Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

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.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Bruce Willis Relocated Due to Advanced Dementia
French and Korean Nuclear Majors Clash As EU Launches Foreign Subsidy Probe
EU Stands Firm on Digital Rules as Trump Warns of Retaliation
Getting Ready for the 3rd Time in Its History, Germany Approves Voluntary Military Service for Teenagers
Denmark Confronts U.S. Diplomat Over Covert Trump-Linked Influence in Greenland
Trump Demands RICO Charges Against George Soros and Son for Funding Violent Protests
Taylor Swift Announces Engagement to NFL Star Travis Kelce
France May Need IMF Bailout, Warns Finance Minister
After the Shock of Defeat, Iranians Yearn for Change
Ukraine Finally Allows Young Men Aged Eighteen to Twenty-Two to Leave the Country
The Porn Remains, Privacy Disappears: How Britain Broke the Internet in Ten Days
YouTube Altered Content by Artificial Intelligence – Without Permission
Ukrainian Refugee Iryna Zarutska Fled War To US, Stabbed To Death
Elon Musk Sues Apple and OpenAI Over Alleged App Store Monopoly
German Chancellor Friedrich Merz: “The Current Welfare State Can No Longer Be Financed”
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dutch Foreign Minister Resigns Amid Deadlock Over Israel Sanctions
Trump and Allies Send Messages of Support to Ukraine on Independence Day Amid Ongoing Conflict
China Reels as Telegram Chat Group Shares Hidden-Camera Footage of Women and Children
MotoGP Cameraman Narrowly Avoids Pedro Acosta Crash at Hungarian Grand Prix
Wizz Air passengers screamed as storm-battered flight diverts to Bologna
European postal services halt U.S. deliveries after Trump imposes new tariffs
Urban explorer finds abandoned luxury restaurant left to decay
Fidesz leader labels Péter Magyar a ‘bluffer’ amid escalating political spat
French rope park operator arrested for denying entry to Israeli children
Újpest thrashes Zalaegerszeg 4-1 to secure first win in five matches
Profit-margin cap costs retailers 13 billion forints a month, warns trade group
Curiosity rover finds coral-like rock on Mars hinting at watery past
U.S. green policy rollback drives investors to Europe’s sustainable finance market
Special funerals rise in Hungary: boat, aerial and forest burials gain popularity
Hungary’s Kiskunság region turning into semi-desert after extreme drought
Kopasz Bálint wins world kayak 1000 m title in Milan, making him triple world champion
Budapest’s Keleti railway station to close for four weeks for track overhaul
Balaton could be unfit for swimming by 2035 and dry by 2050, scientists warn
Leaked guidelines show Meta’s AI allowed flirty and racist interactions with children
Filming of ‘Emily in Paris’ halted after assistant director dies on set
Filipino guest workers sue after Hungary moves to deport them for pregnancy
Ukraine Declares De Facto War on Hungary and Slovakia with Terror Drone Strikes on Their Gas Lifeline
A monster hit and a billion-dollar toy empire
Animated K-pop Musical ‘KPop Demon Hunters’ Becomes Netflix’s Most-Watched Original Animated Film
Canada: Nurse Suspended and Fined 93 Thousand Dollars After Stating the World’s Most Well-Known Fact Since the Creation of Adam and Eve, That There Are Only Two Genders
Elon Musk tweeted, “Europe is dying”
Far-Right Activist Convicted of Incitement Changes Gender and Demands: "Send Me to a Women’s Prison" | The Storm in Germany
Hungary Criticizes Ukraine: "Violating Our Sovereignty"
Will this be the first country to return to negative interest rates?
U.S. Treasury Secretary Whitney Bessent Backs Stablecoins to Boost Treasury Demand
Spain to Declare Disaster Zones After Massive Wildfires
Three-Minute Battery Swap Touted as Future of EVs
Beijing Military Parade to Showcase Weapons Advances
×