Belgium transposes the Women on Boards Directive: a further step towards more balanced corporate governance

The Directive requires Member States to take measures to achieve a more balanced composition of the boards of listed companies. It does not rely solely on quotas, but also places emphasis on objective selection procedures, transparency and reporting.

Belgium as a European frontrunner

Since the Law of 28 July 2011, Belgium has had statutory gender quotas for listed companies, autonomous public undertakings and the National Lottery. Under this regime, at least one third of the members of the board of directors must be of the underrepresented gender.

The impact of this legislation is clearly visible. In 2024, more than 93% of listed companies complied with the statutory quotas, while women accounted for approximately 37% of directors. Belgium therefore ranks among the European frontrunners in terms of gender diversity on boards of directors.

However, this positive development remains largely confined to boards of directors. The representation of women in executive management remains significantly lower. On average, women account for only around one fifth of the members of executive committees, while several companies continue to be managed exclusively, or almost exclusively, by men. The main challenge today therefore no longer lies solely at board level, but also within the day-to-day management of companies.

What does the European Directive require?

The Women on Boards Directive allows Member States to choose between two alternative targets. They may provide either that at least 40% of non-executive director positions are held by members of the underrepresented gender, or that at least 33% of all director positions, both executive and non-executive, are held by members of the underrepresented gender.

To achieve these targets, the Directive requires Member States, among other things, to:

• introduce transparent and objective appointment procedures;
• apply objective selection criteria established in advance;
• assess candidates on the basis of their individual merits;
• strengthen reporting on gender diversity.

The Directive therefore seeks not only to achieve a certain proportion of women among directors, but also to ensure that appointment procedures are conducted in a transparent and non-discriminatory manner.

Implementation in Belgium

The Belgian preliminary draft law is largely aligned with the existing legal framework and mainly introduces additional procedural and reporting requirements.

For listed companies, a transparent appointment procedure will be introduced, based on objective selection criteria established in advance. Corporate governance requirements will also be extended.

Where a company fails to meet the applicable gender quota, it will be required to explain in its corporate governance statement why the target was not achieved, what measures are being taken to remedy the situation and whether any benefits attached to directorships have been suspended.

In addition, the existing quota regime will be extended to the management board of companies that have adopted a dualistic governance structure. For autonomous public undertakings, the gender requirements will also cease to apply exclusively to the board of directors and will be extended to executive management.

What about executive management?

Although the preliminary draft law endorses the objectives of the Directive, it may be questioned whether the chosen approach to implementation goes far enough. Belgian corporate practice is dominated by the one-tier governance model: more than 94% of listed companies have only a board of directors, while executive management does not constitute a formal corporate body.

As the extension of the statutory quotas applies only to the management board within a dualistic governance structure, the majority of executive management positions remain outside the scope of the new rules. Yet this is precisely where gender inequality currently appears to be most pronounced. There is therefore a risk that companies with a one-tier governance structure will have little incentive to pursue a more balanced representation at executive management level.

Soft law

Against this background, a broader approach could be considered, whereby the statutory framework is supplemented by soft law, in particular through the Belgian Corporate Governance Code.

Such an approach could encourage listed companies to set concrete diversity targets for their executive management, report annually on progress and develop a gender equality plan with measurable objectives and periodic assessments. This would allow all listed companies to be subject to comparable expectations, irrespective of their governance structure, while preserving sufficient flexibility to take account of the specific governance arrangements of each company.

Conclusion

By transposing the Women on Boards Directive, Belgium is taking an important further step in promoting gender diversity within listed companies. In addition to the existing quotas, the new rules place greater emphasis on transparent appointment procedures, reporting and a coherent diversity policy. At the same time, the question remains as to how the representation of women in executive management can be further strengthened, given that the most significant gender gap is precisely at that level.

Companies would therefore be well advised to assess in a timely manner whether their governance and appointment procedures comply with the new statutory requirements and whether further adjustments to their internal processes, corporate governance documentation or reporting are required.

Andersen is closely monitoring these developments and assists companies, directors and shareholders in assessing the impact of the new rules. We can support clients, among other things, in determining the applicable requirements, implementing compliant appointment procedures, updating corporate governance documentation and ensuring compliance with the new reporting obligations.

Should you have any questions about the impact of the transposition on your company, our Corporate & Business Law specialists would be pleased to assist you.