Nearly ten years after the proposal was first tabled, the European Parliament and the European Council have reached a landmark agreement which seeks to increase gender balance on corporate boards of publicly listed companies in the EU.
As part of this new political agreement, a new Directive will be put forward for approval which sets a target for EU companies listed on the EU stock exchange to accelerate progress towards more gender balance on their boards. The main elements of the new Directive are:
- At least 40% of the underrepresented gender must be represented in non-executive boards of listed companies or 33% among all directors;
- Where candidates are equally qualified for a post in companies where the target has not been achieved, priority should go to the candidate of the under-represented sex;
- Clear and transparent board appointment procedures must be introduced with the objective assessment based on merit, irrespective of gender;
- Companies that fail to meet the objectives must report the reasons and any measures they are taking to address the shortcoming; and
- Member states must set effective, proportionate and dissuasive penalties for failure to comply with the reporting obligations.
Further reading:
- The Commission’s press release with more information about the new proposals can be found here.
- This development comes shortly after the UK’s new Listing Rule requirements for listed companies to report on the diversity of their boards and executive management. You can read more about this here.
For further information, please contact:
Laurie Ollivent, Linklaters
laurie.ollivent@linklaters.com
