The boards of listed companies across all EU Member States will need to reflect a more balanced gender representation following entry into force of the EU’s gender balance on corporate boards directive.
The new directive sets a target for EU large listed companies of 40% of the underrepresented sex among their non-executive directors and 33% among all directors.
The deadline for the transposition by Member States was 28th December 2024, and companies need to meet the targets by 30 June 2026.
The share of women in corporate boards is 34% on average in the EU. Since 2010, the representation of women in corporate boards has improved in most EU Member States, but the extent of progress varies considerably and in some Member Sates it is stagnating. For example, in 2024, women accounted for 39.6% of the board members of the largest listed companies in countries with binding gender quotas, compared to 33.8% in countries with soft measures, and just 17% in countries that have taken no action at all.
By now, Member States need to have transposed the directive’s rules into their national legislation, including:
- Specific binding measures for the selection procedure of board directors, with transparent and gender neutral criteria.
- Preference rule for the candidate of the underrepresented sex – in case of equally qualified candidates of both sexes.
- The disclosure of qualification criteria if requested by an unsuccessful candidate.
- Individual commitments from listed companies to reach gender balance among executive directors.
- Reporting on the composition of boards and obstacles to meet the target of the Directive, where applicable, and actions taken to overcome these.
- Effective, proportionate, and dissuasive penalties for companies failing to comply with transparent selection and reporting obligations. Penalties are defined by Member States, and can include fines and nullity or annulment of the contested directors’ appointment if needed.
The Directive also requires Member States to publish a list of companies that reached the gender balance targets as well as designate one or more bodies for the promotion, analysis, monitoring and support of gender balance on boards.
Gender Balance on Corporate Boards Directive
EU action to promote gender balance in decision-making – European Commission
