Sweden: Government Drops Gender Quota Proposal for Corporate Boards

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By Marcus Hoy

The Swedish government has dropped a proposal (2016:32) that would have imposed mandatory gender quotas for the boards of major companies. In a Jan. 18 statement, the committee charged with drafting the proposal said that it had not gained sufficient support in parliament and alternative measures aimed at encouraging voluntary gender quotas will now be investigated.

First published in September 2016, the proposal would have forced approximately 280 listed companies and 50 state-owned companies to ensure that at least 40 percent of their board members were female. The makeup of employee representatives on company boards would have been subject to similar quotas. Companies not achieving the requirement by 2019 would have faced annual fines of up to 5 million kroner ($556,000). The plan had originally been supported by the minority center-left government and Sweden's Confederation of Trade Unions (LO) but opposed by industry groups headed by the Confederation of Swedish Industry (SN).

On Jan. 18, the Parliamentary Committee on Civil Affairs published a report confirming that the proposed law would not be presented to parliament. While the gender makeup of listed companies' boards was “unsatisfactory,” the committee said in a statement, gender diversity “should not be promoted through binding legislation.”

Lack of Support

On Jan. 12, the SN issued a statement in anticipation of the committee's findings. The proposal was “completely unnecessary,” according to the confederation, because the proportion of women on listed companies' boards has been “increasing rapidly” in recent years and stood at over 30 percent in 2016 compared with 22 percent in 2010. The proportion of women in other senior positions is also increasing, SN said.

“When it became clear it didn't have a majority, the government decided not to move forward with the proposal,” SN spokesman Peter Isling told Bloomberg BNA Jan. 19. “We welcome this decision. There is now a stable political majority against quotas, and I guess that this majority will hold for a while. As a result, we believe that new initiatives and proposals concerning quotas are less probable.”

“It is now clear that this bill will not be implemented,” LO economist Torbjorn Hallo told Bloomberg BNA in a Jan. 19 statement. “What this means for the concept of gender quotas in the future is very difficult to answer. It's important to distinguish between quotas based on gender and quotas based on other factors. LO supports quotas based on gender and supported this specific proposal.”

To contact the reporter on this story: Marcus Hoy in Copenhagen at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

The committee's statement, which includes a link to the report, is available here, the SN statement here, both in Swedish.

For more information on Swedish HR law and regulation, see the Sweden primer.

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