Governance Briefing — November 22, 2022

Executive briefing: On 22 November 2022 the Council of the European Union formally adopted Directive (EU) 2022/2381 on improving the gender balance among directors of listed companies. The directive requires member states to implement measures ensuring that, by 30 June 2026, at least 40% of non-executive directors or 33% of all directors of large listed companies are members of the underrepresented sex, backed by transparent selection procedures and penalties for non-compliance.

Key requirements

Binding targets. Member states must transpose either the 40% non-executive or 33% overall board target for listed companies with 250+ employees.
Transparent recruitment. Companies must establish clear, gender-neutral selection criteria, record evaluations, and provide feedback to unsuccessful candidates.
Enforcement measures. National laws must include penalties such as fines or annulment of board appointments for companies failing to meet targets or follow procedures.

Implications for boards

EU-listed companies. Boards need structured succession plans to meet targets ahead of the 2026 deadline.
Public sector issuers. State-controlled listed entities must coordinate with ownership ministries to align recruitment with directive requirements.
Investors. Stewardship teams should integrate compliance assessments into voting policies and engagement programmes.

Action checklist

Map current board composition against directive thresholds and forecast turnover scenarios.
Update nomination policies with gender-neutral assessment matrices and documentation procedures.
Coordinate with legal teams to monitor national transposition timelines and penalties.

Sources

Zeph Tech assists EU-listed companies with board succession modelling, reporting, and governance policy updates aligned to Directive 2022/2381.