Gender Balance on Company Boards

Council and Parliament reach provisional political agreement

Despite the large number of highly qualified women in Europe, women are heavily under-represented in high-level positions, including in corporate boards. Over the past 10 years, the EU has been seeking to achieve more balanced representation of men and women on the boards of listed companies. While progress towards more equality in this area has been made, it remains slow and uneven across the Member States.

To this end, the Council of the EU and the European Parliament have reached a provisional political agreement on a directive to improve the gender balance on company boards. They agreed that by 2026, listed companies should aim to have at least 40% of their non-executive director positions or 33% of their non-executive and executive director positions held by members of the under-represented sex.

In the case of Member States that do not reach these targets, listed companies will have to put in place transparent and clear board appointment procedures. This would ensure that applicants are assessed objectively based on their individual merits, irrespective of gender.

On the other hand, Member States that have either adopted effective gender balance measures or are close to achieving the objectives, will be allowed the flexibility to suspend the procedural requirements set out in the Directive.

Gender balance in the boardroom is not only expected to boost gender equality in companies but also in society. Allowing both women and men to fulfil their potential is crucial for economic growth and competitiveness in Europe.

The European Parliament and the Council will have to formally approve the political agreement before it is published in the EU Official Journal. The Directive will enter into force 20 days after publication and Member States will then need to transpose the new elements of the Directive into national law within two years.