European Commission President Ursula von der Leyen addresses the closing press conference of an European Union summit on Ukraine, defense and energy, in Brussels on May 31, 2022. (KENZO TRIBOUILLARD / AFP)
Large companies in the European Union could be fined and face having board appointments canceled for failing to include sufficient numbers of women in their boardrooms, under new rules to be introduced in June 2026.
Companies with more than 250 employees will be legally obliged to have 40 percent of what was described as the "underrepresented sex" among their nonexecutive directors, with a 33 percent target in all senior roles.
"This is a great day for women in Europe," tweeted European Commission President Ursula von der Leyen. "It's also a great day for companies. Because more diversity means more growth, more innovation."
The new rules specify that companies that do not currently meet the target must, when faced with two equally qualified candidates of different sexes, prioritize the one that is underrepresented.
A failure to meet targets must be reported and explained, with steps taken to remedy the situation.
Appointments must be "clear and transparent", with decisions on applicants made objectively and based on their individual merits.
The announcement of the new legally binding targets ends a 10-year debate over the issue, and was welcomed by von der Leyen. "After 10 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.
History revisited
The 40 percent proposal was first put forward in 2012, but was opposed by several bigger countries, including then member state the United Kingdom, which instead backed voluntary measures and has since gone on to become one of the most equally represented countries in Europe, with 39.1 percent of women sitting on boards of the country's biggest companies in 2022.
Last year, women across the entire 27-member bloc occupied 30.6 percent of boardroom positions, but the figures differed wildly from country to country, with 18 EU member states currently having no legislation around the issue in place at all.
According to the European Institute for Gender Equality, France leads the way with 45.3 percent, ahead of Italy, the Netherlands, Sweden, Belgium and Germany, all of which recorded between 36 and 38 percent of female boardroom representation.
