From 30 June 2026 listed companies in all 27 EU member states will need to have at least 40% of non-executive director posts or 33% of all director posts occupied by women. In cases where a male and female candidate are equally qualified for a role, priority will be given to the underrepresented sex. The aim of this is to make sure that quotas are being met and that qualifications between both sexes are equally considered. By Francesca Anoja, International HR Director at BIP
The Women on Boards Directive will introduce fines for failing to recruit enough women into high level positions, holding businesses accountable for their role in creating a gender-equal Europe. There are mixed sentiments around the value of such quotas and whether or not they can really make a significant difference to gender equality.
On the positive side, Norway’s example in 2005 proves that quotas can be successful in implementing change. Once the nation changed its legislation to implement a quota, women directors went from 5% to 40% in just seven years.
In the UK, there have also been significant improvements towards gender equality in the workplace, even though the country does not have a mandatory quota for women on boards. The proportion of women on FTSE 100 boards has more than tripled in the past 12 years; from 12.5% in 2010 to 39.1% in 2022 according to the latest FTSE Women Leaders report. It does however have a government-appointed independent body, the Hampton-Alexander Review, which recommends a target of 40% of women on boards. The Financial Conduct Authority earlier this year also set a target for women to hold at least 40% of seats on boards of listed companies.
However, by introducing these measures there is no guarantee that there will be an improvement in gender diversity and equality if companies simply look to fill a quota and don’t take real action to support equality. In addition, there are various other barriers in play which continue to prevent women and those in underrepresented groups from having equal opportunities in the workplace.
Challenges beyond the board
A diverse workforce is a successful workforce. Diversity can drive innovation and growth as a company stands to benefit from different views. There is evidence to suggest that lack of diversity in firms can in fact weaken the quality of decision making while having diversity in leadership can increase profits. Companies should focus on thoughtful recruitment processes by exploring outside of their typical scope, and that takes training, new ways of thinking and challenging bias.
Simply putting in place a quota is not the only way we can encourage more diversity in firms, and arguably it’s not enough. To ensure that women are exposed to equal opportunities, companies should also look to retain and nurture existing talent by creating mentorship and training programmes, making sure that every employee can access the same training and enjoy the same career progression.
The great resignation has highlighted the shift in employee expectations with many now looking to work in companies which match their values. It’s never been more important for companies to examine their working practices and provide a place where anyone can thrive regardless of background or gender.
Culture plays a big role in improving diversity within businesses – women and men need to be treated equally beyond just recruitment and retention.
Research by King’s College found that women in leadership positions continue to face everyday sexism and inequality in the workplace, including ‘‘micro-aggressions’’ and ‘‘incivility’’. These behaviors can have a significant impact on their career.
Women should also not be penalised for having children or needing flexible working arrangements to manage external priorities. Offering work styles that support working parents will ensure that they don’t have to give up work or let their careers take a back seat to support their family obligations.
While quotas could increase board representation for women and provide role models for all levels, companies also need to address diversity beyond gender. According to the Parker Review, just six FTSE 100 CEOs are from a minority ethnic background, and 16 at companies on the FTSE 250. As well as encouraging and supporting more women into senior positions, employers must also do more to attract and develop employees from all socio-economic backgrounds. Doing so is critical to building a truly representative employee network and to promoting diversity of thought.
Accepting diversity is much more than a gender quota, it includes examining how employees are recruited, access to training given, workplace culture and support given such as parental leave. It also includes acknowledging and learning about bias regarding, race, education and social environment. As a woman, I have to challenge my biases daily, pay attention towards any preconceptions I may have, including the one towards men. Finally, as leader I have to do all I can to push towards equality, with the hope that in the long term a more diverse and gender-equal workplace will be the norm. While this is a good first step, we all have a duty to push towards a workplace where everyone can succeed.