Directive 2022/2381 on improving the gender balance among directors of listed companies and related measures was drafted at the end of 2022, but it has been a long time in the making since November 2012.
At the European level, Directive 2022/2381 is a key piece of legislation as a first step towards ensuring equal opportunities for women and men and gender balance in top management positions.
Member States are required to adopt and publish the laws, regulations and administrative provisions necessary to implement the Directive by 28 December 2024.
We take a look at the key changes businesses can expect to see as a result of the implementation of Directive 2022/2381.
Scope of Directive 2022/2381
The new EU rules will only apply to listed companies, i.e. companies which meet the following two conditions together:
- Have their registered office in a Member State; and
- Their shares are admitted to trading on a regulated market within the meaning of Article 4(1)(21) of Directive 2014/65/EU in one or more Member States.
Micro, small and medium-sized enterprises are excluded.
Objectives of Directive 2022/2381
Member States, including Poland, are required to ensure that listed companies meet either of the following objectives by 30 June 2026:
- Ensure that women hold at least 40 % of non-executive director positions, or
- Ensure that women hold at least 33 % of all director positions, including both executive and non-executive directors.
Listed companies that are not required to meet the 33 % threshold must set individual quantitative objectives to improve the gender balance among executive directors and aim to achieve them by 30 June 2026.
The targets for the number of director positions held by women, as set out in the Annex to Directive 2022/2381, have been made dependent on the total number of director positions in the relevant listed company.
Clear criteria for comparing candidates
Listed companies that do not comply with the objective of Directive 2022/2381 will be required to implement a specific selection process for candidates for director positions.
Under the new rules, a key element of this process will be a comparative assessment of the qualifications of each candidate on the basis of clear, neutral and unambiguous criteria formulated in a non-discriminatory manner.
In addition, where there is a choice between candidates with equivalent qualifications in terms of suitability, competence and professional performance, priority will generally be given to the candidate of the underrepresented sex (i.e. a woman).
Performance reporting and penalties for failure to achieve objectives
Listed companies will be required to report annually on the gender representation on their boards, distinguishing between executive and non-executive directors, and on the measures taken to achieve the equality objectives of Directive 2022/2381
Member States will determine the penalties applicable to infringements of national provisions adopted pursuant to Directive 2022/2381.
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