EU shatters the glass ceiling with its new “Women on Boards” Directive
By Alliant Global Knowledge Center
Following the initial proposal in 2012, an increasing number of European Union (EU) Member States have introduced statutory gender quotas on company boards to enhance gender balance. Nevertheless, progress has been slow, variable across EU Member States, and women remain underrepresented on companies’ boards of directors, and this in every Member State.
The new “Women on Boards” Directive
Given the high variance across Member States, the EU Parliament adopted Directive (EU) 2022/2381 on improving the gender balance among directors of listed companies and related measures, The Directive will enter into effect on 27 December 2022, i.e., 20 days after its publication into the Official Journal of the EU. All EU Member States will then have until 28 December 2024 to transpose its provisions into their national legislation; and ensure that larger listed companies (with more than 250 employees that are registered in a EU Member States) meet or are striving to meet gender boardroom goals of 40% of the underrepresented gender among non-executive directors or 33% among all directors, by 30 June 2026; and report against these targets annually on their company website and to local authorities.
All EU Member States will be required to enforce the provisions of the Directive, via annual publication of companies that do meet the gender equity targets and the applicable penalties.
The EC monitors gender equity in decision-making roles and synthesizes its findings through its annual report on equality between women and men. The EC intends to lead by example, with its goal of reach a gender balance of 50% at all levels of its management before 2025.