Two European Parliament committees will vote on Monday (14 October) on controversial rules that would require most stockmarket-listed European Union companies to ensure that 40% of all non-executive board members are women.

The proposal has already received backing from the MEPs steering it through two committees, on legal affairs and on women’s rights and gender equality, Rodi Kratsa-Tsagaropoulou, of the centre-right European People’s Party, and Evelyn Regner, of the Socialists and Democrats group. But they also argued for broadening the proposal to include certain types of listed companies that the European Commission had sought to exempt.

On 14 November 2012, Viviane Reding, the European commissioner for justice, fundamental rights and citizenship, presented draft legislation that would require member states to sanction publicly listed companies where women did not occupy at least 40% of non-executive boards seats by the target date of 2020. The Commission noted that 85% of non-executive board-member positions in publicly listed companies in the EU were held by men.

It also proposed applying the rules to publicly owned enterprises, which would be required to meet the same targets by 2018. But it decided to exempt listed companies with fewer than 250 employees and revenues below €50 million.

However, the MEPs leading the Parliament’s work on the legislative proposal argued that smaller companies should be included in the rules. Small and medium-sized companies are the “innovative backbone” of European industry and should be in the “vanguard” for gender equality, said Kratsa-Tsagaropoulou and Regner.

They also disagreed with the Commission proposal that companies where 90% of all employees were of the same sex should be excluded from the rules. Furthermore, they introduced an additional sanction for firms that do not meet the 40% target by 2020, barring such companies from taking part in public tenders.