On Oct 17, 2022, the European Council gave its final go-ahead to EU rules to promote more balanced gender representation on the boards of European listed companies. The 'Women on Company Boards’ Directive stipulates that at least 40% of non-executive board positions in listed companies should be held by members of the under-represented sex by 2026.
The proposal for the Directive was first presented by the European Commission in 2012 with the aim of promoting gender balance in decision-making at the highest levels of corporate governance. However, the proposal was blocked by several member states on the grounds that such legislation should be made at a national level.
Research shows that on average 31.5% of board members and only 8% of board chairs are women. The Directive aims to introduce fair and transparent selection and appointment procedures, so that at least 40% of non-executive board positions, either members of supervisory boards or non-executive directors in a one-tier board, are occupied by the under-represented sex. If member states choose to apply the new rules to both executive and non-executive directors, a target of at least 33% of all director positions applies. Small and middle-sized companies with fewer than 250 employees are excluded from the scope of the Directive.