EU set to enforce boardroom gender equality

By / China Daily / Updated: 15:57,09-June-2022

European Commission President Ursula von der Leyen attends a news conference, during her visit to Poland in Warsaw, on June 2, 2022. [Photo/Agencies]

After 10-year evolution, new law will fine companies that fail to hit targets

Large companies in the European Union could be fined and face having board appointments canceled for failing to include sufficient numbers of women in their boardrooms, under new rules to be introduced in June 2026.

Companies with more than 250 employees will be legally obliged to have 40 percent of what was described as the "underrepresented sex" among their non-executive directors, with a 33 percent target in all senior roles.

"This is a great day for women in Europe," tweeted European Commission President Ursula von der Leyen. "It's also a great day for companies. Because more diversity means more growth, more innovation."

The new rules specify that companies that do not currently meet the target must, when faced with two equally qualified candidates of different sexes, prioritize the one that is under-represented.

A failure to meet targets must be reported and explained, with steps taken to remedy the situation.

Appointments must be "clear and transparent", with decisions on applicants made objectively and based on their individual merits.

The announcement of the new legally binding targets ends a 10-year debate over the issue, and was welcomed by von der Leyen, who said "After 10 years, since the European Commission proposed this directive, it is high time we break the glass ceiling. There are plenty of women qualified for top jobs: they should be able to get them."

The 40 percent proposal was first put forward in 2012, but was opposed by several bigger countries, including then-member state the United Kingdom, which instead backed voluntary measures, and has since gone on to become one of the most equally represented countries in Europe, with 39.1 percent of women sitting on boards of the country's biggest companies in 2022.

In 2021, across the whole of the 27-member bloc, women occupied 30.6 percent of boardroom positions, but the figures differed wildly from country to country, and 18 EU member states currently have no legislation around the issue in place at all.

According to the European Institute for Gender Equality, France leads the way with 45.3 percent, ahead of Italy, the Netherlands, Sweden, Belgium and Germany, all of which recorded between 36 percent and 38 percent female boardroom representation.

In Hungary, Estonia and Cyprus, however, female representation is less than 10 percent.

"It seems we've finally been able to kiss the Sleeping Beauty awake," Lara Wolters, a Dutch socialist member of the European Parliament, and one of the lead negotiators in the deal, told the Reuters news agency. "This is one foot in the door. And then, we go from there."



Having questions about living or working in Hainan? Leave it below. 

Our Privacy Statement & Cookie Policy

By continuing to browser our site and use the services you agree to our use of cookies, Privacy Policy and Terms of Use. You can change your cookie settings through your browser.

I agree