EU obliges large listed companies to appoint more women on corporate boards

  • 2022-11-22
  • LETA/TBT Staff

RIGA - Bu July 2026 all large listed companies in the European Union (EU) will have to take measures to increase women's presence on corporate boards, European Parliament spokesman in Latvia Janis Krastins informed LETA.

He said that on Tuesday, the EU Parliament adopted the so-called Women on Board directive, which was first proposed a decade ago. 

The new EU directive aims to introduce transparent recruitment procedures in companies, so that at least 40 percent of non-executive director posts or 33 percent of all director posts are occupied by the under-represented sex by the end of June 2026.

Merit must remain the key criterion in selection procedures, which should be transparent, according to the new rules. Listed companies will have to provide information about the gender representation on their boards to the competent authorities once a year and, if the objectives have not been met, how they plan to attain them. This information will be published on the company’s website in an easily accessible manner.

Small and medium-sized enterprises (SMEs) with fewer than 250 employees are excluded from the scope of the directive.

Member states need to put in place rules on effective, dissuasive and proportionate penalties, such as fines, for companies that fail to comply with open and transparent appointment procedures. A judicial body could also annul the board of directors selected by the company if it breaches the principles of the directive.

Now that the EU Parliament and Council have formally approved the agreement, the directive will enter into force 20 days after it has been published in the EU’s Official Journal. Member states will need to implement the rules within two years.

The European Commission first presented its proposal in 2012 and the European Parliament adopted its negotiating position back in 2013. The file was blocked in the Council for almost a decade, until EU employment and social affairs ministers finally agreed on a position in March 2022. Parliament and Council negotiators struck a deal in June.

In 2021, only 30.6 percent of board members in the EU’s largest publicly listed companies were women, with significant differences among member states (from 45.3 percent in France to 8.5 percent in Cyprus).

In Latvia, the situation is below the EU average, with women making up 22.2 percent of board members. Although the presence of women on corporate boards tends to grow, in 2022 fewer than one in 10 of the largest listed companies in EU countries have a woman chair or CEO.