Conservative MEPs today voted against EU plans to impose a compulsory female quota of 40 per cent on company boardrooms – with swingeing sanctions for firms that fail to comply.

The proposed directive would oblige all listed companies to have at least  40 per cent women among their non-executive directorships, as well as to publish their gender balance on websites and in annual reports.

Non-compliant companies would face huge fines, exclusion from tendering for public-sector contracts, denial of EU funding and even winding up.

It was approved after Labour and Liberal Democrat MEPs failed to oppose it, but Conservatives voted against the proposals as being bad for business and worse for women.

While they agree wholeheartedly that the problem of under-representation  is real and needs to be addressed, Conservatives believe Europe should have no role in dictating the response. Member states should be free to decide their own measures.

Conservatives  fear a quota system will only lead to tokenism and fail to address the underlying problems that hold women back.

Equality spokesman Marina Yannakoudakis, who is Conservative negotiator on the proposed legislation, said:  “The last thing we want to do is send a message to women that they will only get to the top if the law forces it. They want to get there on merit.

“Quotas might address the symptoms but they do nothing to treat the disease itself.  We instead need more training, more opportunity, more encouragement for women rather than compulsion for companies.

“A recent survey showed that only six per cent of businesswomen themselves want quotas. They know when they are being patronised.

 “A diverse boardroom, freely appointed, is good for business, whether that be reflective of gender, race, religion or whatever. That is why progress will be made. Quotas are no way to get there.”