Regulations introduced in 2025 impose new board gender balance obligations on many Irish companies listed on certain EU markets, with gender balance targets for both executive directors and non-executive directors (“NEDs”) to be achieved by 30 June 2026.
The new regulations introduce new reporting requirements for all in-scope companies. Companies that do not meet the required gender balance for NEDs will be subject to a range of new requirements for NED candidate selection and new shareholder disclosure obligations. With AGM season approaching, Irish issuers should keep these new obligations in mind when selecting the candidates for election and re-election to the board to ensure they are in a position to satisfy the gender balance objectives by the deadline.
Background
In May 2025, Minister for Children, Disability and Equality Norma Foley (the “Minister”) signed the European Union (Gender Balance on Boards of Certain Companies) Regulations 2025 the “Regulations”) into law. The Regulations give effect to an EU Directive, introduced with the aim of ensuring that opportunities continue to be distributed equally amongst men and women, as well as achieving a balanced gender representation on the boards of the EU’s listed companies.
What companies are subject to the rules?
The Regulations apply to all companies with their registered office in Ireland, which:
- have their shares admitted to trading on an EU ‘regulated market’ (eg, Euronext Dublin, Bourse de Luxembourg, Euronext Amsterdam or Euronext Paris); and
- are not micro, small and medium-sized enterprises or SMEs.
A company is classified as a “micro, small and medium-sized enterprise or SME” if it (a) employs less than 250 persons and (b) has an annual turnover not exceeding €50,000,000 or an annual balance sheet total not exceeding €43,000,000.
Private companies are not subject to the Regulations, nor are Irish companies that have their shares listed on a market that is not an EU ‘regulated market’ (so Irish companies listed on non-EU markets such as NYSE, NASDAQ, the London Stock Exchange or EU multilateral trading facilities, like Euronext Growth, are not subject to these rules).
Gender balance objectives
The Regulations introduce new objectives for in-scope companies with respect to gender balance among both executive and non-executive directors:
- Non-executive directors: Companies subject to the Regulations are required to set as an objective that by 30 June 2026 at least 40% of their NEDs be made up of members of the ‘underrepresented sex’ (the “NED Objective”) – see below. Failing to meet the NED Objective is not a breach of the Regulations, but companies that do not achieve will be subject to extensive additional obligations and requirements to report to the Minister – see below.
- Executive directors: In-scope companies are required to set, in writing, “individual quantitative objectives” with a view to improving the gender balance among executive directors, specifying the steps being taken in aiming to achieve those individual quantitative objectives by 30 June 2026 (the “Exec Objectives”). This information must be published on the company’s website by 30 November 2026.
As most companies with shares listed on Euronext Dublin currently meet the NED Objective, the requirements to set and publish the Exec Objectives may be of greater relevance to many in-scope companies.
The ‘underrepresented sex’
As described above, the NED Objective requires in-scope companies to set the objective that at least 40% of their NEDs be of the ‘underrepresented sex’. This term is used in the legislation in a gender neutral way and can, depending on the context, refer to men or women (the Regulations envisage only two sexes – there is no scope under the Regulations for NEDs to be classified as non-binary or any other gender).
Failing to meet the NED Objective: additional candidate selection requirements
If an in-scope company does not meet the NED Objective by 30 June 2026, the company will be subject to four key further obligations:
- Candidate selection criteria: The company must adjust its process for selecting candidates for NED roles so that it: (a) selects candidates for non-executive director roles on the basis of a comparative assessment of the qualifications of each candidate; (b) for this purpose, establishes in advance clear, neutrally formulated and unambiguous criteria in writing; and (c) applies the criteria in a non-discriminatory manner throughout the entire selection process, including during the preparation of vacancy notices, the pre-selection phase, the shortlisting phase and the establishment of pools of such candidates. The company must document its compliance with these rules in writing and provide the documentation to the Minister on an annual basis by 30 November.
- Preference for candidates of the underrepresented sex: If the company is choosing between candidates for NED roles who are equally qualified in terms of “suitability, competence and professional performance”, the company must give priority to the candidate of the underrepresented sex. Companies can deviate from this requirement in exceptional cases, where reasons of “greater legal weight” such as (in certain cases) where the pursuit of other diversity policies override the gender priority. The company must also document its compliance with these rules in writing and provide the documentation to the Minister on an annual basis by 30 November. Where the priority of a candidate of the underrepresented sex was overridden, the company needs to provide the Minister with the supporting reasons.
- Candidate information requests: If a candidate for a NED position requests it, the company must provide the candidate with: (a) the qualification criteria that the selection was based on; (b) the selection criteria that the company has established under the Regulations; and (c) where applicable, the specific considerations exceptionally overriding the priority that the candidate of the underrepresented sex should have been afforded under the Regulations. The Regulations do not require that the identity of other candidates be disclosed. Any information proposed to be shared should be considered carefully from a data privacy perspective.
- Notifications to shareholders: The Irish and UK Corporate Governance Codes (and the constitutions of many Irish listed companies) require that all directors be subject to annual re-election. Companies in-scope for the Regulations must inform their shareholders in writing in advance of NED elections about the obligations of the Regulations and the penalties (see below). For most companies, the first shareholder communication will be required in advance of the 2027 AGM. The company must then provide a copy of this shareholder communication to the Minister by 30 November each year.
Annual reporting
In addition to shareholder communications, all in-scope companies (even those that meet the NED Objective) are required to engage in annual reporting to the Minister, with the first reports due by 30 November 2026.
The information to be reported includes details of gender representation on the company’s board and the measures taken by the company to achieve the NED Objective and the Exec Objective. If the company has not met the NED Objective or the Exec Objective by 30 June 2026, the company must also report the reasons it did not meet the objectives and provide a comprehensive description of the measures taken or intended to be taken to achieve the objectives.
Reporting is to be made to the Minister (in certain cases, through a new portal to be established) and the information must also be published on the company’s website by 30 November each year and included in the company’s next annual corporate governance statement (which must also be provided to the Minister as soon as practicable after publication). For most companies, these additional disclosures will first be required for corporate governance statements published in 2027.
Penalties
As mentioned above, failing to meet the NED Objective or the Exec Objective is not a breach of the Regulations and the Regulations do not provide for monetary penalties. Instead, the Regulations adopt a ‘name and shame’ approach, where failing to comply with the reporting / publication requirements, can result in the Minister publishing details of the non-compliance online.
Next steps
With the window for achieving the NED Objective and the Exec Objective getting closer, companies should be taking proactive steps now to assess readiness and implement action plans. These steps include:
- undertaking an assessment and review of existing board composition and mapping current levels of gender representation, particularly in light of candidate selection for forthcoming 2026 AGMs;
- preparing for updating diversity and other relevant disclosures in the issuer’s AGM documents and corporate governance statement – while the first disclosures for most issuers will be in their 2027 AGM documents and corporate governance statement, issuers who already comply with the relevant objectives could consider updating their 2026 AGM materials to highlight this;
- assessing and documenting the issuer’s proposed compliance strategy for the Regulations;
- reconsidering and assessing internal selection and appointment procedures and succession planning; and
- calibrating broader ESG and corporate governance strategy with diversity targets for senior positions.
Issuers will be keen to avoid the implications of failing to meet the Regulations’ gender balance objectives. However, usual corporate governance best practices are not overridden by the Regulations and boards must balance diversity obligations against the requirement for directors to have the appropriate combination of skills, experience and knowledge to effectively discharge their duties. Issuers should be particularly wary of risk of overboarding, when bolstering gender diversity on the board.
Proxy advisor benchmarking
Issuers should also be mindful of proxy advisors’ benchmarking requirements regarding gender diversity. For example, Glass Lewis’s 2026 benchmarking policy guidelines generally recommend that shareholders do not support the re-election of the chair of the nomination committee of an issuer where:
- ISEQ 20 boards are not composed of at least 33% gender diverse directors; and
- boards of companies listed on Euronext Dublin and Euronext Growth Dublin outside of the ISEQ 20 are not composed of at least 25% gender diverse directors.
Similarly, ISS may consider a negative recommendation for ISEQ20 companies, where less than 33% of the board is comprised of women.
How Can Matheson Help?
Matheson’s market leading governance and reporting practices have significant experience in advising issuers on compliance and governance best practice, including with respect to the Regulations. We work with our clients to navigate complex regulatory frameworks and implement best-in-class governance practices in a sustainable and strategic way.
If you would like to discuss the Regulations, their potential implications, or how best to ensure compliance for your business, please contact Susanne McMenamin ,or your usual Matheson contact.