Directive on improving the gender balance among directors of listed companies

The Directive is aimed at achieving a gender-balanced representation among top management positions in listed companies. Effective measures to improve the composition of company bodies are expected to achieve that gender balance.

The directive applies to listed companies defined as companies established in a Member State which are listed on a regulated market in at least one Member State. The directive does not apply to micro, small, and medium-sized enterprises (SMEs).

National laws will require listed companies to achieve one of the following goals by 30 June 2026:

An executive director means a member of a board who which carries out the management functions of a listed company (board member). A non-executive director means a member of the board which carries out the supervisory functions – those of a supervisory board. The Directive is expected to cover all systems of company bodies in Member States, both dual board systems (with separate management and supervisory functions) and unitary boards in which a single board carries out both functions. 

Listed companies which do not meet the above-mentioned requirements will be obliged to select the best qualified candidates for director positions on the basis of a comparative assessment of the qualifications of each of them. They will then have to set establish clear, neutrally formulated, unambiguous and non-discriminatory criteria in advance of the selection process, and apply them throughout the selection process, including:

Importantly, the above objectives concern the overall gender balance among directors and, pursuant to recital 35 of the Directive, should not interfere with the concrete choice of individual directors. Consequently, the decision on the appropriate directors remains with the listed companies and the shareholders.

Member States will require listed companies to provide information to the competent authorities, once a year, about the gender representation on their boards, distinguishing between executive and non-executive directors and regarding the measures taken to achieve the applicable objectives laid down in the Directive. Member States will require listed companies to publish such information in an appropriate and easily accessible manner on their websites. On the basis of the information provided, Member States will publish and regularly update, in an easily accessible and centralised manner, a list of the listed companies that have achieved either of the objectives laid down in the Directive.

Where a listed company has not achieved the objectives, the information should include the reasons for failure and a comprehensive description of the measures which the listed company has already taken or intends to take in order to achieve them.

For non-compliance with the requirements of the Directive, Member States will lay down rules on penalties applicable to infringements by listed companies of the national provisions and will take all necessary measures to ensure that they are implemented. In particular, Member States will ensure that adequate administrative or judicial procedures are available to enable the obligations deriving from the Directive to be enforced. The penalties must be effective, proportionate and dissuasive. Such penalties may comprise fines or the possibility for a judicial body to annul a decision concerning the selection of directors made contrary to the national provisions adopted pursuant to the Directive or to declare it null and void. Member States should, by 28 December 2024, notify the Commission of those rules and measures and should notify it, without delay, of any subsequent amendment affecting them.

Importantly, listed companies may be held liable only for acts or omissions which can be attributed to them in accordance with national law.

Member States may introduce or maintain provisions which are more favourable than those laid down in the Directive to ensure a more balanced representation of women and men in respect of listed companies incorporated in their national territory. They also designate one or more bodies for the promotion, analysis, monitoring and support of gender balance on company boards. Furthermore, they adopt and publish, by 28 December 2024, the laws, regulations and administrative provisions necessary to comply with this Directive, and immediately inform the Commission about it.

By 29 December 2025, and subsequently every two years, Member States should communicate to the Commission a report on the implementation of the Directive. Such a report should include comprehensive information about the measures taken with a view to achieving the objectives laid down in the Directive.

Starting from 29 December 2026, and every two years thereafter, the Commission will issue a specific report ascertaining, among other things, whether and how the conditions laid down the Directive are fulfilled.

By 31 December 2030 for the first time, and every two years thereafter, the Commission will review the application of the Directive and report to the European Parliament and to the Council. The Commission will evaluate in particular whether the objectives of this Directive have been achieved.

In its report, the Commission will assess whether, in the light of developments in the representation of women and men on boards at different levels of decision-making throughout the economy and taking into account whether the progress made is sufficiently sustainable, the Directive is an efficient and effective instrument for increasing the gender balance on boards. On the basis of that assessment, the Commission will consider whether there is a need to extend the duration of the Directive beyond 31 December 2038 or whether there is a need to amend it, for instance:

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