In January 2010, a bill was adopted by the French National Assembly increasing the representation of women on boards of directors (the Bill). The Bill provides for legally binding quotas to boost the percentage of women on boards of directors of French listed companies up to (i) at least 20 per cent within three years, and (ii) at least 40 per cent within six years. When the board of directors is composed of less than nine members, the difference between the number of directors of each gender at the end of the six-year period should not be higher than two. As currently drafted, the Bill provides that any appointment of a director made in violation of these rules would be declared null and void, and that, under certain circumstances, the decisions of a board of directors which does not comply with these quotas could also be declared null and void.

The Bill has not yet been considered by the French Senate and is expected to be discussed during next fall’s session.

In the meantime, on April 19, 2010, the two main associations representing French corporations (the AFEP and the MEDEF) have issued a non-binding recommendation to be included in their Corporate Governance Code providing for the same target percentages as those proposed in the Bill. Pursuant to this recommendation, the three- and six-year periods shall begin either (i) from 19 April 2010, or (ii) from the admission of the company’s securities on a regulated market where such admission takes place after such date. This recommendation provides that boards of directors of French listed companies that do not yet have any women directors should propose the nomination of a woman director by their 2012 shareholders’ meeting at the latest. While this recommendation is not binding, the AFEP/MEDEF Code is the primary standard for corporate governance in France and as such is expected to be followed by most French listed companies