European Union agrees for 40% women quotas on corporate boards to enhance gender equality

Negotiators in the European Union agreed late on Tuesday (June 7) for the bloc’s first ever women quota in corporate boards, aiming to enhance gender equality in the 450 million strong bloc, the lawmakers said, reported by Reuters.

The rule requires all listed firms in 27 European Union member nations to have at least 40 per cent of women in non-executive seats, 33 per cent in executive and non-executive jobs by mid of 2026.

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The proposal had been dormant for a decade, but it regained steam this year with new backing from France and Germany.

However, there is no penalty for missing the target, companies that do meet it will be praised by the public. After the final round of the negotiators and EU member states, the parliament’s liberal Renew faction stated that this would raise pressure to comply.

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Gender representation for corporate board varies widely from nation to nation, with women holding only 9 per cent non-executive seats in Estonia and over 45 per cent in France. The latter has set its own target of 40 per cent and is the only nation to achieve it, reported by Reuters.

As per the European Institute for Gender Equality (EIGE), a European Union agency, that stated that these enforceable quotas have been proven to be more effective in improving the board balance that nations that enacted weaker measures or none at all.

As per the report, France, Germany and Italy set national goals in the year 2010, the female representation on boards in the EU increased. However, the progress has recently declined, with women accounting for less than a third of the non-executive board members in the union’s trading companies.

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(With inputs from agencies)