3.2.5 Reflection

The Belgian quota approach for listed companies is strict and serious sanctions are imposed for non-compliance. As the most updated figures of the Institute show, by 2017, not all listed companies have complied with the legislation, but most of these companies seem to have provided valid reasons for their non-compliance. Only a limited percentage, 4.2 percent, of the listed companies did not comply with the legislation at all (Section 3.2.4.1). A new progress report is needed to determine whether the legislation has indeed been effective in increasing the number of women on the board to one-third, but it is already promising that almost all listed companies have either managed to meet this requirement or have provided a valid justification for not (yet) doing so. However, Belgian companies were not given a chance to increase the number of women on their boards of their own volition (without legislation in place), so it is not entirely clear whether progress would also have been made with less stringent legislation.

The Belgian quota could have been even more progressive if it would have provided that the number of women on the board should be rounded up when determining whether the quota was met. As it currently stands, the percentage can be rounded off to the nearest whole number meaning, in some cases, that a lower percentage of women on the board will suffice (for instance if the board consists of four or seven board members) (see also Section 3.4).1 It is not completely clear from the legislation who is entitled to impose a sanction on the individual board members in case of non-compliance with the quota. Is the general meeting authorized to suspend the financial and non-financial benefits of the board members and how does that work in practice given that the general meeting does not have access to the company bank accounts? Furthermore, it is not completely clear why the legislator chose to only apply the quota to the supervisory board when the company has a two-tier board. It would have been more progressive if the quota had also been applied to the management board in the two-tier board. When the quota is not applicable to the management board, the law is less stringent for two-tier boards, which can in turn lead to companies changing their board form to a two-tier board to evade the law.