Luxembourg legislation on gender balance for directors of listed companies voted through Parliament

The Conseil d’Etat (State Council) granted exemption from the second constitutional vote on 19 December 2025 and the text will enter into force after it is published in the Luxembourg Official Journal.

Purpose and legal context

The text implements Directive (EU) 2022/2381 of 23 November 2022 on improving the gender balance among directors of listed companies and related measures. It will remain in force until 31 December 2038.

Which companies are covered?

The text applies to listed companies with their registered office in Luxembourg, excluding listed companies that are micro, small or medium-sized enterprises (SMEs).

“Listed company” is defined by reference to the concept of regulated market under Directive 2014/65/EU (MiFID II). In practice, this covers companies with their registered office in Luxembourg whose shares are admitted to trading on a regulated market in one or more Member States.

SMEs are defined as companies employing fewer than 250 persons and having annual turnover not exceeding EUR 50,000,000 or an annual balance sheet total not exceeding EUR 43,000,000. The Ministry of Finance indicated during Finance Committee discussions that the text should apply to approximately 30 companies in Luxembourg.

Core quantitative objective and deadline

By 30 June 2026, at least 33% of all director positions (executive and non-executive combined) must be held by the underrepresented sex. The minimum number is calculated by rounding to the nearest whole number without exceeding 49%.

Practical example: 10-director board

For a company with a 10-member board, the Annex specifies that there must be a minimum of 3 directors of the underrepresented sex (30%) to satisfy the 33% objective under the rounding rule. If a listed company currently has, for example, 8 male and 2 female directors, it needs to either replace a male director with a female director, or appoint additional female directors as required to meet the Annex threshold by 30 June 2026 (2 additional female directors, bringing the total to 4 out of 12, or 33.3%).

Comply-or-explain mechanism

If the 33% objective is not met, companies must explain why and describe the measures already taken and those planned. The legislative history confirms this is a comply-or-explain mechanism for the objective itself, consistent with the Directive – companies are not sanctioned merely for not achieving the 33% outcome (Article 3) if they comply with the process requirements (Article 4) and reporting obligations (Article 5).

Key procedural obligations

Selection process requirements (if objective not reached)

Companies that have not met the objective must adapt their director selection processes to include comparative assessment of qualifications using pre-established, clear and neutral criteria applied in a non-discriminatory way throughout the process, including vacancy notices, pre-selection, shortlist creation and reserve lists. Where candidates are equally qualified, priority must be given to the candidate of the underrepresented sex unless exceptional, objectively justified reasons favour the other candidate.

On request, companies must inform any considered candidate of the qualification criteria, the comparative assessment and any exceptional considerations applied. Where shareholders or employees vote on director appointments, voters must be properly informed of the text’s measures and possible sanctions.

If a non-selected candidate of the underrepresented sex establishes facts before a court suggesting equal qualifications, the burden shifts to the company to prove no breach of the priority rule.

Annual CSSF reporting and website publication

Listed companies must report annually to the CSSF on board gender composition (distinguishing between executive and non-executive directors) and measures taken, and publish this information on their website. The CSSF will maintain a centralised list of companies that have met the objective,  analyse and monitor compliance, and share information with the Gender Equality Observatory (l’Observatoire de l’égalité entre les genres) upon request.

Enforcement and sanctions

The CSSF can request information and issue orders to ensure compliance with selection process and reporting/publication duties.

Where a company breaches any of those duties (Articles 4 and 5), the CSSF may impose administrative measures: warnings, reprimands, public statements identifying the company and the nature of the breach, and fines ranging from EUR 250 to EUR 250,000. It may also impose daily penalty payments (up to EUR 1,250 per day; total capped at EUR 25,000) to enforce orders.

Action points for listed companies

In-house counsel and board secretaries should take the following steps:

1. Determine whether you are in scope – confirm whether your company is listed on a regulated market under MiFID II, has its registered office in Luxembourg and does not qualify as an SME under the thresholds.
2. Review current board composition – calculate whether your board meets the 33% objective for all director positions using the Annex rounding methodology. For example, a 10-director board requires at least 3 directors of the underrepresented sex by 30 June 2026.
3. Update selection procedures – review and document director selection procedures to ensure pre-established, clear and neutral criteria, comparative assessment and priority for the underrepresented sex in tie-breaks with exceptional-case justification. Establish processes to respond to candidate information requests covering criteria, comparative assessment and any exceptional considerations.
4. Prepare reporting and disclosure – establish internal processes for timely annual CSSF reporting and website publication. Map internal accountability to ensure compliance and avoid warnings, public statements, orders and fines.
5. Plan board succession if needed – if the company will not meet the 33% objective by 30 June 2026, prepare a robust comply-or-explain statement detailing reasons and concrete measures, and include it in annual CSSF reporting and website disclosure.
6. Inform voters – prepare shareholder/employee voting materials that inform voters of the new measures and potential sanctions.

Next steps and timeline

The text has been voted through Parliament and is pending publication in the Luxembourg Official Journal. Entry into force is expected by Q1 2026 following the four-day publication period. Companies should therefore begin compliance preparations immediately to meet the 30 June 2026 deadline.

Author: Dino Serafini