Saudi Press

Saudi Arabia and the world
Saturday, Jun 21, 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

Saudi Press
0:00
0:00
Close
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
Vietnam Emerges as Luxury Yacht Destination for Ultra‑Rich
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
Trump's Anti-War Stance Tested Amid Israel-Iran Conflict
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
Israel Issues Ultimatum to Iran Over Potential Retaliation and Nuclear Facilities
Black Box Recovered from Air India Crash Site
Coinbase CEO Warns Bitcoin Could Supplant US Dollar Amid Mounting National Debt
Trump to Iran: Make a Deal — Sign or Die
Operation "Like a Lion": Israel Strikes Iran in Unprecedented Offensive
Israel Launches 'Operation Rising Lion' Targeting Iranian Nuclear and Military Sites
Israeli Forces Intercept Gaza-Bound Aid Vessel Carrying Greta Thunberg
IMF Warns of Severe Global Trade War Impacts on Emerging Markets
Syria to Reconnect to Global Economy After 14 Years of Isolation
Israel Confirms Arming Gaza Clan to Counter Hamas Influence
Global News Roundup: From Ukraine's strategic military strikes and Russia's demands and Tensions Escalate in Ukraine, to serious legal issues faced by Britons in Bali and Trump's media criticism, the latest developments highlight a turbulent landscape
U.S. Reduces Military Presence in Syria
Trump Demands Iran End All Uranium Enrichment in Nuclear Talks
Iran Warns Europe Against Politicizing UN Nuclear Report
Paris Saint-Germain's Greatest Triumph Is Football’s Lowest Point
OPEC+ Agrees to Increase Oil Output for Third Consecutive Month
Turkey Detains Istanbul Officials Amid Anti-Corruption Crackdown
Meta and Anduril Collaborate on AI-Driven Military Augmented Reality Systems
EU Central Bank Pushes to Replace US Dollar with Euro as World’s Main Currency
European and Arab Ministers Convene in Madrid to Address Gaza Conflict
U.S. Health Secretary Ends Select COVID-19 Vaccine Recommendations
Trump Warns Putin Is 'Playing with Fire' Amid Escalating Ukraine Conflict
India and Pakistan Engage Trump-Linked Lobbyists to Influence U.S. Policy
U.S. Halts New Student Visa Interviews Amid Enhanced Security Measures
Trump Administration Cancels $100 Million in Federal Contracts with Harvard
SpaceX Starship Test Flight Ends in Failure, Mars Mission Timeline Uncertain
King Charles Affirms Canadian Sovereignty Amid U.S. Statehood Pressure
×