Luxembourg’s new Law of 19 December 2025 on setting a quantitative target for gender balance among directors of listed companies (New Law) introduces binding gender balance requirements for boards of listed companies, aligning with EU Directive 2022/2381. The New Law entered into force on 23 December 2025, shall apply as of 30 June 2026 and will remain effective until 31 December 2038.
1. Why Gender Balance? The policy rationale
Although gender balance has proven benefits for companies and the economy as a whole, and despite existing EU laws prohibiting sex discrimination and initiatives promoting self-regulation, statistics show that (i) women remain significantly underrepresented in the highest corporate decision-making bodies across the Union and (ii) voluntary ways of increasing gender balance have not yet dominated the EU markets. The New Law implements EU Directive 2022/2381 on Women on Boards, creating binding targets for Luxembourg companies.
2. Who is affected?
The New Law applies to companies having their registered office in Luxembourg the shares of wich are listed on one or several EU-regulated markets. Small and medium-sized companies - defined as companies that employ fewer than 250 people and whose annual turnover does not exceed EUR50 million or whose total annual balance sheet does not exceed EUR43 million - are excluded from the scope of the New Law.
3.What are the new obligations and consequences?
- Minimum gender representation. By 30 June 2026, at least 33% of board seats (executive and non-executive) must be held by the underrepresented gender. The New Law provides a table for the minimum number of seats required, depending on board size.
- Transparent selection and priority rules. Board appointments must use transparent, neutral, and pre-established criteria. Where candidates are equally qualified, preference must be given to the underrepresented gender, unless objective, non-discriminatory reasons justify otherwise. Candidates may request information on selection criteria and decisions.
- Reporting and transparency. Annual reporting to the Luxembourg financial supervisory authority (CSSF) on board composition and compliance actions is mandatory. Companies must publish such information on their website. Based on this reporting, the CSSF will maintain a public list of compliant companies. Non-compliant companies must explain their shortfall and planned corrective measures.
- The CSSF is empowered to monitor compliance and impose sanctions, including warnings, reprimands, public statements, and fines up to EUR250,000, with possible daily penalties for ongoing non-compliance. Decisions can be appealed before the Luxembourg Administrative Tribunal within one month.
4. Comparative insights
Setting legal quotas for gender balance might be only a first step, followed by other measures. As a potential benchmark, Norway has long been a leader in gender balance regulation. Since January 2024, Norwegian law requires medium and large companies to have at least 40% representation of each gender on their boards, with phased implementation until June 2028. These rules apply to both Norwegian and foreign companies operating in Norway. Notably the Norwegian regulation started with a regulation similar to the New Law and now covers most corporations present in Norway, no longer limited to public companies. The Norwegian experience shows that legal quotas can drive change especially if organizational culture and leadership commitment are following.
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