Last year the Vice-President of the European Commission and Commissioner for Justice, Viviane Reding, told EU companies they had one year to voluntarily increase the number of women on their boards otherwise they would have to face mandatory measures. However, just 24 companies signed the so-called ‘Women on the Board Pledge for Europe’, committing themselves to raise female representation on their boards to 30% by 2015 and 40% by 2020. Viviane Reding said, “I regret to see that despite our calls, self-regulation so far has not brought about satisfactory results”. Ms Reding is convinced that self-regulatory initiatives are not enough and seems ready to move forward with regulatory intervention.

On 5 March, the European Commission launched a public consultation aiming at identifying measures the EU should take to deal with the lack of gender balance in boardrooms of listed companies in Europe. The deadline for the consultation is 28 May 2012, then the European Commission will decide whether to present a legislative initiative to improve the gender balance in the boards of companies listed on stock exchanges. Viviane Reding is likely to present legally biding rules after the summer, including quotas to increase the representation of women on corporate boards as well as sanctions applied to companies that do not meet the proposed objectives.

Any proposals presented by the Commission obliging listed companies to increase the number of women on their boards would have the support of the European Parliament but they are likely to face opposition from several member states, including the UK. Norman Lamb, minister for employment relations, has recently said, “We think getting more women on corporate boards is important. But for now, we do not support quotas, nor do we think it’s appropriate for Europe to seek to impose them.”

According to Marina Yannakoudakis MEP, ECR spokesman for Women’s Rights and Gender equality in the European Parliament, “We should encourage sustainable and meaningful change to the way women are represented at a senior level in companies, but we should do so through voluntary targets rather than mandatory minimums.” She is absolutely right when she said, “We have to persuade more company chairmen to appoint women to their boards as well as providing support to businesses which wish to improve diversity. Quotas are intimidation not motivation. Companies need to do more, but not under threat of sanctions from Brussels.” Helena Morrisey, founder of the 30pc Club, also believes “Quotas actually undermine the principle of equality and are patronising to women. Directors need to be there on merit.”

According to the European Commission “As well as being a fundamental right, gender equality is crucial for the EU’s growth and competitiveness”. Viviane Reding said, "The lack of women in top jobs in the business world harms Europe's competitiveness and hampers economic growth.” There is no doubt that gender balance benefits business, but business would benefit more if there was less regulation. As Bill Cash emphasised in his pamphlets, “It’s the EU Stupid” and “UK Growth strategy: harsh EU realities and weasel words”, the EU regulations “are strangling British businesses with anti-innovative and non-competitive policies”. He said, “the overregulation within the EU as a whole (including the Working Time Directive and social and employment legislation) simply doesn‘t allow the oxygen for enterprise and small businesses which is needed for them to be successful.”