EU: Transposition of the Women on Boards Directive into national law

Introduction 

France and Spain have recently adopted the European Women on Boards Directive (the “WoB Directive”) into their national laws. This move aims to enhance gender balance on the boards of listed companies, marking a significant step towards improved diversity and corporate governance in both countries. In this post, we explore the key elements and implications of these legislative changes.

Under the WoB Directive, EU-listed companies with over 250 employees, an annual turnover exceeding €50 mln, or a balance sheet over €43 mln, must aim for gender balance on boards by achieving one of these targets:

• 40% of non-executive director roles held by the underrepresented gender, or
• 33% of all director positions, including both executive and non-executive roles.

By 30 June 2026, companies not meeting these targets must implement fair, transparent selection procedures for board appointments, focusing on candidates' merits using clear, gender-neutral criteria. Companies failing to meet the directive’s objective must report the reasons and the measures they are taking to address this shortcoming. For more information on the WoB Directive, see our previous blog post. 

France

Ordinance No. 2024-934 of 15 October 2024 (based on French Act No. 2024-364 of 22 April 2024 (the “Act”)) has recently been published in the French Official Journal (the “Ordinance”), thereby transposing the WoB Directive. 

Directors representing shareholders and employees

The Ordinance aligns French law with the WoB Directive, despite France's advanced gender balance laws, such as the 2011 Copé-Zimmermann Act. It introduces a significant change by including employee and shareholder representatives in gender quotas, previously excluded. According to Recital 33 of the WoB Directive, two groups are established for the gender balance rule: directors representing employee shareholders (so-called “administrateurs représentants des salariés actionnaires”) and directors representing employees (so-called “administrateurs représentants des salariés”), each with distinct rules. Boards of listed companies within the scope of the WoB Directive must comply by 30 June 2026, or face enhanced recruitment procedures, as per the French Ministry of Justice.

Monitoring of the gender balance among directors 

The Act also provides for the designation of one or more bodies to monitor, analyse, and support gender balance in board composition.

Article 13 of the Ordinance requires communication to a competent authority (to be designated by a decree) of a detailed description of the diversity policy applied to board members, considering criteria such as age, gender, qualifications, and professional experience. It also requires a description of the objectives, implementation methods, and results achieved over the past year.

Existing French regulation

French law has included gender balance provisions since the 2011 Copé-Zimmermann Act, which requires at least 40% women on the boards of companies with over 250 employees and significant turnover or balance sheet total (at least €50 million). However, the Copé-Zimmermann Act did not consider representatives of employees and shareholders separately. This gap is now addressed by the WoB Directive and the Act. Additionally, the 2021 Rixain Act mandates that by March 2026, companies with over 1,000 employees must have 30% women among both their managing executives roles and the members of their managing bodies, increasing to 40% by March 2030.

Spain

On 1 August 2024, Organic Law 2/2024, on Parity Representation and Balanced Presence of Women and Men was approved (the “Law”), thereby transposing the WoB Directive. This Law already entered into force on 22 August 2024.

The Law amends several laws (including the Capital Companies' Act, the Securities Market and Investment Services Act, and the Spanish Workers' Statute) with the aim of aspiring towards parity representation and balanced presence of women and men in the companies’ representative bodies. 

Scope 

The Law applies to large listed companies or public interest entities with (i) more than 250 employees and (ii) an annual turnover of €50 mln or assets exceeding €43 mln, and to the Public Administration (i.e. the Spanish General State Administration and public or associated dependent bodies). The balance prescribed by the WoB Directive is deemed achieved when the representation of the less represented gender in the Board of Directors is not less than 40%, which demonstrates the special commitment undertaken to combat gender inequality.

Introduction of new serious offence

The Law introduces new serious offences carrying a sanction graded as determined by the CNMV (National Securities Market Commission). These new offences pertain to the non-compliance with the requirements set forth in the Royal Legislative Decree 1/2010, of 2 July, which approves the consolidated text of the Companies Act regarding balanced representation between women and men among the directors of listed and public interest companies. This includes the failure of listed companies to ensure that the board of directors is composed in such a way that guarantees the presence of at least 40% of the less represented gender, or the failure to annually prepare and publish information on their website regarding the representation of the less represented gender in the company's board of directors, among other obligations. 

Sanctions for this kind of offences may consist of: (i) fines of up to the greater of the following amounts: (a) three times the gross profit obtained as a result of the acts or omissions constituting the offence, (b) 2% of the infringing entity's own resources, (c) 2% of the total funds, whether own or third-party, used in the offence, or (d) €300,000; and/or (ii) non-monetary penalties may also be imposed.

Practical impact

The WoB Directive is set to drive practical changes within companies. Businesses will need to adjust their governance structures to comply with gender diversity targets. This may result in increased administrative duties to monitor gender representation and thoroughly document board appointments. Companies could see a transformation in recruitment and promotion strategies, aiming to build a strong pipeline of qualified female candidates to meet these new standards. Internally, organisations may undergo cultural shifts as gender parity becomes a central focus within boardrooms. While these changes are crucial for compliance, they also present an opportunity for businesses to enhance governance and align with broader societal expectations of gender equality.

We can assist your company in ensuring compliance with the WoB Directive and provide guidance on monitoring its national implementation, helping you navigate the evolving regulatory landscape effectively. For other materials on diversity, see our Diversity Faculty at Linklaters.