A planned European Union law to impose penalties on companies that do not allocate 40 per cent of the seats on their boards to women has drawn enough opposition from Britain and other countries to face being blocked before it is officially proposed.

Nine EU countries have signed a letter to the European Commission, the bloc's executive agency, opposing the proposed law, which is scheduled to be published in draft form next month.

The proposal has been championed by Viviane Reding, vice-president of the commission, who has been pressing European companies since last year to improve the representation of women in top management or risk being penalized.

The signatories argue that although barriers to success for women in EU companies are “unacceptable”, national governments should determine what sanctions should be applied to companies that fail to improve.

Under EU voting rules, the proposed law requires the support of a weighted majority of member states in a system based broadly on the size of a country. The opposition of the nine countries that signed the letter could therefore be sufficient to scuttle the proposal.

One European diplomat said that many of the countries that signed the letter did not want to kill the proposal outright. They do, however, want to ensure that all decisions on how or whether to enforce quotas remain under the control of national authorities.

In fact, drafts of the proposal suggested that national governments would have some influence over sanctions that could range from financial penalties to exclusion from bidding on public contracts. Still, leaving more discretion to the member states could significantly dilute the plan drawn up by Ms Reding, who last year issued an ultimatum to European companies to increase representation of women in top management.

The letter also reveals the breadth of opposition from around the European Union to anything that imposes new requirements on business during an economic downturn.

That suggests that Ms Reding will encounter opposition from within the commission itself, where all 27 commissioners need to agree on the details of the proposed law before a draft is published. The measure must then be approved by national governments and the European Parliament before becoming law. — New York Times News Service

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