Directive (EU) 2022/2381 of the European Parliament and of the Council of 23 November 2022 on improving the gender balance among directors of listed companies and related measures (the ‘Directive’) was adopted by the European Parliament on 22 November 2022, published in the Official Journal of the EU on 7 December 2022 and it entered into force on 27 December 2022. Member States have two years from this date to implement the provisions.
Member States may choose between two alternative mandatory quotas with regard to gender balance on boards:
- a quota of at least 40% of the underrepresented gender can be set for the supervisory board of the companies concerned - individual quantitative objectives for improving the gender balance on the board must also be set.
- a Member State can now alternatively choose to pursue a common quota for the supervisory board and the management board of a listed company - the underrepresented gender must hold at least 33% of the positions on both boards.
The Directive emphasizes the particular importance and visibility of listed companies and their impact on the market. According to the Directive, listed companies "set standards for the wider economy" and "their practices can be expected to be followed by other types of companies".
Romania needs to decide which route will choose and it remains to be seen whether listed companies can deliver a strong role model function especially by the supervisory boards of listed companies.
Gender balance for companies listed on Bucharest Stock Exchange (BET index)
Currently Romania has no target quota in the national legislation and from data above there are no clear improvements in gender balance for listed companies during last 3 years.
We can divide the companies listed on the Bucharest Stock Exchange (currently included in the BET index) into 5 categories (some companies are found in more than one category):
- The category ‘no women, wondering why’ with no female representation at the level of the board: Digi Communications N.V., S.N.G.N. ROMGAZ S.A., S.N.T.G.N. TRANSGAZ S.A., SOCIETATEA ENERGETICA ELECTRICA S.A., and Sphera Franchise Group
- The category ‘one and done’ with only one woman in board composition: OMV PETROM S.A., C.N.T.E.E. TRANSELECTRICA, MedLife S.A., AQUILA PART PROD COM, FONDUL PROPRIETATEA, PURCARI WINERIES PUBLIC COMPANY LIMITED, and TERAPLAST SA
- The category ‘regression is the opposite of evolution’ with companies that reduced female representation at the level of the board during last years: S.N.G.N. ROMGAZ S.A., S.N.T.G.N. TRANSGAZ S.A., C.N.T.E.E. TRANSELECTRICA, and SOCIETATEA ENERGETICA ELECTRICA S.A.
- The category ‘work in progress’ with female representation at the level of the board, but below the target mentioned in Directive: BURSA DE VALORI BUCURESTI SA, ALRO S.A., BANCA TRANSILVANIA S.A., ONE UNITED PROPERTIES, and S.N. NUCLEARELECTRICA S.A.
- The category ‘mission achieved’: TTS (TRANSPORT TRADE SERVICES), CONPET SA and BRD - GROUPE SOCIETE GENERALE S.A. (although for 2 of the 3 companies the appointments are temporary)
How have Romanian listed companies received the Directive? Is Bucharest Stock Exchange willing to set a target in its Corporate Governance Code considering that the gender representation at the level of its board is below the Directive’s target?
We will return in few months to see if there are developments on this subject.