On 22 November 2022 the European Parliament approved the EU rules to promote more balanced gender representation on the boards of listed companies (‘Gender Balance Directive’). The directive, which will have to be transposed into national law, lays down that at least 40% of non-executive director positions in listed companies should be held by members of the underrepresented sex by 2026. If member states choose to apply the new rules to both executive and non-executive directors, the target would be 33% of all director positions by 2026. The core of the directive stipulates that listed companies which do not achieve the objectives will need to adjust their selection process.
They will have to put in place fair and transparent selection and appointment procedures, based on a comparative assessment of the different candidates on the basis of clear and neutrally formulated criteria. When companies have to choose between equally qualified candidates, they should give priority to the candidate of the underrepresented sex.
The Directive will enter into force 20 days after it has been published in the EU’s Official Journal. Member states will need to implement the rules within two years (probably by end of 2024).
In April 2022 UK Financial Conduct Authority issued Diversity and inclusion on company boards and executive management Policy Statement 22/3 changing the Listing Rules to set requirements for certain listed companies on London Stock Exchange to disclose in their annual financial reports on a ‘comply or explain’ basis against targets that at least 40% of the board are women and at least one of the senior board positions (Chair, Chief Executive Officer (CEO), Senior Independent Director (SID) or Chief Financial Officer (CFO)) is a woman.
Was this Directive needed for Romanian listed companies? Let’s have a look to the current situation for companies from BET index listed on Bucharest Stock Exchange (some of them with dual listing on London Stock Exchange as well).
Company | Gender balance as of 30 November 2022 | Our comments |
27.27% | The Board has a refreshed composition due to the resignation of three members of the Board announced on 7 March 2022. | |
20% | On 23 February 2022 the shareholders of the Company decided to extend the Board from 3 to 5 members. | |
28.57% | The Board of the Company was refreshed in April 2022. | |
37.50% | One female member of the Board resigned from the Board during 2022 for accepting another role in BRD - SocGen and currently there is a vacant position. | |
22.22% | During 2022 there were no changes at the level of the Board. | |
14.28% | The Company has only interim members. The Company needs to implement a clear succession planning, as a strategic document that outlines the process that boards and committees must follow when replacing board members and board leadership. The succession planning needs to consider the skill matrix for the candidates, gender balance and the independence criteria. | |
28.57% | The Company has only interim members. The Company needs to implement a clear succession planning, as a strategic document that outlines the process that boards and committees must follow when replacing board members and board leadership. The succession planning needs to consider the skill matrix for the candidates, gender balance and the independence criteria. | |
0% | During 2022 there were no changes at the level of the Board. | |
20% | During 2022 there was one change at the level of the Board, but no gender balance changes in percentage. | |
14.28% | During 2022 there were no changes at the level of the Board. | |
0% | There is one vacant position that has an interim member appointed. The appointment for the vacant position will take place in April 2023. | |
28.57% | During 2022 the composition of the Board has changed. | |
20% | During 2022 there were no changes at the level of the Board. | |
28.57% | There are 4 interim members of the Board out of 7 roles. The Company needs to implement a clear succession planning, as a strategic document that outlines the process that boards and committees must follow when replacing board members and board leadership. The succession planning needs to consider the skill matrix for the candidates, gender balance and the independence criteria. | |
0% | The Company needs to implement a clear succession planning, as a strategic document that outlines the process that boards and committees must follow when replacing board members and board leadership. The succession planning needs to consider the skill matrix for the candidates, gender balance and the independence criteria. | |
0% | The Company needs to implement a clear succession planning, as a strategic document that outlines the process that boards and committees must follow when replacing board members and board leadership. The succession planning needs to consider the skill matrix for the candidates, gender balance and the independence criteria. | |
0% | The Board has not suffered any change during 2022. The Company is managed by the Board of Directors whose members are appointed for a mandate of 4 years. The current members were appointed on 25 April 2019 and a succession planning should be put in place for April 2023 general meeting. | |
20% | The Board has not suffered any change during 2022. | |
40% | TTS is the only company that meets the conditions introduced in Gender Balance Directive. | |
0% | The Company needs to implement a clear succession planning, as a strategic document that outlines the process that boards and committees must follow when replacing board members and board leadership. The succession planning needs to consider the skill matrix for the candidates, gender balance and the independence criteria. |
Will we soon have politicians who will declare a different gender to 'catch' a position on the board of a listed Romanian company?