More Women in Leadership Positions: What the EU Directive Requires Starting June 30

The EU Directive on a more balanced gender representation on boards of directors—known as the «Women on Boards» Directive—will take effect on June 30, 2026. It introduces binding requirements to improve the representation of women and men in corporate leadership. A recent study by the European HR and payroll provider SD Worx, based on surveys of 5,936 HR managers and 16,500 employees in sixteen European countries, shows: 42 percent of European organizations acknowledge an imbalance between women and men in leadership positions.

What the directive specifically requires

The «Women on Boards» directive aims to address the structural underrepresentation of women in top decision-making positions. It applies to publicly listed companies in the EU with more than 250 employees and either annual revenue exceeding 50 million euros or total assets exceeding 43 million euros.

By June 30, 2026, affected organizations must ensure that at least 40 percent of non-executive supervisory board members or 33 percent of all members of management bodies are of the underrepresented gender. EU member states were required to transpose the directive into national law by December 28, 2024. Its practical implementation now begins.

European companies have a lot of catching up to do

Data from SD Worx highlights the need for action: among companies with 250 to 2,499 employees, as many as 46 percent acknowledge an imbalance in leadership positions. The directive has an impact that goes beyond mere numerical targets: It has a direct impact on nomination, recruitment, and governance processes. Companies must apply transparent, gender-neutral selection criteria and give preference to the underrepresented gender when candidates have equal qualifications. They must also report on the composition of their governing bodies and the progress made.

«While the directive sets clear goals for the composition of governing bodies, our study points to a broader challenge regarding career development and access to leadership positions,» says Bruce Fecheyr-Lippens, CHRO at SD Worx. «Today, nearly three in ten employees (29 percent) say they see no opportunities for advancement or change within their organization. Among women, this figure rises to 32 percent. At the top, the gap becomes even more pronounced: Nearly one in five women (19 percent) sees no path to senior management or board positions, compared to 11 percent of men. This suggests that equal opportunity is not yet fully embedded in everyday life and career paths in many organizations.»

The Directive as an Opportunity to Strengthen the Talent Pipeline

Employers should view the directive not merely as a means to an end, but as an opportunity to build a stronger and more transparent talent pipeline. As a first step, SD Worx recommends analyzing the current gender distribution in governing bodies and management teams. Next, succession planning should be reviewed to ensure that promotion and recruitment processes are clear, consistent, and gender-neutral. Organizations should also assess whether they fall within the scope of the directive and whether the current composition of their governing bodies meets the new requirements. Member states are required to establish effective sanctions for non-compliance.

By implementing these measures, companies are not only preparing to comply with regulations but also strengthening their ability to attract and retain talent in a highly competitive job market.

Source: www.sdworx.com