A European Union (EU) directive that will require companies listed in one or more EU member states to have gender-balanced boards was finally agreed to by the Council of Ministers, and awaits formal adoption by the European Parliament. Under the directive, a minimum of 40% of nonexecutive director positions in listed companies must be held by individuals of the underrepresented sex by 30 June 2026. In member states that choose to apply the directive to both executive and nonexecutive directors, the target will be lower — 33% of all director positions by 30 June 2026. Member states will have two years to introduce implementing measures into national law after the directive enters into force (20 days after publication in the Official Journal). 

Highlights

• Companies will have to provide information annually about their board’s gender representation and the measures taken to achieve the gender targets. 
  
  
• Member states will publish annually a list of companies that have achieved the directive’s objectives.
  
  
• Organizations that do not achieve the targets will have to adjust their selection process, and use fair and transparent selection and appointment procedures based on comparative assessments of the different candidates. Preference must be given to equally qualified candidates of the under-represented sex, unless an objective assessment tilts the balance in favor of a candidate of the other sex.
  
  
• Member states that nearly achieve the targets, or that have equally effective laws in place before the directive enters into force, can suspend the directive’s requirements relating to the appointment or selection process. 
  
  
• The member state that will regulate a listed company is the country in which the company has its registered office, rather than the one on whose regulated market the company trades its shares.

Currently, women comprise 31.5% of board members of the EU’s largest publicly listed companies, and 8% of board chairs.
 

Related resources

• Press release (Council of Ministers, 17 October 2022)
• Directive (Council of Ministers, 10 October 2022)
• Largest listed companies: Presidents, board members and employee representatives (EIGE, 1 June 2022)