Spain: Law requires 40% of company directors to be women

The gender quota law will be approved at a weekly cabinet meeting on March 7 before going to Congress, Prime Minister Pedro Sánchez announced on Saturday. The law will seek to stipulate that boards include at least 40% of “the least represented gender” and that they ensure there is a similar level of parity in top management, the government said in a separate statement.

If approved, the rules will apply to all publicly traded companies by July 1, 2024 and to all companies with at least 250 employees and 50 million euros ($53 million) in annual revenue by June 30, 2026. The government will also set a 40 percent quota for the cabinet and will require all political lists for elections to alternate between male and female candidates.

Sánchez has repeatedly defined his Socialist-led coalition government as feminist and pushed high-profile equality legislation, including transgender rights and a politically controversial sexual consent law. Fourteen of its 22 ministers are women and all three deputy prime ministers are women.

Gender parity is not uncommon in Spain’s top boardrooms. The local securities regulator has a non-binding recommendation for public companies to have at least 40% women on their boards. While many of the companies on the Ibex 35 benchmark meet or are relatively close, some fall short. The lack of gender parity on boards is more severe for smaller off-benchmark companies.

Sánchez’s decision to pass legislation mandating board parity is in line with a European Union directive issued last year that requires such legislation to be passed in the region by 2026. This policy does not require parity in top management or in political positions.