Board diversity disclosure

Legal base

Article 1 of the DIRECTIVE requires large listed companies15 to disclose in their corporate governance statement: "a description of the diversity policy applied in relation to the undertaking's administrative, management and supervisory bodies with regard to aspects such as, for instance, age, gender, or educational and professional backgrounds, the objectives of that diversity policy, how it has been implemented and the results in the reporting period. If no such policy is applied, the statement shall contain an explanation as to why this is the case."

Diversity aspects 

Companies should specify the diversity criteria applied and explain the rationale behind them. When selecting these criteria, companies should consider all relevant diversity aspects with a view to ensure that the board has sufficient diversity of views and sufficient competences for a good understanding of current affairs as well as longer-term risks and opportunities related to the company's business. In assessing the necessary profiles for optimal board diversity, the company should take into account the nature and complexity of its business as well as the social and environmental context in which it operates.

The diversity aspects should, in general, cover age, gender, or educational and professional backgrounds, but also, where relevant due to the company's geographical presence and the business sector in which it operates, geographical provenance, international experience, expertise in relevant sustainability matters, employee representation and other aspects, such as for example socio-economic background or ethnic origin.

Objectives

Companies should define and disclose specific measurable targets with respect to relevant diversity aspects. When a company's board is sufficiently large, it is best practice to set ambitious quantitative targets, in particular regarding gender balance.

Implementation and results

Companies should disclose the processes used to ensure that the objectives of their diversity policy are applied in the succession planning, selection, nomination and evaluation. They should also disclose what role the competent board committees play in those processes. Companies should also disclose whether the information about diversity criteria and objectives was given to shareholders in the context of the election or renewal of board members.

Companies should disclose the status of the implementation and the results at least since the last statement, with regard to all the diversity aspects of the policy. If the diversity objectives are not met, the company should disclose the expected timeframe within which these objectives are to be met.