EU Council Approves Rules to Improve Gender Balance on Listed Company Boards
The EU Council announced on Monday the approval of new rules aimed at the promotion of improved gender balance on the boards of public companies, bringing the proposals closer to being enshrined into law.
According to a recent survey by the European Institute for Gender Equality (EIGE), while women account for approximately 60% of university graduates in the EU, they are significantly under-represented on corporate boards, accounting for only 31.5% of total board members and 8% of board chairs.
The new rules set targets for listed companies to have women holding 40% of non-executive director positions by 2026, or 33% of all director positions in member states that apply the rules to both executive and non-executive directors. Companies choosing between equally qualified candidates are directed to give priority to the candidate of the under-represented sex.
The proposals also put in place requirements for companies that do not achieve these targets to put in place “fair and transparent selection and appointment procedures,” that utilize clear and neutrally formulated criteria to create a comparative assessment of candidates.
Additionally, the rules will require companies to report annually on the gender representation on their boards, as well as on the measures they have in place to reach the targets, and member states will publish a list of companies that have achieved the objectives.
Marian Jurečka, Deputy Prime Minister and Minister of Labour and Social Affairs of Czechia, said:
“The new rules will help to remove the obstacles women often face in their careers. I also believe that companies would greatly benefit from women realising their potential in decision-making positions. The positive impact of the measures will surely trickle down to all levels of national economies.”
In order to be adopted into law, the proposed rules will now be required to be adopted by the European Parliament. Following entry of the rules into force, member states will have two years to adopt the measures.