The European Union is stepping up its efforts to promote gender balance in all areas of life, including by tackling inequality in corporate leadership.
(Michalina Szpyrka | Euractiv.pl)
The EU takes a stand for gender equality in corporate boards
The EU is making a big move to boost gender equality in the business world. The Directive on Gender Balance in Corporate Boards, which kicked in at the end of last year, aims to get more women and men into leadership roles. This major law is the result of 10 years of back and forth, finally getting the green light in 2022.
The directive has ambitious goals: listed companies need to make sure at least 40% of non-executive board members and 33% of all board members are from the underrepresented gender. Companies have until June 30, 2026 to hit these targets.
The percentage of women on corporate boards in EU-listed companies has risen to 34%, according to the European Commission. This improvement is notable, but the Commission also notes that the level of change is not consistent across all EU countries.
- Women constitute almost 40% of board members in countries that have implemented mandatory gender quotas.
- In countries relying on voluntary commitments, the figure is lower, at 33.8%.
- In countries that have taken no action, the situation is strikingly different—women hold only 17% of board seats.
While the majority of EU member states have seen an increase in female leadership since 2010, progress has been uneven. Some countries have shown little to no improvement, which emphasizes the need for a consistent EU-wide policy that addresses the specific challenges of individual job markets.
Transparency in the Selection Process
A big part of the directive is making sure the selection process for board positions is fair and square. Companies have to use clear criteria that don’t favor any gender when they’re picking board members. And if two candidates are equally qualified, the job should go to the person from the underrepresented gender.
Plus, if someone doesn’t get the job, they can ask for info about how the decision was made. This keeps things open and honest, and makes discrimination less likely. Listed companies will also have to report on who’s on their board, any problems they have hitting the directive’s targets, and what they’re doing to get a better gender balance.
To enforce compliance, EU countries must implement effective, proportionate, and deterrent penalties, including fines or even annulment of board appointments that fail to meet the transparency requirements.
The role of member states and the European Commission
EU countries have a big job to do: they need to make the directive law in their own countries and make sure everyone follows it. They also need to keep a public list of companies that are hitting the targets and create groups to keep an eye on how things are going.
Meanwhile, the European Commission is playing supervisor – they’ll be checking that countries are doing what they’re supposed to and can step in if they’re not. To make things easier, the Commission has been running workshops and giving advice to countries to help them get up to speed with the new rules.
Why gender balance matters – the bigger picture
This directive is one of the many ways the EU is working to make things more equal for everyone. A 2024 Eurobarometer survey showed that:
- Over half of EU citizens (55%) are behind measures that boost women’s involvement in decision-making.
- Three out of four EU citizens see gender equality as something that’s good for everyone, not just women.
Gender balance in corporate leadership isn’t just about fairness – it’s also good for business. Research shows that countries with laws to boost gender diversity in the boardroom do a lot better than those that only rely on companies doing it voluntarily. Diverse boards mean better decisions, more innovation, and stronger financial performance.
Looking ahead – a more inclusive future
The Gender Balance Directive is a major part of the EU’s Gender Equality Strategy (2020-2025). To keep things moving, the European Commission is planning to introduce a new action plan for women’s rights this year. This plan aims to further boost women’s roles at work and in leadership positions.
These policies aren’t just about giving women a leg up; they’re about opening doors for businesses and creating a society that’s more inclusive and innovative. By supporting diversity at the top, companies can drive positive change and achieve long-term success.
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