Swiss cabinet insists on gender quota for company boards

Justice Minister Sommaruga says the amendments adapt the stock corporation law to the requirements of the 21st century Keystone

The cabinet has endorsed plans to impose a gender quota for boards and managements of listed Swiss companies as part of a wide-ranging legal amendment to be discussed by parliament. 

The bill includes a minimum 30% quota for women on company boards and at least 20% for members of company managements. 

“The cabinet agreed that rules are necessary,” said Justice Minister Simonetta Sommaruga on Wednesday. 

However, the bill stops short of imposing sanctions for companies which fail to implement the quota within five years for executive boards or ten years for management. Instead, it proposes a “comply or explain” regulation as a best practice standard.

Sommaruga said the draft was taking into account opposition from the business community by proposing long transition periods. The government published the broad outline of the legal amendment last December. 

In recent years self-regulation in Swiss companies has not resulted in a gender balance in top management positions. 

According to the 2016 Schilling report on gender diversityExternal link, the proportion of women in executive posts among the 100 largest Swiss companies rose from 10% in 2010 to 16% in 2016. Meanwhile women occupy only 6% of management positions, a figure that has not changed since 2013.  

On average, 39% of employees in the 100 biggest Swiss firms are women, compared with 23% of middle managers and 15% of top managers. 

Earlier this month Switzerland defended its gender equality record and the situation of women before a United Nations committee in Geneva. 

The issue of fewer women on executive boards and in other top management and decision-making positions was discussed extensively. The panel highlighted concerns about “structural barriers and gender bias”. 

“Switzerland still lacks affordable childcare facilities, family-friendly working models and paternity leave,” it declared. “The prevailing gender wage gap in both the public and private sectors continues to have a negative impact on women’s career development and pension benefits.”

Commodities

As part of the wideranging amendment to public limited company law, the cabinet wants firms in the commodities sector to publish payments in excess of CHF100,000 ($99,024) to state authorities.

Sommaruga said on Wednesday the measure was necessary to boost transparency in the sector and protect Switzerland – an international hub of commodities companies – from a reputation risk.

Glencore already publishes its government payments under its obligation to European Union laws, whilst Trafigura has chosen to give up this information voluntarily.

The overhaul of the stock corporation law is aimed at easing regulations for newly founded companies and wants to make it easier for firms to raise additional share capital.

It also enshrines in law proposals approved by Swiss voters in 2013 to limit excessive salaries and other financial benefits to chief executives and board members.

Sommaruga said she was hopeful that parliament would approve the bill despite stiff resistance by the business community to a first draft.

“It is a stock corporation law for the 21^st century. It proposes flexible solutions and is not a straitjacket for businesses,” she said.