4.3.3 Gender equality law in the Netherlands

Due to the international and European treaties promoting gender equality, Dutch law contains provisions to tackle inequalities between men and women, especially with regard to equal pay. As a result of the European Directives on equal pay and equal treatment for men and women of respectively 1975 and 1976 (see Section 4.3.2), the Netherlands adopted the Equal Pay Act (Wet gelijke beloning).1 Subsequently, in 1980, the Act on Equal Treatment of Men and Women (Wet gelijke behandeling van mannen en vrouwen) entered into force and in 1994, the Equal Treatment Act (Algemene wet gelijke behandeling) was enacted.2

Pursuant to the pressure exerted by the European Commission on national authorities of EU Member States to adopt a gender quota for corporate boards (Section 4.3.2) and the CEDAW reports (Section 4.3.1.3), which concluded that the Netherlands did not comply with CEDAW and recommended that the Dutch government adopts measures to correct the current situation, Dutch corporate law was amended in 2013 and a provision on target figures was introduced.3 As the idea of the Dutch government was that legal pressure on companies would only be needed for a few years to bring about the desired change,4 this law was enacted for a limited period of time, i.e., from 2013 until 1 January 2016, after which date the legal provisions automatically lapsed. However, in 2016, it became apparent that not much progress had been made (in Section 4.5 the results of our empirical research and the Female Board Index 2016 are discussed).5 Hence, in March 2016, a legislative proposal intending an extension of the provisions until 2020 was submitted to Parliament.6

The 2013 DCC target figure provisions require that corporate boards (i.e., the board of directors and the supervisory board) of large NVs and BVs (Dutch limited liability companies) comprise at least 30 percent female and at least 30 percent male members.7 The Dutch law obliged large companies to take these percentages into account in the following situations: (a) when appointing and nominating management board members; (b) in designing and formulating the profile of the size and composition of the supervisory board or the profile of the non-executive directors; and (c) when selecting, appointing and proposing supervisory board members and non-executive directors. The law requires that where a company does not meet the 30 percent-30 percent criteria, the company must explain in its annual report why it did not comply with the provision, i.e.: (a) why the seats are not distributed equally between men and women (i.e. 30 percent-30 percent); (b) in which way(s) the company tried to distribute seats equally; and (c) in which way(s) the company intends to achieve an equal distribution of seats.

Moreover, in the Netherlands, the EU Directive 2014/95 on the disclosure of corporate information concerning non-financial aspects and board diversity (see Section 4.3.2 above) is currently being implemented into the DCC. According to the Directive, this process has to be completed by 6 December 2016 as the norms will apply to companies in 2017.8

Finally, the Code also contains standards on board diversity. Listed companies have to apply the Code or have to explain why they deviate from it.9 Best practice provision III.3.1 of the Code stipulates that the profile of the supervisory board should be designed with regard to: ‘its size and composition, taking account of the nature of the business, its activities and the desired expertise and background of the supervisory board members’.10

The profile has to take into account:

Clearly, although gender is mentioned in the Code as one of the aspects of diversity, it certainly is not the only aspect. The explanatory notes reveal that diversity is considered important from the perspective of effective functioning of the supervisory board:

The motivation of this norm thus lies predominantly in the field of economic reasons rather than being inspired by rights-based motives. Indeed, corporate governance is commonly regarded as dealing with good governance and sound management of a company, and the Code is a product thereof.