The Dutch Approach: Explanations in Annual Reports of Large Dutch Companies Dictated if 30% Women or 30% Men Targets not Reached
In the Netherlands a Bill including quota legislation for Dutch Boards was adopted unanimously by the Second Chamber on December 9th, 2009 and send to the Senate. The Bill became law, with effect from 1 January 2013 and introduced provisions to target a balanced distribution of seats between men and women on both the Executive as the Supervisory Boards of large Dutch corporations. In the specific statutory provision, a balanced distribution means that at least 30% of the seats in the Executive Board and Supervisory Board should be occupied by women and at least 30% of the seats by men. Companies subject to the proposed scheme, but that have not reached the desired targets should explain three different things in the annual report based on the “comply or explain” principle:
- Why the seats are not evenly distributed with at least 30% women or 30% men;
- How the company has tried to balance the distribution of seats to reach the 30% targets; and
- How the company seeks to achieve the 30% targets in the future.
No further sanctions are included. The scope of the statutory provision is limited in time and has a sunset-clause – the provisions will automatically be repealed by January 1, 2016. It is estimated that approximately 4,500 companies fall under this Legislation.
Professor Lückerath’s research focuses primarly on Dutch listed companies. In the Dutch Female Board Index she calculates (since 2007) the percentage women in both the Excetive Board and Supervisory Board of these companies. The study gets enormous media attention in the Netherlands each year and is used by many organisations to monitor the progress. Professor Lückerath will show that the quota legislation (with no sanctions) had a positive effect on female Supervisory Board members but percentage of women serving on the Executive Boards are still very low.