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Although slowed down by the current political turmoil, regulatory activity has not come to a complete standstill, and in particular led to the adoption of an ordinance on October 15, 2024, on a subject that sparked off fierce controversy some fifteen years ago. Transposing the Women on Boards Directive of November 23, 2022 , this ordinance, as its title suggests, aims to increase the number of women on the boards of major companies.
For once, it may come as a surprise that France has any new obligations in this area. Indeed, since the so-called Copé-Zimmermann Act of January 27, 2011, listed companies as well as the largest SAs, SCAs and SEs have been subject to a mandatory minimum quota of 40% of each gender on their collegiate management or supervisory bodies. In 2024, women accounted for 46.7% of the members of the boards of directors or supervisory boards of CAC 40 companies, and 46.4% of those of the equivalent bodies of SBF 120 companies, so that the parity objective has been fully achieved.
This binding but effective approach was not, however, favored by a number of EU member states, who preferred to stick to spontaneous changes in practices, which were nevertheless slow to materialize. It was against this backdrop that the Women on Boards Directive finally came into being, extending to the whole of the EU the French method of mandatory gender quotas laid down by law. More precisely, the directive offers an alternative to Member States, allowing them to choose between a 40% quota for directors and a 33% quota for managers in the broad sense of the term.
Unsurprisingly, France chose the first of these two options, as its legislation already complied with the corresponding requirement. In the end, therefore, the Ordinance only marginally modified the system to incorporate the gender diversity requirement more fully.
It should be made clear from the outset that the scope of application has not been altered by the Ordinance. In other words, the companies subject to the quotas remain so, covering on the one hand (i) listed companies, whatever their size or corporate form, and on the other (ii) companies exceeding the cumulative thresholds of 250 employees and 50 million euros in annual sales or balance sheet total over a three-year period, whereas the directive only applies to listed companies of a certain size: in short, even though the French authorities claim to be fighting fiercely against these assumptions, this is a form of over-transposition of the directive. Conversely, the ordinance in no way extends the quota obligation to companies not previously subject to it. This is particularly true of SASs, which often have management bodies and are sometimes large in size, but which remain exempt from any form of constraint on this point due to their form.
As for the new measures, they do not relate to the quotas themselves, which are already required by law. Essentially, the ordinance extends the system to certain directors who were previously excluded from it, namely directors representing employees (ARS) and directors representing employee shareholders (ARSA). In practical terms, as they are elected or appointed according to specific procedures, ARS will constitute a distinct college, so that the 40% quota will have to be assessed separately, depending on the appointment procedures, and bearing in mind that directors form a college with a reduced number of members, from one to five. As for the ARSA insofar as they are appointed by the Annual General Meeting in the same way as the other directors, they will be included in the college of directors under ordinary law for the purposes of applying the quota. It should also be noted that these new rules are extended to commercial companies in which the French State holds a stake.
In addition, and this time concerning listed companies only, it should be noted that, in accordance with the "comply or explain" principle, these companies will have to specify in their corporate governance report the measures taken or to be taken to meet this obligation of balance within the company's management bodies, and publish this information on the company's website, while communicating it to an authority yet to be designated by decree. Moreover, if the company's management is organized around a Management Board and a Supervisory Board, the Supervisory Board will set quantitative targets for the Management Board, with a view to improving the gender balance of its members, in accordance with procedures to be specified by decree. This constraint, which is specific to companies with a dual management structure, is unlikely to reverse the trend towards this type of management, which is currently losing ground.
On this point, a distinction needs to be made according to the companies concerned, with two scenarios to be considered.
On the one hand, companies subject to the directive, i.e. those (i) listed (ii) with more than 250 employees and (iii) with sales of 50 million euros and/or a balance sheet total of 43 million euros, must comply with the new rules by June 30, 2026, to take account of the directive's requirements. As a result, it is imperative that the deliberations relating to the modifications to the articles of association induced by the ordinance - insofar as these modifications are genuinely required - take place during the year 2025, taking into account the terms of an application decree still to come, especially for the implementation of the obligation of balanced representation within the framework of the specific college of ARS.
On the other hand, companies outside the scope of the directive, i.e. (i) small listed companies and (ii) large unlisted companies, will benefit from an additional delay, since the new rules will apply to them from January 1, 2027.
