The European Union will force large listed companies to have a minimum quota of women in senior positions under penalty of sanctions, under new rules ratified by the European Parliament on Tuesday. After ten years of delays and various deadlocks, the MEPs, meeting in Strasbourg, have finalized this new directive, which all member states will have to apply within two years.
“Now we have a European law breaking the glass ceiling on the boards of directors of listed companies,” welcomed the European Commission, whose original proposal on the matter dates back to 2012, in a press release.
In particular, large listed companies will have until July 2026 to implement “transparent recruitment procedures” so that “at least 40% of non-executive director positions or 33% of all administrative positions are held by underrepresented gender.” that women most of the time.
Only 30.6% of EU jobs in 2021
If this is not the case, companies “will have to indicate how they intend to achieve this” on their website, the European Parliament explained. If appointment procedures are not “open and transparent”, each Member State will be forced to impose “dissuasive and proportionate sanctions” such as fines. The board of directors could even be dissolved in case of non-compliance with this legislation. This obligation does not apply to small and medium enterprises with fewer than 250 employees.
The number of women on boards of directors currently varies greatly from one member state to another: it reaches 45.3% in France, where the national law has been in force since 2011, and only 8.5% in Cyprus, recalled the European Parliament. Of all the largest EU companies listed on the stock exchange, only 30.6% of board positions were held by women in 2021.
The diversity of country situations partly explains the very laborious result of this new legislation, on which the European Council, representing the EU member states, and the European Parliament only reached a compromise in June. “Quotas are certainly a rudimentary tool, but where there is not enough will, there is a need for law, and this law is an important success,” cheers Dutch MEP Lara Walters (S&D, left), co-rapporteur on the text. “We are removing one of the main barriers preventing (women) from accessing positions of responsibility : informal male networks,” added another speaker, Austrian Evelyn Regner (S&D).