Beautiful Virgin Islands

Wednesday, Jul 23, 2025

EU sets mandatory 40% quota for women on company boards

EU sets mandatory 40% quota for women on company boards

Companies could be fined for failing to appoint enough women as board directors.

The European Union has agreed to impose gender quotas to ensure women have at least 40 per cent of seats on the boards of large companies.

After a decade of deadlock on the topic, the proposal got new momentum this year with fresh backing from Germany and France, and a political agreement was finally reached on Tuesday between the European Parliament and the Council of the EU.

The legislation requires listed companies in all 27 EU member states to have women take up at least 40 per cent of non-executive board seats or 33 per cent of all board director roles by mid-2026.

Companies could be fined for failing to hire enough women on their boards and see director appointments cancelled for non-compliance with the law.

"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," European Commission President Ursula von der Leyen said in a statement. "There are plenty of women qualified for top jobs: they should be able to get them”.

Uneven progress


Last year, EU data showed women occupied 30.6 per cent of boardroom positions across the bloc, but this varied widely country by country, with Cyprus having 8.5 per cent of women on boards, and France more than 45 per cent.

France first introduced legal targets for women on boards back in 2011. Its own 40 per cent quota came into force in 2017 and it’s the only EU state to surpass that number today, according to the European Institute for Gender Equality (EIGE), an EU agency.

Italy, the Netherlands, Sweden, Belgium and Germany were the next best in class, with between 36 and 38.8 per cent of women in the boardroom. Lagging well behind are Hungary, Estonia and Cyprus, where fewer than one in 10 non-executive directors were women.

The EIGE said in April that binding quotas have proven more effective in bringing more women on boards compared to countries that have taken softer measures or no action at all.

What will change?


The so-called “Women on Boards” directive applies to companies with at least 250 employees.

It aims to introduce transparent recruitment procedures in companies, so that at least 40 per cent of non-executive director posts, or 33 per cent of executive and non-executive roles combined, are occupied by the under-represented sex - generally women.

In cases where candidates are equally qualified for a post, priority should go to the candidate of the under-represented sex.

Listed companies will be required to provide information to the competent authorities annually about the gender representation on their boards and, if the objectives have not been met, how they plan to attain them.

“More women on boards make companies more resilient, more innovative and will help to change top-down structures in the workplace,” the directive’s co-rapporteur, Social Democratic Austrian MEP Evelyn Regner, said in a statement.

“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 will face penalties


Member states will need to transpose the directive into their own national legislation over the next two years.

Companies, for their part, will have to comply with the new target by June 30, 2026. This is a tighter deadline than the Council’s proposal of December 31, 2027.

The EU’s proposal includes “effective, dissuasive and proportionate” penalties for companies that fail to comply with selection and reporting obligations. These could include fines and the annulment of contested appointments.

Member States will also have to publish information on companies that are reaching targets as a form of peer pressure and to encourage compliance.

The European Parliament has demanded an assessment of the scope of the directive at a later stage on whether it should also include non-listed companies.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
×