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By Marcus Hoy
Sept. 14—A draft legal proposal (2016:32) that would introduce mandatory gender quotas for the boards of major Swedish companies is a restriction on corporate independence and a “weakening of ownership rights,” according to a Sept. 9 statement from the Confederation of Swedish Enterprise (SN). The proposal is supported by the center-left government and Sweden's Confederation of Trade Unions (LO).
According to a Sept. 9 statement from the Enterprise and Innovation Ministry, the lack of women in the boardroom “is a problem that needs fixing,” and a “near consensus” supports the measure.
The proposal would force approximately 280 listed companies and 50 state-owned companies to ensure that at least 40 percent of their board members are female. Employee representatives on company boards would be required to meet similar quotas. Companies not achieving the requirement by 2019 would face fines of between 250,000 and 5 million kroner ($30,000 and $590,000) per year, dependant on the company's size.
“The proposal was expected, but it is still regrettable,” SN CEO Carola Lemne said in the statement. “It amounts to interference in companies' ownership rights and will not help improve the business climate. If the government is serious about creating more investment and jobs, it should refrain from restricting the rights of company owners to manage their own businesses.”
In a Sept. 13 statement provided to Bloomberg BNA, LO vice chairman Berit Mullerstrom described the proposal as an “unfortunate but necessary” measure.
“The fact that SN is critical is not particularly surprising,” Mullerstrom said. “I do not share their belief that mandatory quotas work against gender equality. On the contrary, they help to create a more equal labor market.”
“It is important that representation on company boards is more equal, and if this can't be achieved voluntarily, then legal changes are the path to take,” she said. “We at LO believe we can do even better. For example, we believe that nominations to company boards should always be 50 percent female.”
While the ministry statement gave the effective date for the amendments as July 1, 2017, a ministry official told Bloomberg BNA Sept. 13 that the bill would likely be presented to parliament in the fall of 2017 and that work on the final text would begin following a three-month hearing stage, during which the opinions of interested parties would be sought.
The government is “optimistic” that the bill will be passed by parliament, the official said.
To contact the reporter on this story: Marcus Hoy in Copenhagen at email@example.com
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The draft proposal is available in Swedish here.
For more information on Swedish HR law and regulation, see the Sweden primer.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
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