EU agrees to 40% quota for women on boards

All boards of large publicly-listed companies based in the EU will have to have at least 40% of seats held by women by mid-2026.

In a landmark ruling, the European Union has given the green light to mandatory quotas to see all 27 EU member countries work toward 40% of non-executive board seats be held by women, or 33% of executive and non-executive roles combined, by mid-2026.

The European Commission made its first proposal for a 40% quota on women on boards in 2012, but the plan was blocked by big member states including Germany and the UK. After being blocked in the Council for a decade, EP and EU countries’ negotiators have finally agreed on a bill to increase the presence of women on corporate boards in the EU.

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

“All data show that gender equality at the top of companies is not achieved by sheer luck,” said Lara Wolters, the Dutch socialist MEP, who negotiated the law with EU governments.

“We also know that more diversity in boardrooms contributes to better decision-making and results. This quota can be a push in the right direction for more equality and diversity in companies.”

European Parliament Vice-President Evelyn Regner, from Austria, said after 10 years of stalling, it was “high time” binding measures were rubber-stamped.

“Parliament has been asking for a Directive for more women on boards for over a decade. The Council was finally ready to come to the table 10 years after the Commission made its proposal. It was high time to have binding measures.

“More women on boards make companies more resilient, more innovative and will help to change top-down structures in the workplace. One of the main achievements is transparency. Selection processes have to be based on clear, predetermined criteria and with this agreement, only the best candidates will be selected, thereby improving the overall quality of boards.”

Companies with more than 250 employees that fail to recruit enough women to their non-executive boards could be fined and see board appointments cancelled for non-compliance.

MEPs insisted that merit must remain the key criterion in selection procedures, which should be transparent, as part of the agreement. Companies will be required to provide annual information on their website on the number of women on their boards and if quotas have not been met, how they plan to meet them. 

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