companies with more than 50 employees. The policy must describe how the company intends to obtain a more equal gender distribution. An equal share of gender is defined as 40/60%. Non-compliance with the bills will be punishable by a fine.

Similar regulations at EU level

Regulations corresponding to the two new Bills may now be introduced to companies at EU level.

The European Commission has previously been a proponent for the introduction of female quotas, but, until now, has only implemented voluntary arrangements such as last year when the Commission encouraged companies in the European Union to agree to comply with female quotas of 30 and 40 per cent in 2015 and 2020 (respectively).

Now the European Commissioner of Justice has proposed a new Directive which will be presented in the autumn. The proposal implies that in large listed companies in EU member states, women must constitute 40 per cent of the board of directors in 2020. However, the proposal will not apply to companies with less than 250 employees or with annual revenues below 50 million Euros.

If the member states do not meet the quotas, they may be punished by fines, deprived of government grants or excluded from public tender procedures.