By the end of July 2026, all large, listed companies in the EU will have to take steps to increase the presence of women at the top level.
The directive on women on boards was adopted on Tuesday, ten years after it was first proposed.
As reported in a previous Cyprus Times report, the aim of the directive is to establish transparent recruitment procedures in companies, so that at least 40% of non-executive directorships or 33% of all directorships are filled by the underrepresented gender by the end of June 2026.
Individual qualifications should remain the key criterion in selection procedures, which should be transparent, in line with the new rules. Once a year, listed companies will have to provide the competent authorities with information on gender representation on their boards. If the targets have not been met, they should provide information on how they plan to achieve them. This information will be published on each company's website in an easily accessible way.
Small and medium-sized enterprises with fewer than 250 employees are excluded from the scope of the Directive.
Sanctions
For companies that do not comply and do not apply open and transparent recruitment procedures, Member States should introduce rules to impose effective, dissuasive and proportionate sanctions, such as fines. Judicial authorities will also be able to annul the constitution of a board if its composition violates the principles of the directive.
Statements by the rapporteurs
Rapporteur Evelyn Regner (Socialists, Austria) said: "The adoption of the directive ten years after the Commission's original legislative proposal is an important step forward for gender equality. We are finally giving women a fair chance to get into top corporate positions and improve corporate governance. Women are innovative, smart, strong and capable of great things. Today we are eliminating one of the main obstacles they face in trying to rise to top jobs: informal male-dominated structures. From now on, ability will count more in a selection process than ever before, as will transparency."
Co-rapporteur Lara Wolters (Socialists, Netherlands) commented: "In the ten years that this directive has been in the drawer, company boardrooms have remained predominantly male-dominated. But in the countries where binding quotas were introduced, significantly more women were appointed. With this law, these countries will no longer be the exception and gender balance on the boards of listed companies will become the norm across the EU."
Next steps
Now that the European Parliament and Council have formally approved the agreement, the Directive will enter into force 20 days after its publication in the Official Journal of the EU. Member States have two years to implement the Directive.
Related information
The European Commission presented its first proposal in 2012 and the European Parliament adopted its negotiating position already in 2013. The dossier remained pending in the Council for almost a decade until Employment and Social Affairs Ministers finally reached an agreement on their own position in March 2022. Parliament and Council negotiating teams reached an agreement in June.
In 2021 only 30.6% of board members in the EU's largest listed companies will be women. This percentage varies significantly from country to country, ranging from 45.3% in France to 8.5% in Cyprus. Despite the increase in the representation of women on boards, in 2022 less than 10% of the largest listed companies in EU countries will have a female chairman or CEO.
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