In November 2022, the European Union (EU) adopted a Directive to improve the gender balance among directors of public companies. The directive aims to achieve gender balance among the directors of companies registered on the stock exchange. By June 2026, every listed company in the European Union must have at least 40% female non-executive directors or have a representation of women as executive and non-executive directors of at least 33%.
The readiness to perform
Two years before the directive comes into force, the organization European Women on Board (EWOB) carried out a study on the readiness of the member states to implement it. Countries that have already started preparations and set optional targets are already seeing results. Some of them already reach and others exceed the percentages set in the directive. There is, however, a discrepancy between these and other countries that have not yet started working towards the implementation of the directive. Among the nine countries that have not yet taken any measures in this direction is Bulgaria. The rest are Croatia, Cyprus, the Czech Republic, Estonia, Hungary, Lithuania, Malta and Slovakia.
Women on the boards
According to current statistics as of May 2023, in Bulgaria, women on boards are 18%. In neighboring Romania they are 22%, and in Greece 26%. Although one might expect to have more women on boards in female-dominated economic sectors, this is not the case. Female directors remain underrepresented in both male-dominated and female-dominated industries.
The role of women on boards also matters. This is reflected in the fact that women are underrepresented in the most influential board roles. While 45% of the 9,701 companies surveyed have female non-executive board members, only 15% are female board chairmen in 917 companies, and 9% are female supervisory board chairpersons, respectively, in 288 companies.
Diversity in boards
Apart from gender, board diversity in Europe remains mostly homogeneous in terms of age and nationality. The study includes 17 EU countries, in which 54% of board members are aged 60 and over. Most of the boards are dominated by local representatives, and a significantly smaller percentage are foreigners. The two extremes are Italy, where 87% of the boards are composed of Italians, and Luxembourg, where 82% are foreigners.
Board diversity without inclusion leads to a waste of resources and talent. Therefore, organizations must focus beyond numerical performance to foster an open environment that encourages diversity of ideas.
