Better late than never: New targets to achieve gender balance across boards of EU listed companies
Nearly ten years after the proposal was first tabled, the European Parliament and the European Council have reached a landmark agreement which seeks to increase gender balance on corporate boards of publicly listed companies in the EU.
As part of this new political agreement, a new Directive will be put forward for approval which sets a target for EU companies listed on the EU stock exchange to accelerate progress towards more gender balance on their boards. The main elements of the new Directive are:
- At least 40% of the underrepresented gender must be represented in non-executive boards of listed companies or 33% among all directors;
- Where candidates are equally qualified for a post in companies where the target has not been achieved, priority should go to the candidate of the under-represented sex;
- Clear and transparent board appointment procedures must be introduced with the objective assessment based on merit, irrespective of gender;
- Companies that fail to meet the objectives must report the reasons and any measures they are taking to address the shortcoming; and
- Member states must set effective, proportionate and dissuasive penalties for failure to comply with the reporting obligations.
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