BRUSSELS (Reuters) - Companies listed in EU countries could be forced to have more women on their boards, with a target of 40 percent by 2020, under rules proposed by the European Commission on Wednesday.
But states are divided on whether positive discrimination or pan-European rules are necessary, and some such as Britain have said they would oppose a legally binding target.
The rules would apply to the non-executive boards of publicly traded companies with over 250 staff, where the Commission estimates women account for fewer than 15 percent of positions.
"Priority shall be given to the candidate of the under-represented sex if that candidate is equally qualified as the candidate of the other sex," a Commission statement said.
The plan was backed by a majority of the body's 27 commissioners on Wednesday. But it is still at an early stage and details are unclear as talks must take place with member states and the European Parliament, which have to approve it before it becomes law.
It is the first attempt to introduce binding rules for a gender quota across the 27 countries in the European Union.
Countries could be obliged to penalize companies who do not favor women, under the rules.
Even though the plan sets the target of women to make up 40 percent of board members by 2020, opposition to mandatory quotas from several countries means it is not year clear whether this would be legally binding.
"There is still some ambiguity in the text," said a diplomat from one country that is skeptical about the proposed law.
Nine EU countries, including Britain, the Netherlands and Malta, made clear their opposition to the law in September. But one of the nine, Bulgaria, has since changed its mind, said one EU source.
Britain, the most outspoken critic of EU-imposed quotas, says its voluntary approach is adequate. "We have consistently argued that measures are best considered at national level," a British government spokeswoman said.
The share of women on the boards of British-listed companies rose to 12.5 percent in 2010 from 7 percent in 1999.
Norway - not a member of the European Union - imposed a 40 percent quota for non-executive boardrooms in 2003, a target that was reached in 2009. Norwegian companies can be liquidated if they fail to reach the target.
While men dominate boardrooms and public posts in the European Union, many women who have risen through company ranks resent quotas, saying that they give the impression that women have not been promoted on merit. (Editing by Sebastian Moffett and Pravin Char)