New EU rules to improve Gender Balance in corporate boards enter into application

This article is brought to you in association with the European Commission.

The Gender Balance on Corporate Boards Directive entered into application at the end of 2024, aiming for a more balanced gender representation on the boards of listed companies across all EU Member States.

The 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 28^th December 2024, and companies must 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.

Clear representation targets and transparent appointments to improve gender balance

By now, Member States must 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.

Next steps

The Commission will check the notifications of Member States of their transposition measures, and whether these measures correctly transpose the provisions of the Directive. The Commission can launch infringement proceedings against Member States that fail to notify transposition, or to correctly transpose, the Directive. Throughout the transposition period, the Commission supported Member States to ensure correct transposition, for example through workshops and bilateral consultations.

Background

The 2024 Special Eurobarometer on Gender Stereotypes shows that EU citizens generally support gender equality as beneficial for all. Positive progress has been noted, with three out of four respondents agreeing that men also benefit from gender equality. 55% of EU citizens are in favour of introducing measures, to overcome the underrepresentation of women in decision-making.

Across the EU, women make up 34% of the share of members of boards in largest quoted companies, supervisory boards or boards of directors. The 2024 European Institute for Gender Equality (EIGE) Index rated women’s empowerment in economic decision-making at 57,6 points out of 100, 2,9 points higher than in 2023.

Legislative action to address gender imbalance continues to drive progress, and evidence shows that gender imbalance is more than twice as severe in countries that have taken no substantial action compared to countries that introduced measures. Countries with national quotas have the highest share of women as board members of listed companies.

The Commission proposed the Directive on gender balance in company boards in November 2012. After ten years of discussions, the European Parliament and the Counil reached a political agreement in June 2022. The deadline to transpose the provisions of the Directive fell two years later, on 28 December 2024.

To build on the progress accomplished under the Gender Equality Strategy 2020-2025, the Commission will adopt next year a Roadmap for Women’s Rights to further strengthen its commitment to a Union of Equality and and lay the groundwork to strengthen women’s rights and empower women in the labour market and leadership positions.

For More Information

Gender Balance on Corporate Boards Directive

EU action to promote gender balance in decision-making – European Commission

Special Eurobarometer 545 on Gender Stereotypes

infringements proceedings

2024 Gender Equality Index

Gender Equality Strategy 2020-2025