ZURICH (Reuters) – Switzerland’s government released an early draft of a law on Friday recommending that women occupy at least 30 per cent of management and board posts at top listed companies, in a tentative move to use legislation to boost numbers.
The proposed bill stopped short of calling for binding quotas used in other European countries – companies that fail to meet the target would have to explain themselves but would face no penalty under the plans.
But it could have a significant impact in Switzerland where few women occupy top posts in leading companies including UBS, Novartis and ABB, and efforts to use purely voluntary targets have largely failed.
“Sixty per cent of listed companies do not currently have a single woman on their board,” Justice Minister Simonetta Sommaruga told a news conference on Friday.
“The government has thought about how to fix that gender quota and whether we need binding measures with sanctions or without sanctions. It came to the conclusion that a comply-or-explain-clause can create considerable pressure.”
Under the draft law, which still has to be debated by other parties and bodies, companies would have to adapt to the new requirements within five years. They would be forced to explain any shortfall in their yearly compensation reports.
Women occupy just 16 per cent of executive board seats among the 20 biggest listed companies in Switzerland, according to a study by the Swiss employers’ association (SAV) and the independent wealth manager zCapital.
Switzerland’s Green party, which has long campaigned for quotas on company boards, said the measure did not go far enough.
“The Greens are calling for a minimum quota for women on boards and not just a target quota. The government must envisage the possibility of sanctions for this,” the party said in a statement.
“In Germany, quotas for women were approved by the government. Only Switzerland is once again moving at a snail’s pace,” the party added.
Norway became the first country in the world to impose a gender quota in 2003, requiring at least 40 per cent of public limited company board members to be women. Other countries, including France, Spain and Germany, have followed suit.