On 28 March 2025, the Luxembourg government submitted bill of law 8519 (Bill of Law) implementing Directive (EU) 2022/2381 on improving the gender balance among directors of listed companies and related measures (Directive) to the Luxembourg Parliament.
For the main objectives and contents of the Directive, see our newsflash published earlier this year.
The Bill of Law introduces a quantitative target for gender balance on the management boards of listed companies.
1. Scope of application
The Bill of Law applies to all companies whose shares are admitted to trading on a regulated market in one or more Member States and who have their registered office in Luxembourg, other than micro, small and medium-sized companies (listed companies). Micro, small and medium-sized companies are companies employing on average fewer than 250 full-time equivalent employees, with annual turnover not exceeding EUR 50 million and an annual balance sheet total not exceeding EUR 43 million.
2. Details of the Bill of Law
a) Objective: women to occupy 33% of all board positions by 30 June 2026
The Bill of Law only adopts one of the two options offered by the Directive to ensure gender balance on the management board.
Accordingly, listed companies must ensure that, by no later than 30 June 2026, members of the under-represented sex occupy at least 33% of all board positions, both executive and non-executive.
The preamble to the Bill of Law states that the Luxembourg government has opted for this approach in order to promote a more balanced representation of women and men on boards, and thereby increase the proportion of members of the under-represented sex in listed companies in all decision-making positions, not just in non-executive director positions. The Directive's other option, not included in the Bill of Law, is to ensure that at least 40% of non-executive directors are from the under-represented sex.
b) Process for reaching this objective
The Bill of Law sets out binding measures on the director selection process, aligned with the measures provided for in the Directive, to enable listed companies to reach this objective.
In particular, if an unsuccessful candidate of the under-represented sex establishes facts before a court from which it may be presumed that they were as equally qualified as the candidate of the other sex who was selected for appointment or election to a director position, it is for the listed company to prove that there was no breach of the selection process.
c) Reporting of information
Regarding reporting requirements, the Commission de Surveillance du Secteur Financier (CSSF) is designated as the competent national authority to which listed companies are required to provide information on the composition of their boards. It will be responsible for analysing and monitoring gender balance within boards.
Listed companies will also have to publish information about the gender balance of their boards on their website in an appropriate and easily accessible manner.
d) Sanctions
In cases of non-compliance with the requirements for the process to reach the objectives and to report and publish information, as mentioned above, the CSSF may apply various administrative measures and sanctions including a public declaration detailing the nature of the breach or a fine of up to EUR 250 000.
3. Next steps
The Bill of Law will now follow the legislative procedure for Luxembourg legislation, whose duration will depend on whether and how fast consensus is reached among the different stakeholders. Member States should have implemented the Directive into national law by 28 December 2024, and the submission of the Bill of Law constitutes an important step towards meeting this obligation. As the provisions of the Bill of Law are now known (although not yet final), we recommend that in-scope companies progress their assessment of the current composition of their management boards and prepare strategies to achieve the objectives set out in the Directive and the Bill of Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
