The Council and European Parliament have agreed today that listed companies should aim to have at least 40% of their non-executive director positions held by members of the under-represented sex by 2026. If member states choose to apply the new rules to both executive and non-executive directors, the target would be 33% of all director positions by 2026.
The Council and the European Parliament today reached a provisional political deal on a new EU Directive including the mentioned targets in order to promoting a more balanced gender representation on the boards of listed companies.
The Directive pushing gender equality in the boards of listed companies is not just an ideological matter but is grounded in the facts: evidence has shown that more balanced boards make better decisions. Having more women in economic decision-making positions is also expected to boost gender equality within companies and society more generally. Allowing both women and men to fulfil their potential is crucial for economic growth and competitiveness in Europe.
“Thank you to all those who worked on this key file for a decade.
This is a great day for women in Europe. It’s also a great day for companies.B ecause more diversity means more growth, more innovation”, said Ursula von der Leyen (President of the EU Commission) on the political agreement to push gender equality on company boards reached today.
Roberta Metsola (President of EU Parliament) adds: “The #womenonboards Directive is a win-win. Beneficial for women, for men, for businesses, for employees.
Today’s agreement will see more women taking the lead in the business sector. 🇪🇺 companies will gain with more women in leading roles. We can level the playing field”
In the case a member state do not reach these targets, listed companies will have to put in place transparent procedures for the selection and appointment of board members designed to rectify the situation, such as a comparative assessment of the different candidates on the basis of clear and neutrally formulated criteria.
On the contrary, a country which, before the entry into force of the directive, has either achieved progress coming close to the objectives or put in place equally effective legislation, can suspend the directive’s requirements related to the appointment or selection process.
Bacground and next steps
At the Council meeting of 14 March 2022, Ministers of employment and social affairs reached a general approach, which cleared the way for negotiations with the European Parliament to start. Since then, three rounds of negotiations (trilogues) with the Parliament have taken place.
Within the Council, the agreement reached with the EU Parliament today will first be submitted to Coreper for approval before going through the formal adoption procedure.