• New bill: Mandatory coverage of at least 33% of director positions in listed companies by women is foreseen.

• European harmonization: The legislation transposes Directive 2022/2381 into national law regarding gender balance on corporate boards.

• Transparent procedures: Strict procedural requirements are established so that the selection of executive executives is based exclusively on meritocratic criteria.

• Economic benefits: Analyses show that increased female representation significantly improves corporate governance and business efficiency.

• Government goal: Strengthening equality in decision-making centers is expected to contribute to creating a more competitive economy.

At least one in three positions across all director positions in listed companies will have to be held by women, based on a bill before Parliament, the discussion and voting of which is expected to begin within the coming September.

The harmonizing bill specifically aims to achieve a more balanced representation of women and men on the boards of directors of listed companies, establishing effective measures to accelerate progress toward gender equality.

The relevant bill, which was approved by the Council of Ministers at the beginning of this year, was submitted by the Ministry of Energy, Commerce and Industry to Parliament and aims to transpose Directive 2022/2381 into national law, which ensures the principle of equal opportunities between men and women and the achievement of balanced gender representation in top director positions.

Specifically, it establishes a set of procedural requirements regarding the selection of candidates for appointment or election to executive positions, based on transparency and meritocratic criteria.

Based on an impact analysis conducted for the implementation of the relevant legislation, companies with better gender representation on their boards have greater efficiency, with statistically significant differences, provided that the level of female representation on boards of directors is sufficiently high to influence behavioral norms during decision-making.

Also, that empowering women to take on leadership roles is of decisive importance for addressing demographic challenges in the EU, for competing successfully in a globalized economy, and for ensuring a comparative advantage over third countries.

The option examined and ultimately pursued will have a significant positive indirect impact on the broader economy regarding the reduction of the gender gap in employment rates and pay, as well as increasing the average return on investment in education.

Furthermore, corporate governance indicators will be significantly better under this option, and company performance would improve noticeably.

What the Directive foresees and what the government says

It is worth noting that Directive (EU) 2022/2381, which concerns the balanced representation of women and men on the boards of directors of listed companies, dictates that either 40% of non-executive director positions or 33% of all director positions be filled by the underrepresented gender.

The relevant bill, which was subsequently submitted to the House of Representatives, provides that members of the underrepresented gender hold at least 33% of all director positions.

In an announcement by the Presidency, it is stated that with this bill, the Government is promoting a modern framework that strengthens the balanced representation of women and men on the boards of directors of listed companies, ensuring the implementation of the principle of gender equality through meritocratic and transparent selection procedures for candidate executive positions.

In this context, representation of the underrepresented gender is set as a goal at a rate of at least 33% of total director positions, while measures are provided that accelerate progress toward substantive gender equality and reinforce the effective implementation of the new legislative framework.

Balanced participation of women and men in decision-making centers strengthens meritocracy, improves corporate governance, and creates the conditions for a more modern and competitive economy.

Source: ink.com