Brussels, 8 June 2022 (TDI): The EU breaks the glass ceiling as it agreed to a 40% quota for women on corporate boards. The EU established boardroom equality nearly a decade after the idea was originally presented.
In addition, the EU requires a minimum 33 percent representation of the “underrepresented sex” in all top company posts.
The EU has agreed that corporations will face strict quotas to guarantee that women hold at least 40% of corporate board seats. After a decade of deadlock over the ideas, EU lawmakers welcomed a “landmark” agreement on gender equality.
The EU has also set a 33 percent target for women in all top posts. This includes non-executive directors and directors such as the CEO and COO.
Women held 30.6 percent of boardroom seats in the EU in 2021, varying among the 27 member countries.
According to the European Institute for Gender Equality, France was the only EU country to exceed the 40% women-on-boards quota, with 45.3 percent of boardroom seats taken by women.
Italy, the Netherlands, Sweden, Belgium, and Germany were the next best having between 36% and 38% female representation.
Nonetheless, women made up less than one-tenth of non-executive directors in countries like Hungary, Estonia, and Cyprus.
“All facts demonstrate that gender equality at the top of enterprises is not achieved by chance,” said Lara Wolters. Lara is a Dutch socialist MEP who negotiated the legislation with EU countries.
“We also know that having more diversity in boardrooms leads to better decision-making and outcomes.”
This quota can be a step in the right path toward more equality and diversity in the workplace.”
Is it legally binding?
From June 30, 2026, major enterprises operating in the EU will be required to ensure that 40 percent of non-executive directors should belong to the “underrepresented sex” — mainly women.
National authorities, who are in charge of enforcing the order, have the authority to levy fines. If a firm violates the law, national courts can overturn boardroom appointments.
Companies with less than 250 employees will be exempt from the regulations.
The European Commission first proposed a 40% quota for women on boards in 2012, but could not implement it.
The resistance came from member states such as Germany and the United Kingdom.
In the United Kingdom, the then-coalition Conservative-Liberal Democrat administration opposed mandated quotas, preferring a voluntary approach led by Lord Mervyn Davies.
This enabled the UK to become one of the top performers in Europe, with 39.1 percent of FTSE100 board members being women by 2022, placing the UK second only to France in one international poll.
After important nations changed their positions, the Commission resurrected the draft law in 2020.