The Council today gave its final go-ahead to EU rules to promote more balanced gender representation on the boards of listed companies.
The directive, which will have to be transposed into national law, lays down that at least 40% of non-executive director
positions in listed companies should be held by members of the
underrepresented 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 core of the directive stipulates that listed companies which do
not achieve the objectives will need to adjust their selection process.
They will have to put in place fair and transparent selection and
appointment procedures, based on a comparative assessment of the
different candidates on the basis of clear and neutrally formulated
criteria. When companies have to choose between equally qualified
candidates, they should give priority to the candidate of the
underrepresented sex.
Reporting and possible national adjustments
A country which has either come close to achieving the objectives or
put in place equally effective legislation before the directive enters
into force, may suspend the directive’s requirements relating to the
appointment or selection process.
Once a year, companies must provide information about the gender
representation on their boards and the measures they are taking to
achieve the 33% or 40% objective. Member states will publish a list of
the companies that have achieved the directive’s objectives, also on an
annual basis.
Background and next steps
Equality of treatment and opportunities between women and men is
among the principles set out in Treaties of the EU, as well as in the
European Pillar of Social Rights, a manifesto proclaimed by the Council,
European Parliament and European Commission in 2017.
The Employment and Social Affairs Council sealed its position on the
new law on 14 March 2022. On 7 June, Council representatives and the
European Parliament concluded their negotiations on a compromise text,
which is now being formally adopted by the co-legislators.
Member states have two years following the entry into force of the
directive to adopt the required national measures. The directive will
enter into force on the 20th day following its publication in the
Official Journal of the European Union. The directive still needs to be
adopted by the European Parliament.
Council
© Council of the European Union
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