EU rules on boards’ balance now in force
An EU directive aimed at achieving a more balanced gender representation on the boards of listed companies across all member states has come into force.
The European Commission says that the current average share of women on corporate boards in the EU is 34%, but adds that progress “varies considerably” among states, and is “stagnating” in some.
The Gender Balance on Corporate Boards Directive entered into force at the end of 2024, setting a target for the EU’s large listed companies of 40% of the under-represented sex among non-executive directors and 33% among all directors.
The deadline for transposing the measure, first proposed in 2022, into national law was 28 December 2024, and companies must meet the targets by 30 June 2026.
Reporting requirements
The directive includes:
- Specific binding measures for the selection procedure of board directors, with transparent and gender-neutral criteria,
- A preference rule for the candidate of the under-represented sex – in cases where there are 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 requirements for companies on the composition of boards and obstacles to meeting the directive’s targets, and
- Penalties for companies failing to comply with transparent selection and reporting obligations.
The directive also requires member states to publish a list of companies that have reached the gender-balance targets, as well as designate one or more bodies to promote and monitor gender balance on boards.
Hadja Lahbib (commissioner for equality) warned that she would be following up to ensure that the legislation was properly transposed by EU states and applied “in a diligent manner”.
A private members’ bill on the issue from Fine Gael’s Emer Higgins lapsed with the dissolution of the last Dáil.
Roderic O’Gorman (Minister for Children, Equality, Disability, Integration and Youth) told the Dáil in October 2023 that his department was “examining existing national legislation and the options for transposition”.