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. These rates are insufficient for the Council of the EU and the European Parliament, which have just agreed on new legislation. The aim 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. Or, if member states choose to apply the new rules to both executive and non-executive directors, to 33%.
The EU does not have statistics on the share of women directors in executive positions.
In member states that have not reached these targets in time, listed companies will be required to “put in place transparent corrective procedures for the selection and appointment of board members, such as a comparative assessment of different candidates on the basis of clear and neutrally formulated criteria,” the Council wrote in a press release.
The legislation will include measures aimed at increasing clarity and transparency when it comes to making board appointments. For instance, “where two candidates of different sexes are equally qualified, preference shall be given to the candidate of the underrepresented sex, in companies where the target for gender balance is not achieved.” Companies will also be obliged to disclose their qualification criteria should an unsuccessful candidate request it.
Few companies affected in Luxembourg
This should not be the case in Luxembourg, according to , director of the Luxembourg Institute of Directors (ILA). "The objectives seem to me to be quite achievable. This is because the directive will only affect "listed companies and we have very few of them in Luxembourg" (less than a dozen employing more than 250 people), but also because they have “four years” to comply. This should therefore happen “naturally” once the directive has been transposed at national level.
But the Maltese EU commissioner for equality, Helena Dalli was adamant that quotas are the only way real progress can be made. “Talent has no gender and women's leadership skills and vision matter. Yet, entrenched selection patterns of corporate board members continue to largely overlook women candidates,” she said. “Change in this sector only materialised in countries that set quotas by law or policy.”
For Carine Feipel, this is a “very commendable objective”, but above all a “first step”. It will then have to be seen whether “the quotas are extended to unlisted companies”. While Feipel admits that there are “pros and cons” on the subject, “when we see the rate of progress [of the share of women in boards of directors] is still too slow, perhaps quotas are a solution.”
But over the last ten years progress has been made. In 2011, the share of women in boards was 13.4% among the 27 EU member states and 5.6% in Luxembourg.
The agreement must now be submitted to the committee of permanent representatives of the governments of the EU member states for approval, before going through the formal adoption procedure.