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Gender Balance in the Boards of Listed Companies in Luxembourg : Setting a Quantitative Objective

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Author: Céline LELIEVRE

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[1] introduced a quantitative target regarding gender balance on the boards of such companies. The bill transposing this directive into Luxembourgish law was submitted to the Chamber of Deputies on 28 March 2025[2].

The bill provides that companies whose shares are admitted to trading on a regulated market in one or more EU Member States and which have their registered office in Luxembourg must ensure that, by 30 June 2026 at the latest, at least 33% of all board positions, both executive and non-executive, are held by members of the underrepresented sex.

If there is a debate about the number of board seats required to meet the target, the bill states that the closest whole number to 33% should be used, without exceeding 49%. For instance, if a board has five members, two should be from the underrepresented gender—equating to 40% of the board.

The bill also stipulates that companies must select candidates based on a comparative assessment of qualifications, with selection criteria defined in advance. The text specifies:

“Where candidates are equally qualified in terms of suitability, competence and professional performance, priority shall be given to the candidate of the underrepresented sex, unless, in exceptional cases, overriding reasons having legal precedence—such as the pursuit of other diversity policies—objectively assessed and based on non-discriminatory criteria, tilt the decision in favor of the other candidate.”

Therefore, if a rejected candidate of the underrepresented sex demonstrates in court that they had equivalent qualifications to the selected candidate of the opposite sex, the listed company must prove there was no breach of the rule.

Only large listed companies are subject to this legislation. Micro, small and medium-sized enterprises (SMEs)—defined as companies with fewer than 250 employees and an annual turnover not exceeding €50 million or an annual balance sheet total not exceeding €43 million[3]—are excluded.

The explanatory memorandum notes that improving gender representation at board level could have a broader impact—attracting female talent, increasing female leadership across all levels, and helping reduce employment and pay gaps between men and women[4].

According to the bill, the economic significance and high visibility of these companies make them particularly effective platforms for promoting gender equality.

References

  1. Directive (EU) 2022/2381 of 23 November 2022 on improving the gender balance among directors of listed companies and related measures.
    Official text
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  2. Luxembourg bill No. 8372 submitted on 28 March 2025 to the Chamber of Deputies.
    www.chd.lu
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  3. Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (SMEs).
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  4. Impact assessment accompanying the Commission’s proposal for Directive COM(2021) 930 final.
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