Sweden’s parliament has rejected plans to introduce legislation that would fine listed companies who fail to appoint women to at least 40% of board seats.

The leftwing government announced in September that it was drafting the legislation, but the centre-right opposition and a far-right party, which together hold a majority in parliament, told parliament’s law review committee on Thursday that they would not support the project.

“The current gender distribution on the boards of listed companies is not satisfactory. However, the committee thinks a more even gender distribution should be encouraged through other means than legislation,” parliament summarised on its website.

“I regret it … We’re advancing very slowly towards gender equality in the boardroom,” the enterprise minister, Mikael Damberg, of the Social Democrats, told the TT news agency.

Women hold 47.5% of jobs in Sweden, and 32% of board positions in listed companies – higher than the 23% average in the European Union, but below the European commission’s goal of 40% by 2020 for major European companies.

The Swedish government had hoped that by 2019 it would have introduced annual fines of between 250,000 and 5m kronor (between £23,000 and £460,000), depending on a company’s market capitalisation.

Sweden’s wholly owned state companies have already surpassed the 40% target, with women holding half of those board positions and four of 10 board chairs, according to government figures.

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