EU increases pressure: Cyprus risks sanctions due to gender balance in companies

The European Commission has sent Cyprus a formal reasoned opinion — the second stage of an infringement procedure related to the delayed implementation of the directive on gender balance on the boards of large companies. Similar notifications were received by eight other EU countries.

As noted, Cyprus did not complete the transposition of the provisions of EU Directive 2022/2381 into national legislation by the set deadline of December 28, 2024. The authorities now have two months to address the shortcomings. Otherwise, the case may be referred to the Court of Justice of the EU, risking financial sanctions.

The Directive sets specific targets: at least 40% of the underrepresented sex (most often women) among non-executive directors or at least 33% among all board members. These targets must be achieved by June 30, 2026. The need for transparent candidate selection procedures is also emphasized.

Brussels believes that equal representation in corporate governance is an important part of the strategy for gender equality and sustainable economic development.

For Cyprus, the issue is particularly relevant. According to data from European institutions, the country remains among the laggards in terms of gender equality indicators, including women's participation in corporate management.

In the near future, the government will need to accelerate legislative changes and notify the European Commission of their implementation to avoid further escalation of the situation and possible punitive measures.