Legislative amendment: A more balanced ratio of men to women on management and supervisory boards

The Dutch Senate approved the amendment to the law enforcing a more balanced ratio of men and women in the top ranks of large companies.

The Dutch Senate approved the amendment to the law enforcing a more balanced ratio of men and women in the top ranks of large companies. The bill of caretaker Minister Dekker (Legal Protection) and Minister Van Engelshoven (Emancipation) was adopted with 49 votes in favour (out of 75 seats).

The bill requires large public and private limited companies to publish ‘appropriate and ambitious targets’ for the ratio of men to women on boards of directors, supervisory boards, and the highest echelons of management. These must be reported to the Social Economic Council (SER). If targets are not met, an explanation of reasons must be provided.

A balanced composition also means that the supervisory board of a listed company should consist of at least one third men and one third women. This applies to new appointments and any new appointment in violation of this rule is null and void. However, this does not affect the validity of the decision-making process.

The idea behind the two amendments is that equality of opportunity is increased, and that diversity leads to better decisions and thus better company results. The law will be evaluated after five years to see if expectations have been met.  It is expected that the change in the law will take effect on 1 January 2022 and will remain in force for a limited period of eight years.