After more than a decade of blockage in the Council of the European Union, the European Commission, the European Parliament and Council of the European Union have agreed to support the so-called “European Women on Boards Directive”, aiming at having 40% of the seats on non-executive boards taken by women, or 33% among all directors.

An important step towards more diversity in the Boardrooms.

Recent research has shown that women take up less than a third of all non-executive board positions within the European Union’s largest companies.

Commission President Ursula von der Leyen, was very clear when saying that, “Diversity is not only a matter of fairness. It also drives growth and innovation.” “The business case for having more women in leadership is clear. After ten years since the European Commission proposed this directive, it is high time we break the glass ceiling. There are plenty of women qualified for top jobs: they should be able to get them,” she said.

What was agreed?

The provisional agreement contains following measures.

The introduction of transparent recruitment procedures in companies, so that at least 40% of non-executive director posts or 33% of all director posts are occupied by the under-represented gender. When adopted, then companies must comply with this target by 30 June 2026 and in cases where candidates are equally qualified for a post, priority should go to the candidate of the under-represented gender.

The proposal includes effective, dissuasive and proportionate penalties for companies that fail to comply with open and transparent appointment procedures.

Examples of specific penalty measures, include fines and companies having their selection of board directors annulled by a judicial body if they breach the national provisions adopted pursuant to the Directive.

Next steps

The directive now awaits final approval by Parliament and the Council of the European Union. Once published, member states will have two years to craft the necessary legislation to support its implementation.