In context

Bill setting gender diversity quota for Dutch listed companies expected in spring 2020

February 14, 2020
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In context

The government in the Netherlands is working on a proposal (in Dutch) to introduce a 30% mandatory quota, to be implemented in stages, for both women and men on supervisory boards at Dutch listed companies. The proposal is currently expected to be sent to the Dutch Council of State for advice in the second quarter of this year. If, following the appointment of a supervisory or non-executive director, the 30% gender balance at a listed company has not improved, the appointment will be declared null and void and the vacancy will remain unfilled. “Listed companies” in this regard are Dutch NVs or BVs listed on a stock exchange, irrespective of whether that exchange is located in the Netherlands or abroad. This extends the scope of companies that will need to keep a close eye on this development and start preparing gender balance policies.

Additional targets for “large” companies

All listed and non-listed Dutch large NVs and BVs – around 5000 – will also have to set ambitious gender balance targets, for both the boardroom and senior management level. If a large company is listed, these targets will not apply to the supervisory/non-executive directors, as they are already covered by the mandatory 30% quota. By setting targets for the senior management level, the company can expand its talent pool of board-ready women. Large companies will have to account for achieving these targets in their annual reporting, by clarifying, in the case of deviation, why they have not met a target and by explaining how they intend to remedy this.

 

An NV or BV qualifies as large if it fulfills at least two of these criteria:

  • The value of the assets according to the balance sheet with explanatory notes exceeds EUR 20 million
  • The net turnover for the financial year exceeds EUR 40 million
  • There are, on average, 250 or more employees at the company during the financial year.

 

SER recommendations

These are some of the measures the Dutch government announced in their response (in Dutch) to last year’s report by the Dutch Social and Economic Council (SER). The government has indicated that it intends to adopt all of the SER’s recommendations. Click here for the full Dutch text of the SER’s report and here for an English summary.

 

Cultural diversity

In addition, as recommended by the SER, measures will be taken to enhance cultural diversity at the top, including introducing a “cultural diversity barometer” to gain more insight into cultural diversity within companies.

 

The Dutch Ministry of Social Affairs and Employment – in cooperation with Statistics Netherlands (CBS) – recently launched a “cultural diversity barometer” pilot by connecting citizen service numbers (BSN) of company employees to the CBS database; this has delivered useful data on company staff composition. How to use the barometer without infringing privacy law needs to be further analysed.

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