As women struggle to make up even one-third of corporate boards, Europe mandates 40% reservation for women

After thousands of years, we finally stand in an era where the writhing whispers from the under-represented are finding the amplification they deserve. However, the road to equality is paved thoroughly with thorns, and this struggle will likely prevail for the remainder of at least this century.

In the meantime, however, a win has emerged from one of the world's biggest economies! After ten years of contemplation, the European Union (EU) parliament has decided to adopt the "Women in Boards" Directive. The mandate will seek to improve women's presence within their biggest publicly-listed companies, which could stand to provide a much-needed impetus for other parts of the world.

"The adoption of the 'Women on Boards' Directive ten years after it was proposed is an important step forward for gender equality. We are finally giving women a fair chance to be in top corporate positions and improving corporate governance. Women are innovative, smart, strong and capable of many things," explains Evelyn Regner, Vice-President of the European Parliament.

"We are removing one of the main hurdles for women to get the 'top jobs': informal male networks. From now on, competence will count more in a selection procedure than ever before, as will transparency."
The Women in Boards initiative
The Directive will encompass a variety of measures that will reinforce transparency and accountability in the recruitment process of large companies in the EU. Under this, at least 40% of non-executive director posts, or 33% of all director posts, must be occupied by women by the end of June 2026.

In addition, the listed companies (small and medium-sized enterprises with fewer than 250 employees are exempt) will have to provide tangible roadmaps towards how they plan to attain these new objectives, along with information on current gender representation in the workspace.

To ensure this doesn't end up as corporate wishy-washy in order to appear progressive, the ruling directs member states to put effective penalties in place that will ensure compliance. This can even go as far as annulling the board of directors if they fail to meet the rules set by the Directive.
Corporate male dominance
For generations, men-dominated boardrooms have remained the norm, and proponents of this new ruling advocate that this could finally shake things in the upper echelons of corporate governance. According to EY, less than one-third of board members in the EU's largest companies in 2021 were women — an appalling figure considering that women comprise more than half its population.

This number becomes even more tragic when you include developing countries in the race, considering women only hold about 18% of board seats in India, according to the latest report by EY. In addition, the growth rate of women in executive positions was lower than those in non-executive roles. This is concerning because true power to change integral structuring rests within the corporate upper echelons.

While these figures have seen an upward incline in the past decade, the sheer imbalance of the gender-scale means there is still a ways to go before we can properly achieve the fifth Sustainable Development Goal, which aims to achieve gender equality and empower all women and girls by 2030.

Another factor that severely hindered progress in this area was the COVID-19 pandemic, where the pandemic disproportionately affected women. Domestic violence rates against women skyrocketed, while the state of their economic status and health deteriorated sharply. As we come out of the shadows of the pandemic, the situation can only be counteracted by making gender diversity a major priority for all workspaces.

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