EU agrees to set gender quotas on corporate boards

The European Union has reached a "provisional" deal to impose gender quotas on firms listed in the bloc to boost the participation of women on corporate boards.

The agreement was reached between the Council of the EU and the European Parliament on Tuesday.

By mid-2026, companies will be required to have at least 40 percent of non-executive board members or 33 percent of all board members be taken up by the underrepresented sex.

When two candidates of different sexes are equally qualified, companies must choose the underrepresented candidate.

Companies that fail to meet the quotas will be required to report the reasons and measures to achieve them. Penalties could be imposed if they fail to comply with reporting obligations.

The legislation is expected to be enacted after the approval by the Council and others. European Commission President Ursula von der Leyen said in a statement, "Diversity is not only a matter of fairness. It also drives growth and innovation."

The EU has set gender equality as its goal, including the correction of wage gaps between men and women.

The percentage of women who hold boardroom positions at companies in the bloc varies from 45.3 percent in France to 8.5 percent in Cyprus.