A week ago, on November 22, 2022, the European Parliament formally adopted the new EU law on gender balance on corporate boards. By 2026, publicly listed companies across the EU will need to have 40% of the underrepresented sex among non-executive directors or 33% among all directors.
The new law will enter into force this December, and member states will have two years to transpose it into national legislation. They will have to ensure that publicly listed companies strive to meet the 40% target for non-executive boards, or 33% for all board members, by 30 June 2026.
You may be tempted to think: yeah, this new directive is something for publicly listed companies. We are not on the stock exchange, so why should we care?
Let’s take a look at some of the strategic consequences that the new EU Gender Balance Directive will have on all of us – including your company and your career.
1. FINALLY, COMPANIES WILL START TAKING DEI SERIOUSLY
Many companies across Europe have been deploying DEI (diversity, equity and inclusion) or, as I like to call it, JEDI (justice, equity, diversity and inclusion) programs for the last decade.
However, the results remain poor.
Change is hard; people and companies will always try to preserve the status quo as long as they can get away with it.
Moreover, over the last 20 years we faced a devastating financial crisis, a global pandemic, and now war and hyperinflation. Therefore, in an attempt to survive short term, it’s easy to get your eyes off the long-term “soft ball” such as sustainability and DEI.
This is precisely why we need clear goals and boundaries to focus our attention on what matters long term. With clear achievement and reporting goals in place, from 2026 we will be able to see black on white which company takes their DEI efforts seriously and which is lagging behind.
2. A HUGE OPPORTUNITY FOR STRATEGIC HR
The HR departments in corporate organizations have been struggling for decades to make their voices heard and to prove their strategic relevance for organizations.
Now, with the new law in place, the HR gains a major chance to assert the real impact of diversity on the company bottom-line.
Armed with the legal framework, HR professionals gain a stronger, strategic voice in the board and at the negotiation table.
I do hope colleagues from the HR departments will use this voice mindfully and strategically, for the greater good of their organizations and of us all.
3. MORE COMPETITION
We can also expect competition for the open jobs in top leadership to increase on all fronts: inside organizations and outside on the wider market.
Currently, numerous companies are confronted with (almost) dry female talent pipelines. Confronted with a clear deadline (June 2026), it will be very interesting to observe where companies will stretch to nurture their pipelines – within the organization or elsewhere.
One thing publicly listed companies can do is to try to recruit smart women from non-publicly listed companies on their local markets. Non-listed companies thus risk falling into a negative downwards DEI spiral that can bring a loss of potential candidates, higher hiring expenses, and loss of business. This is how competition will increase between listen and non-listed companies.
Another thing listed companies may try is to bring women candidates from non-EU countries. Working with colleagues from Asia and LATAM, I know how hungry they are to succeed. Competition will thus increase also among continents, not just among companies or countries.
Last but not least, we can expect an increase in competition among candidates for the higher jobs, between men and women from the same organization who will want to prove that they deserve a seat on the board, and among women from the same organizations who want to grow in their careers.
In other words – being good at what you do and being strategically visible will be qualities in high demand within the next few years, to help you turn this situation into an opportunity.
4. MORE REAL FOCUS ON THE EMPTY FEMALE TALENT PIPELINES
Same like with the first consequence, more focus on DEI means more focus on understanding why companies constantly bleed female talent and why so many women still get lost in the female talent pipeline.
This is why we can expect more budgets to be mindfully dedicated to upskilling people and to creating high impact containers for co-creative dialogue: among women in various positions, among women and men, among diversity groups overall.
5. MORE FOCUS ON FLEXIBLE HYBRID AND REMOTE WORK POLICIES
One of the main reasons that women leave corporate in record numbers is their sheer exhaustion. The burden of home care is still falling disproportionately on women’s shoulders.
Companies that want to nurture their female talent pipeline and increase the retention of women leaders will need to do much more to deploy functioning policies of hybrid and remote work. This also means a need to upskill their leaders in remote and hybrid work productivity management, to prevent confusion and burnout.
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6. LESS BURNOUT AND FINALLY A CHANCE FOR LIFE-WORK INTEGRATION
Thanks to more flexible work policies, women will finally get a chance to manage their careers and lives better.
We will – hopefully – get over the delusion of work-life balance and start talking about life-work integration as the quality of experience that we require in every role.
7. MORE MEDIA VISIBILITY
Because publicly listed companies are constantly in the investors’ and media’s eyes, we can expect more business journalists to look into DEI issues when covering companies and the sustainability of their business models.
Here is the thing: we don’t do diversity because we have nothing better to do with our time. We develop and leverage a diversity-driven mindset because otherwise we simply cannot understand our customers / stakeholders and their diverse profiles and needs.
Without diversity we are not able to sell short term and to innovate long term, which means that our business is unsustainable. Smart journalists will spot this connection and they will write and talk about it. As it happens, a negative editorial still has the power to trigger immediate drops in the share price of a company, which is enough to get shareholders’ attention – and buy in for proper DEI.
8. MORE OPPORTUNITIES FOR STRATEGIC PERSONAL BRANDING FOR WOMEN LEADERS
Given the increased media visibility, we can also expect more companies with decent, smart, and articulate women at the top to want to make them more visible in an effort to present themselves as great employers for women.
This opportunity for strategic visibility should not be missed by any long-term thinking woman leader.
9. THE EMERGENCE OF NEW SERVICES
I have been looking for a personal assistant for ages – precisely the person who would come three times a week to my place to do the shopping, cook, clean, and manage chores that take so much of my time. So far, it’s been impossible to find it.
We can expect that more personal support services to emerge in the future, to take the burden off the shoulders of women leaders. More care provided means more time for strategic thinking and reflection, which leads to higher quality leadership.
10. MORE MATURITY AND WISDOM AT THE TOP OF CORPORATE ORGANIZATIONS
Ultimately, this is what we are after: co-created solutions for the wellbeing of the company, its clients, employees, shareholders and the entire business ecosystem.
This is not about having more women at the top; this is about having more wise women who are able to stand in their full power, to articulate their truth with courage, and thus to become real thought and action partner for mature, courageous male leaders.
Our future is a matter of co-created solutions. This is our deep conviction at VORNICA and I personally can only hope that the future will take us in that direction.
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