20 Juni 2025 Rémy Bonneau  -  Eugenie Syx  - Marie Arnaud-Rio Equity Capital Markets - Gesellschaftsrecht - ESG

Luxembourg initiates the transposition of the Women on Boards Directive

The so-called Women on Boards Directive (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”) aims to achieve a more balanced representation of women and men among the directors of listed companies by establishing effective measures to accelerate progress towards gender balance, while allowing listed companies sufficient time to make the necessary arrangements for that purpose. 

On 28 March 2025, Luxembourg introduced draft bill n°8519 before the Luxembourg parliament to implement the Directive (the “Draft Law”) which generally follows a no gold-platting approach.

Below is an overview of the key aspects of the Draft Law:

1. Envisaged scope of application

The requirements introduced by the Draft Law in respect of gender balance apply to listed companies which have their registered office in the Grand Duchy of Luxembourg and which shares are admitted to trading on a regulated market[1] in one or several Member States. 

However, these requirements are not applicable to listed companies which are “SME” (i.e., micro, small and medium companies which employ less than 250 persons and have an annual turnover not exceeding EUR 50 million or an annual balance sheet total not exceeding EUR 43 million).

2. Main requirements for in-scope listed companies

2.2 Objectives with regard to gender balance on boards

The Draft Law introduces a new requirement for listed companies which must ensure, by no later than 30 June 2026, that members of the underrepresented sex hold at least 33% of all director[2] positions, whether executive[3] or non-executive[4] (the “Gender Balance Objective”).A table is also annexed to the Draft Law with the minimum number of directors of the underrepresented sex required to meet the Gender Balance Objective compared to the total number of director positions.

2.2 Means to reach these objectives

Listed companies which fail to reach the Gender Balance Objective must adjust their candidate selection processes for appointment or election to director positions. Such processes are subject to the following requirements:

  • Select candidates on the basis of a comparative assessment of their qualifications with clear, neutrally formulated and unambiguous criteria in a non-discriminatory manner, on the basis of pre-established criteria.
  • Give priority to the candidate of the underrepresented sex when choosing between equally qualified candidates unless there are, in exceptional cases, reasons of greater legal weight (e.g., pursuit of other diversity policies).
  • Inform candidates, at their request, of (a) the qualification criteria upon which the selection was based, (b) the objective comparative assessment of the candidates under those criteria, and (c) where relevant, the specific considerations exceptionally tilting the balance in favour of a candidate who is not of the underrepresented sex.
  • Where the selection process is made through shareholders or employees’ vote, ensure that voters are properly informed regarding the measures set out in the Draft Law, including sanctions for the listed company in case of failure to comply with its obligations.
  • In case of dispute before a court, where an unsuccessful candidate of the underrepresented sex establishes facts, from which it may be presumed that that candidate was as equally qualified as the selected candidate of the other sex, proof that there has been no breach of the requirement to give priority set out under paragraph (ii) above rests with the listed company.

2.3 Reporting obligations

The Draft Law introduces several reporting obligations for listed companies as regards the Gender Balance Objective:

  • Provide the Luxembourg Commission de surveillance du secteur financier (the “CSSF”) annually with (a) information about the gender representation on their boards, distinguishing between executive and non-executive directors, and the measures taken to achieve the Gender Balance Objective, and (b) if they did not reach the Gender Balance Objective, the reasons for failing and a comprehensive description of the measures which they have already taken or intend to take in order to achieve the Gender Balance Objective (collectively, the “Gender Balance Information”).
  • Publish the Gender Balance Information on their website in an appropriate and easily accessible manner.
  • If applicable, include the Gender Balance Information in their governance statement in accordance with Directive 2013/34/EU.

Based on the information so provided, the CSSF will be in charge of analysing and monitoring the gender balance on boards of listed companies and will notably publish and update on a regular basis, in an easily accessible and centralised manner, a list of the listed companies which reach the Gender Balance Objective.

3. Sanctions

The Draft Law introduces a set of sanctions and administrative measures which may be imposed by the CSSF against listed companies in breach of the requirements regarding the means to reach the Gender Balance Objective or their reporting requirements. These include (i) a warning, (ii) a reprimand, (iii) a public statement disclosing the identity of the listed company and the nature of the breach, (iv) an injunction requiring the listed company to comply with its obligations, and (v) a fine from EUR 250 to EUR 250,000.

When imposing an injunction, the CSSF may also impose a daily penalty (astreinte) on the listed company to further incentivise to comply with its obligations. The maximum amount of such daily penalty is set at EUR 1,250 per day, but shall not exceed a total amount of EUR 25,000 per breach.

4. What’s next?

As the Draft Law has not been adopted yet, it will be interesting to see how it evolves during the parliamentary procedure.

In practice, in anticipation of the 30 June 2026 deadline, listed companies should assess whether they are in scope of the Draft Law, the current composition of their boards as well as determine any steps required to ensure compliance with these new requirements, notably with regard to their candidate selection processes.

 


 

[1] Within the meaning of article 4(1), point (21), of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast).

[2] For this purpose, a “director” means a member of a board, including a member who is an employee representative, and a “board” means an administrative, management or supervisory body of a listed company. 

[3] For this purpose, an “executive director” means, in a one-tier system, a member of a board who is in charge of the daily management of a listed company, or in a two-tier system, a member of a board who carries out the management functions in a listed company.

[4] For this purpose, a “non-executive director” means, in a one-tier system, a member of a board other than an executive director or, in a two-tier system, a member of a board who carries out supervisory functions in a listed company.