The European Union will apply from the beginning of this year a regulation that requires increasing the number of women on the boards of directors of listed companies. The goal is to achieve representation of at least 40% of positions by June 2026 at the latest.
Member States had until December 28 of last year to transfer to their national legislation the provisions of a directive that was agreed in November 2022. The consensus was achieved after ten years of negotiations and will apply to firms with 250 employees or more.
The EU asks for a 40% female presence in business leadership
Specifically, the regulations require that at least 40% of non-executive directors of listed companies are women by June 30, 2026. If the new rules were applied to both executive and non-executive directors, the objective is to achieve 33% taking into account all positions.
These domes They currently have 34% womenwhose representation improved “in most Member States, although the extent of progress varies considerably and in some is stagnant,” the European Commission explains in a statement.
To achieve this, the directive demanded that governments introduce measures to ensure that job selection processes with the boards of directors of listed companies are “transparent” and “neutral” from the gender point of view.
For example, the company must have a “preference rule” for candidates of the less represented sex “in case of equal qualifications” between them, as well as offer commitments to achieve gender balance among CEOs.
Companies must be transparent
The companies They will have to inform their qualification criteria, in case a candidate rejected for a position applies for them. They will have to report on the composition of their leadership and the obstacles to meeting the objectives of the directive and the measures to overcome them.
The Community directive also requires Member States to design a system of “effective, proportionate and dissuasive” sanctions for companies that do not comply with the requirements of transparency in selection processes. These sanctions may include fines or even the cancellation of selection processes carried out without meeting the criteria of the regulations, although they ultimately depend on the national authorities.
Finally, the directive obliges Member States to publish a list of companies that meet its objectives and to designate one or more organizations for the work of promotion, analysis, supervision and support to achieve gender equality on boards of directors.
“These rules will unleash the incredible potential of women to guide our growth and innovation. I will ensure that this important legislation is properly adopted by Member States and implemented diligently. Together we can break the glass ceiling,” highlighted the new commissioner. Head of Equality, Hadja Lahbib.
Source: Ambito
