The directive took ten years to be adopted by the European parliament, having been presented by the EU Commission in November 2012. Despite 60% of the EU’s university graduates being female, in the EU’s largest companies less than a third make it to the board.
The aim of the directive is to increase the proportion of non-executive directorships held by women to at least 40% by 2026 in listed companies with more than 250 employees. With this new law, companies that can’t reach the 40% target will have to set up transparent, gender-neutral and merit-based appointment criteria. If two candidates are equally qualified, the underrepresented gender must be given priority. Failure to meet objectives or disclose the criteria used to select of disqualify a candidate could lead to fines or the cancellation of the chosen director’s appointment.
“There are plenty of women qualified for top jobs and with our new European law, we will make sure that they have a real chance to get them,” said Commission president Ursula von der Leyen in a statement.
In 2021 there were 30.6% of women on the boards of listed companies in non-executive positions in the European Union, and just 22.4% in Luxembourg. In October 2022, this amounted to 21.7%. France (45.6%), Italy (42.6%) and the Netherlands (41.5%) have the highest proportion of female board members and CEOs, said the European Commission in a statement.
The directive should however not have a major impact on Luxembourg’s companies, as it affects listed companies, of which there are less than a dozen employing more than 250 people in the grand duchy.
The directive is meant to be temporary--expiring on 31 December 2038--and will enter into force 20 days after being published in the Official Journal. EU member states will then have two years--or until 30 June 2026--to adopt it into local legislation.