28 November 2022 
New gender regulation in the European Union. This week, the European Parliament formally adopted a new EU law on gender balance on corporate boards. By 2026, listed companies will need to have 40% of the underrepresented sex among non-executive directors or 33% among all directors. Denominator’s data shows that currently, the average of women in leadership positions in the EU is 30% among non-executive directors and 19% among all directors. These numbers indicate that companies need to make large changes in the coming years.
On this occasion, President von der Leyen together with Vice-President Jourová and Commissioner Dalli issued the following statement: “This is a long-awaited moment, a moment to be celebrated as a breakthrough in gender equality. There are plenty of women qualified for top jobs and with our new European law, we will make sure that they have a real chance to get them.”
Recently, the EU also adopted the Corporate Sustainability Reporting Directive (CSRD) extending the requirement for sustainability reporting and increasing the required number of companies from 11,700 to 50,000. All large and/or listed companies in the EU will need to disclose data on the impact of their activities on people and the planet as well as any sustainability risks they are exposed to.
Most of the CSRD reporting requirements are focused on the environmental and climate aspects of sustainability, but also include some DEI related reporting such as the gender pay gap. While more DEI transparency is good, the CSRD is only a small first step with a limited focus on Gender and not the other dimensions of DEI. It is also worth noting that the filing requirements do not enter into force before somewhere between 2024 and 2028, depending on the status and size of the company.
- From 1 January 2024 for large public-interest companies (with over 500 employees) already subject to the non-financial reporting directive, with reports due in 2025;
- From 1 January 2025 for large companies that are not presently subject to the non-financial reporting directive (with more than 250 employees and/or €40 million in turnover and/or €20 million in total assets), with reports due in 2026;
- From 1 January 2026 for listed SMEs and other undertakings, with reports due in 2027. SMEs can opt out until 2028.
Regulation is often years behind market developments and needs, but both of these initiatives can be seen as an indicator of what regulatory activities is to come.
Read more about the two regulations here:
