With just over a year to go before EU-listed companies must meet mandatory gender diversity targets, data shows many high-yield issuers are falling short — some with zero women on their boards and no plans to change that.

The EU gender balance on corporate boards directive quietly entered into force at the end of 2024. It established a target for EU large listed companies to have 40% women on their non-executive directors and 33% among all directors by 2026.

Many companies within the 9fin universe may fall outside of the directive, but the rule helps to establish good practice for gender balance on corporate boards.

Between 2021 and 2022, a number of companies established targets to improve board and executive gender diversity. But since Donald Trump’s election as US president, many diversity targets have been walked back and some companies are not disclosing diversity metrics they previously reported.

This piece looks at board gender diversity across HY companies and their alignment with the rule, highlighting laggards and leaders.

Requirements of the rule

The directive was first proposed in January 2012 and, after a number of delays and pushback, the text was adopted in 2022.

Gender quotas have been the subject of much political debate and the rule specifies that, when choosing between equally qualified candidates, priority must be given to the underrepresented sex. The Commission found that, in EU member states with binding gender quotas, women accounted for 39.6% of the board members of the largest listed companies in 2024, whereas countries with soft measures had 33.8% female representation on corporate boards and 17% in countries that have taken no action at all.

Listed companies will also be obligated to disclose information about their selection assessment process and criteria if the candidate asks them to do so. If a candidate from an underrepresented sex can prove they were equally qualified for the role but didn’t get it, the burden of proof is shifted to the employer to prove discrimination did not occur.

In the US, however, a wave of reversals of diversity and inclusion policies is taking place. In a previous report, 9fin highlighted a number of HY companies that had rolled back DEI commitments. Some reports show that, despite the scale back in DEI reporting, 97% of US shareholders have rejected anti diversity, equity and inclusion policies.

Member states are required to include in their national legislation:

• Specific binding measures for the selection procedure of boards with gender neutral criteria
• Preference rules for the candidate of the underrepresented sex
• Individual commitments from listed companies to achieve gender balance among executive directors
• Reporting on board composition including obstacles to achieving the directive’s targets

Member states are required to define financial penalties for companies that fail to comply with transparent selection and reporting obligations.

Board gender diversity in HY companies

Globally, the share of women on corporate boards is just 20% (2022), rising to 34% in the EU. According to research by Deloitte, corporate board diversity is generally rising year on year, but the rate of change is slow. Greater focus is being placed on board gender diversity due to growing evidence that diverse boards lead to better decision making, improved governance, and enhanced company performance.

Some HY companies must take steps to improve gender diversity in their boards to comply with the rule.

Across 9fin EU companies, just one sector (L1), communication services, falls in line with the bloc's average. Note the data only captures companies that report gender diversity figures. As a result, the statistics may be positively biased and rates of diversity are actually lower.

As of 2023, EU broad (L1) sector laggards and leaders:

As of 2023, narrow (L2) sector laggards and leaders:

The apparel, automotive supplier, diversified technology, homebuilding and property development, and soft beverage sectors had no companies record zero women on boards. We found the paper and forest products (38%, steel (33%), and consumer services (27%) sectors had the highest proportion of boards with zero gender diversity.

Many companies report targets and efforts to increase the proportion of women in the company or in management roles, but few specify aims to improve board gender diversity.

In the paper and forest products sector, Fedrigoni, Lecta, and Progroup all have zero women on their boards. None have targets to increase board gender diversity or increase diversity in its executive leadership. All have targets to increase diversity in managerial positions.

In the steel sector, one of the three companies, Rain Carbon, has zero women on its board. The sector is highly male dominated with only 11% of Rain Group’s employees being women. It reports limited data on gender diversity and does not track metrics like the gender pay gap or have any targets related to gender diversity.

In the communication services sector, QA Group’s executive leadership team in 2023 had just 22% women and its board of directors had 0%. It has no targets to increase gender diversity in its senior leadership teams. Pure Gym does not report its executive board diversity and also lacks targets to increase diversity in leadership. PeopleCert had zero women on its board of directors in 2023, but its executive team is 40% women, in line with the rule.

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