The Council of the European Union (EU) has today given its definitive approval to the directive that establishes that in 2026 at least 40% of the non-executive directors of listed companies must be members of the underrepresented sex, which It is usually the female. And in the event that the Member States apply the new rule also to executive directors, 33% of the positions should be occupied by the sex with less representation.
The directive stipulates that companies that do not meet these objectives will have to adapt their selection and appointment processes to be “fair and transparent” based on “clear criteria, formulated in a neutral way,” the Council explains in a statement. Thus, when companies have to choose between two candidates with identical qualifications, they should give priority to the underrepresented sex.
Countries that are about to reach the objectives or that already have national regulations as effective as the directive before its entry into force may suspend the requirements of the community standard regarding the appointment or selection processes. However, once a year, companies must provide information on how each gender is represented on the board of directors and detail the measures they are taking to achieve the percentages established by law. In this sense, the Member States will publish, also annually, a list of the companies that have achieved the objectives established by the directive.
The ratification by the European Council of the new standard comes after last June the community institutions managed to agree on the text of the directive, which the Member States must adopt within two years after its publication in the Official Gazette of the European Union. However, the directive still needs to be adopted by the European Parliament.
Although progress has been made in recent years towards greater gender equality on boards, the representation of men and women remains uneven. In October last year, only 30.6% of board members and just 8.5% of board chairmen were women.
Another noteworthy aspect is that the differences are considerable between Member States. “Those in which measures have been introduced progress much more quickly than those in which there are no measures”, they defend from the European Council, which also ensures that a greater proportion of women in economic decision-making positions will have “positive effects”, by while recalling that a better gender balance on boards of directors will make it possible to take better advantage of the large number of highly qualified women in Europe – 60% of new university graduates in the EU are women.
