Organic Law 2/2024, of August 1, on equal representation and balanced presence of women and men (“Parity Law”), with regard to listed companies, its main objective is to ensure that they reach minimum thresholds of presence of the less represented sex on their boards.
The Gender Parity Law is an organic law because it affects fundamental rights of men and women in our society. This law applies to political parties, professional associations, publicly traded companies, and labor unions.
In this circular, we will discuss the impact of the Law on listed companies. The law establishes a minimum legal quota of 40% women on the Board of Directors, effective June 30, 2026, for companies listed on the IBEX 35 and June 30, 2027, for all publicly traded companies.
The selection processes for board members will be adjusted: if the quota is not met, the selection process must be adapted to comply. The law refers to the "less represented sex," but it is clear that for the moment this refers to women.
The law also establishes transparency measures requiring annual reporting on the presence of women and men, in order to monitor compliance. It will also mandate gender parity in senior stock market management and includes a sanctions regime: non-compliance will be considered a serious offense.
Therefore, for listed companies, we have:
- Minimum quota of 40% female board members
- Adjustments to the processes for selecting board members
- New transparency measures
- Promote parity in senior management
- Sanctioning regime
The minimum quota has a deadline of June 30, 2026, for IBEX 35 companies and June 30, 2027, for all other listed companies. Therefore, to put it simply: Banco Santander must have at least 40% of the currently underrepresented gender on its boards by June 30, 2026. DIA, on the other hand, must have this quota in place by June 30, 2027.
The rounding rule must be respected, whereby the percentage closest to 40% should be used. For practical purposes, the European Directive provides a list of examples. For instance, if there are 30 directors, a minimum of 12 must be of the underrepresented sex. But if there are 29, there must also be 12 directors of the underrepresented sex. If there are 28 directors, 11 are permitted, which would be less than 40% but would be 39.3%.
In the event of vacancies due to the resignation or departure of a board member, parity will be restored through co-option appointments at the next board meeting. Spanish law has taken the liberty of disregarding the parity rule in favor of women, an aspect not foreseen in the Directive.
In the case of the board member selection process, if the gender parity quota is not being met, the selection process must be adjusted. The company must communicate the criteria for selecting or rejecting candidates, and the candidates have the right to know them.
With regard to senior management, companies will ensure that the composition of senior management also includes the underrepresented 40%. Furthermore, they must detail these aspects in their annual report, and when this 40% threshold is not met, explain why and the reasons for this.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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