Diversity in Austrian Supervisory Boards

Please find here the full newsletter.

 

  1. Introduction

 

According to a study recently published, the quota of women in Austrian supervisory boards is only 17,4%. Furthermore, only 14% of the companies listed in Vienna have a female member of the management board.[1]

 

Under the current Act on Stock Corporations, as amended in 2012, the shareholders assembly must, when electing members of the supervisory board, take into account adequately aspects of diversity with respect to the representation of both genders and the structure of ages, in case of public companies also with respect to the nationality.

 

Since this general rule obviously did not have the intended effects, another amendment passed the Austrian parliament in July 2017. This Amendment provides precise rules for gender diversity in supervisory boards.

 

  1. Main Contents of the Amendment

 

Under the new rules supervisory boards shall, subject to certain preconditions, consist of at least 30% female and at least 30% male members.

 

2.1          Preconditions

 

The main preconditions are:

 

  • The company is listed on a stock exchange within the European Union or the European Economic Area or

 

  • the number of employees is at least 1000.

 

Thus, the new rules may apply not only to stock corporations but also to certain other types of companies such as companies with limited liability.

 

However, the quota has only to be fulfilled in case the supervisory board consists of at least 6 shareholder representatives. Furthermore, the new rules apply only if the workforce consists of at least 30% female and male workers each.

 

2.2          Legal Consequences

 

The quota has to be fulfilled by the supervisory board as a whole, i.e. including representatives of the works council, if any.

 

However, the shareholder representatives and/or the employees’ representatives may object against this principle. In such case the quota has to be fulfilled by each group of the supervisory board members (shareholders representatives as well as employees’ representatives) separately.

 

An election or delegation to the supervisory board of a person having the “wrong” gender is null and void and the respective position in the board remains vacant.

 

No such rules have been introduced for members of management boards.

 

2.3          Coming into Effect of the Amendment

 

The new rules become legally effective as at January 1, 2018. They have to be observed on the occasion of any election and/or delegation to the supervisory board taking place after December 31, 2017.

 

Elections or delegations of supervisory board members which have taken place before this date are not affected by the Amendment for the current term of the respective member. However, as at beginning of 2018 any election or delegation to a supervisory board where the quota is not yet fulfilled has to be made in compliance with the new rules until the quota is met.

 

It remains to be seen whether the goals of the Amendment will be reached in the near future.

 

Disclaimer:

 

Please note that this newsletter provides only a general information on Austrian law and cannot be deemed as a legal advice. For more information on the subject issue please contact our firm.

Law Firm Foglar-Deinhardstein KG

 

[1] Under Austrian corporate law, as in other continental European jurisdictions (such as Germany), a two-tier-system is established in general. This means that a supervisory board exists which is separate from the management board.

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