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Directive on "gender equality" in listed companies adopted by EP

Published: 24.11.2022

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· The European Parliament has finally approved a new directive introducing "gender equality" on the boards of listed companies.

· The directive's provisions oblige listed companies to introduce gender quotas for executive positions, which can lead to numerous abuses.

· Contrary to the replicated narrative, the directive will not act as a tool for gender equality - in fact, its solutions will have the effect of undermining the competence of women in senior positions.

· The directive was decided by a show of hands and a visual indication by the chairman as to whether the draft received a majority of votes.

· This form of voting on a directive that is absolutely binding on all member states raises serious doubts about the reliability of the result.

In mid-October, the Council of the European Union approved new EU legislation, which, in the form of a directive on "gender equality" among directors of listed companies, is to be implemented in EU member states as early as 2026. The legislative initiative, which has been underway for a decade, aimed at introducing enforced "equality" in management positions based on gender discrimination, was only awaiting approval from the European Parliament.

During the ongoing plenary session, the EP was expected to vote on the compromise text already agreed upon (which had been negotiated by the EP and the Council for many months). Significantly, the "vote" on the text took the form of acclamation. While it is normal practice in the EP to vote by a show of hands and only for the chairman of the session to visually determine whether a particular draft has achieved a "majority," there are justifiable doubts about this type of voting and evaluation of its results in the case of a controversial directive binding all member states. The directive, approved on November 22, will come into force as early as mid-December, and is expected to be met by 2026.

As the Ordo Iuris Institute pointed out in its commentary on the directive, the requirement that 40 percent of non-executive director positions in listed companies or 33 percent of all management positions be held by persons of the "underrepresented sex," contrary to the narrative being reproduced, does not mean the introduction of parity in favor of women. Indeed, the term "gender" used in the directive allows for a broad interpretation, according to which there are more than two genders, and gender itself - which is supposedly only a social construct - can be freely changed.

Although merit criteria are still to remain the basis for the selection of candidates for managerial positions, the factor that will ultimately tip the scales in favor of one of two candidates who are comparable in terms of competence will be their gender, with an additional "advantage" of belonging to "another discriminated group." This creates not only obvious room for abuse, but also the foundations for systemic discrimination on the basis of non-membership in a group widely recognized as discriminated against.

"In the case of Poland, the entire legal system, with the Polish Constitution at the forefront, is based on biological gender dualism, which means that in the Polish reality, the EU directive will be read as introducing a quota that serves primarily to place women in leadership positions. Contrary to appearances, however, it still cannot be considered a favorable solution for women, who today, without any statutorily imposed limits, occupy 38 percent of positions in the senior management of companies. Globally, the percentage of women in senior management is 29 percent, and among EU countries it is 30 percent. The introduction of forced quotas and sanctions for non-compliance with them will result in the fact that in the near future women who, thanks to their own work, competence and dedication, found themselves in high positions, will begin to be perceived as less competent people who found themselves in management only thanks to the quotas in force." - Anna Kubacka of the Ordo Iuris Center for International Law comments.

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