EU labor and employment ministers on Monday approved a plan to set new requirements for gender balance on the corporate boards of publicly-listed companies, unblocking legislation that had been stalled for a decade in a bid to put more women in positions of corporate power.
Under the rules proposed by the European Commission and approved Monday by the Council of the EU, listed companies that have a registered office in an EU country would be required to aim to have 40 percent of their non-executive director positions held by women by 2027. That target would be 33 percent for companies that include both executive and non-executive positions.
Companies that fail to meet the targets by 2027 would be required to put in place new direct selection systems to achieve the required gender balance. In putting forward the new rules, the Council said that “women are still vastly outnumbered by men in the highest decision-making bodies of companies throughout the EU. This gender imbalance is particularly significant and acute in the private sector, especially in listed companies.”
The new rules, which must now be negotiated with the European Parliament, would be enforced in the country where a company is located, regardless of which stock exchange its shares trade on.
“We want to break the glass ceiling preventing talented women from acceding to boards,” European Commission President Ursula von der Leyen tweeted Monday. “And we know that legislation works.”
Élisabeth Borne, the French minister of labor, employment and integration who chaired Monday’s Council meeting, expressed satisfaction that the legislation was moving forward. “We welcome this very important step for equality,” she told a news conference. “This text was in deadlock for several years and thanks to today’s general approach, we can now begin our trilogues with the European Parliament.”
The legislation had stalled for years over member countries’ reluctance to hand Brussels power over employment issues that are seen as domestic competencies.
As of October 2021, women accounted for 30.6 percent of board seats in the largest publicly-listed companies in the EU, according to Council figures.
In celebrating the ministers’ action on Monday, von der Leyen referenced Simone Veil, who was the first president of the directly-elected European Parliament, serving from 1979 to 1982. In that role, Veil had the opportunity to welcome U.K. Prime Minister Margaret Thatcher in 1981 as the first president of the European Council to address the Parliament on the outcome of a European Council summit.
Von der Leyen in 2019 became the first woman named as Commission president, the EU’s top executive post. “I now look forward to the swift adoption of our proposal,” von der Leyen tweeted Monday. “So the dreams of women like Simone Veil can finally come true.”