Netherlands: large companies will have to meet a quota of women on their boards from 1 January 2022

The Diversity Quota and Targets Act (Wet ingroeiquotum en streefcijfers), which was ratified by the Dutch senate in September of this year, is set to come into force on 1 January 2022. The new law aims to improve diversity at the helms of public and private limited companies in the Netherlands. The text introduces quotas whereby the members of listed company supervisory boards must be at least one third female and one third male, and any appointment that does not contribute to achieving this balance will be overturned. If the number of supervisory board members is not divisible by three, then the next highest number divisible by three will be used to determine the gender ratio. In addition, companies with 250 employees or more, with assets in excess of €20 million and net revenues above €40 million, will have to set “appropriate and ambitious targets” for achieving a better gender balance in management and report annually on their progress. They will have to disclose the following to Social and Economic Council of the Netherlands (SER): the number of men and women on their board of directors and supervisory board as well as in management positions, their targets and their action plan to achieve equality.