The Clock Is Ticking on Gender Representation for Luxembourg-Listed Company Boards

Luxembourg transposed EU Directive 2022/2381¹ (the Directive) by enacting the law of December 19, 2025 establishing a quantitative target for gender balance among the directors of listed companies (the Law). Listed companies within the scope of the Law are subject to the target that by 30 June 2026 at the latest, members of the under-represented sex hold at least 33% of all director positions, both executive and non-executive, and such companies are legally required to take measures with the aim of reaching that target. It is worth noting that – in line with the Directive – the Law uses the gender-neutral term "under-represented sex" rather than "women", reflecting the Directive's broader ambition of ensuring "full equality in practice between men and women in working life." In practice, however, the under-represented sex on most listed company boards is female.

This OnPoint sets out the key features of the Law and the steps that boards may wish to consider taking now, to the extent they have not reached the target set in the Law.

Scope of Application: Which Companies Are Affected?

The Law applies to all companies whose shares are admitted to trading on a regulated market² and whose registered office is in Luxembourg. It is not limited to companies listed on the Luxembourg Stock Exchange's regulated market.

The following entities are excluded from the scope of the Law:

• companies listed exclusively on a multilateral trading facility (MTF), such as the Euro MTF market of the Luxembourg Stock Exchange, which does not qualify as a ‘regulated market’; and
• small and medium-sized enterprises (SMEs) – including micro-enterprises – defined as enterprises that employ fewer than 250 persons and whose annual turnover does not exceed €50,000,000 or whose annual balance sheet total does not exceed €43,000,000, even if the SME is listed on a regulated market.

The scope of the Law is broad and also covers investment funds, to the extent their registered office is located in Luxembourg and their shares are admitted to trading on a regulated market in one or more EU member states, provided they do not qualify as SMEs. The Law is silent as to application to other typical legal forms for Luxembourg investment structures such as SCS (sociétés en commandite simples), SCSp (sociétés en commandite spéciales) or SCA (sociétés en commandite par actions). However, as the Law refers to terms such as director (administrateur), board (conseil) and shares (actions), it can be inferred that such partnership structures, which typically do not have directors, a proper board and/or issue shares, would be excluded from the scope of the Law, although this remains an interpretation from the text of the Law. It remains to be seen whether any guidelines or interpretative guidance on this point will provide greater clarity in the future.

The Core Obligation: A Single Quantitative Gender Balance Target

While the Directive permitted Member States to allow companies to choose between a 40% non-executive target and a 33% all-directors target, Luxembourg has opted for a single, unified 33% target covering all board members. In-scope, listed companies are legally required to update their internal candidate selection process with the aim of having members of the under-represented sex occupy at least 33% of all director positions – both executive and non-executive – to the extent their board composition does not already contain at least 33% members of the under-represented sex.

Calculating the Target: Use the Annex Table

The applicable minimum number of directors of the under-represented sex to take into consideration is the number closest to a proportion of 33%, without exceeding 49%, as set out in the Law's Annex. Companies should refer to the table annexed to the Law since the result is not always a simple round-down, and the effective percentage will vary slightly above or below 33% depending on board size:

Process Requirements: Transparent and Merit-Based Selection

The Law imposes important procedural obligations on companies that do not achieve the 33% objective:

Companies are required to select candidates for nomination or election to a director position on the basis of a comparative assessment of qualifications, applying clear, neutrally formulated and unambiguous criteria in a non-discriminatory manner throughout the entire selection process – from vacancy notices and pre-selection through to shortlists and candidate pools. These criteria must be established before the selection process begins.

• Where two candidates are equally qualified, priority must be given to the candidate of the under-represented sex unless, in exceptional cases, an objective assessment taking account of all criteria specific to the individual candidates tilts the balance in favor of the other candidate.
• Where the selection process involves a vote of shareholders or employees, companies are required to take measures to properly inform voters of the requirements provided for by the Law, including the sanctions to which the company may be exposed in the event of non-compliance.
• Companies are required, upon request, to provide unselected candidates with information on the selection criteria applied and the reasons why the candidate of the under-represented sex was not chosen where applicable.

Reporting Obligations

On an annual basis, in-scope companies are required to provide the CSSF³ with information on the gender representation in their boards and on the measures taken to achieve the 33% objective. Companies are to publish this information on their website in an appropriate and easily accessible manner.

The CSSF will publish and regularly update, in an easily accessible and centralized manner, a list of listed companies that have achieved the objective. This public register will most likely act as a meaningful credential since companies that fall short of the Law’s requirements will be identifiable by investors, proxy advisers and the media.

Where a listed company has not achieved the 33% objective, its annual report to the CSSF is to include an explanation as to the reasons for such a non-achievement and a full description of the measures already taken or planned to achieve it. Where applicable, this information shall also be included in the company's corporate governance statement in accordance with the Accounting Directive (2013/34/EU).⁴

Sanctions for Non-Compliance

As the Luxembourg designated supervisory authority, the CSSF may, in the event of a breach of the selection process or reporting obligations, impose sanctions such as a warning, a reprimand, a public declaration identifying the listed company and the nature of the violation, an administrative fine ranging from EUR 250 to EUR 250,000 or periodic penalty payments (astreintes) of up to EUR 1,250 per day of non-compliance, subject to a total cap of EUR 25,000 per breach.

The Law does not provide that director appointments made in breach of its provisions will be annulled – preserving legal certainty around board decisions and corporate governance stability while maintaining financial and reputational consequences for non-compliance. Nevertheless, it is worth noting that where a rejected candidate of the under-represented sex establishes, before a court, facts from which it may be presumed that the candidate had qualifications equal to those of the selected candidate of the other sex, the burden of proof shifts to the company to demonstrate that it did not breach its selection process obligations.

Sunset Clause

The Law shall cease to be in force on December 31, 2038, reflecting its purpose as a temporary, structural catalyst for lasting change in board composition rather than a permanent legislative fixture.

What Boards Should Do Now

In-scope listed companies may wish to consider taking the following practical steps without delay:

1. Assess current board composition: map the current gender breakdown of the board to determine the gap between the current position and the applicable target.
2. Review nomination processes: audit current director selection and nomination procedures to take steps towards compliance with the transparency, pre-established criteria and comparative assessment requirements of the Law; update nomination committee terms of reference and selection criteria accordingly and check that criteria are set before any process begins.
3. Plan ahead for appointments: factor the gender balance target into succession planning and the timing of upcoming board renewals and AGM agendas.
4. Update AGM documentation: where director appointments are subject to shareholder vote, put processes in place so that AGM materials properly inform voters of the Law's requirements and the sanctions applicable in case of non-compliance; maintain robust documentation of selection processes and criteria applied – this will most likely be essential given the reversed burden of proof in the event of a legal challenge.
5. Prepare reporting disclosures: take measures to ensure that the annual information provided to the CSSF – and published on the company's website – captures the required gender balance data from the next reporting cycle onwards; if the target is not met, prepare a full explanation and action plan.
6. Engage shareholders and investors proactively: institutional investors and proxy advisers are increasingly focused on board composition diversity; a proactive engagement ahead of AGMs is advisable.

Conclusion

With the June 30, 2026 compliance deadline being met, boards and nomination committees are recommended to treat this as a priority governance matter and take concrete steps now to assess their current position, review their nomination processes and plan for any necessary changes to board composition, if required. Companies that act proactively – rather than waiting for regulatory scrutiny – will be best placed to meet the targets on time, demonstrate strong governance credentials to investors and avoid the reputational, financial and legal risks of non-compliance.