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Gender balance among directors of listed companies

The principles of equal treatment and equal opportunities between women and men are set out in the EU Treaties and also in the European Pillar of Social Rights. With these principles in mind, the Council of the European Union adopted the final text of the directive on improving the gender balance among directors of listed companies on 17 October 2022. This directive aims to achieve a more balanced representation of women and men among the directors of listed companies by establishing effective measures to accelerate progress towards gender balance, while allowing listed companies sufficient time to make the necessary arrangements for that purpose.

Two alternative objectives were already contained in the European Commission's proposal: members of the underrepresented sex to hold at least 40% of non-executive directors or 33% of all directors, although the latter option was given less visibility. Each Member State must ensure that listed companies are subject to one of the two objectives to be reached by 30 June 2026. Currently, according to the June 2022 EIGE survey of the EU's largest public limited companies, 31.5% of board members and 8% of board chairs are women. In order to achieve the objectives, Member States must ensure that listed companies which do not achieve the objectives, adjust the process for selecting candidates for appointment or election to director positions.

Member States should require listed companies to provide information to the competent authorities once a year about the gender representation on their boards, distinguishing between executive and non-executive directors and about the measures taken with a view to achieving the applicable objectives. Listed companies shall publish that information in an appropriate and easily accessible manner on their websites. Member States must also publish and regularly update, in an easily accessible and centralised manner, a list of the listed companies that have achieved either of the objectives.

Member States must lay down rules on effective, proportionate and dissuasive penalties applicable to infringements by listed companies and shall take all necessary measures to ensure that they are implemented. In particular, adequate administrative or judicial procedures should be available to enable the obligations deriving from this directive to be enforced. Such penalties may comprise fines or the possibility for a judicial body to annul a decision concerning the selection of directors made contrary to the national provisions adopted according to the directive or to declare it null and void.

Member States have 2 years to adopt and publish the provisions necessary to comply with the directive. Member States may introduce or maintain provisions which are more favourable than those laid down in the directive.