Ireland’s formal adoption of the European Union Gender Balance on Corporate Boards Directive in May 2025 marked a significant transition for corporate governance frameworks. The countdown to compliance is now well under way for in-scope businesses tasked with meeting new gender diversity targets ahead of a rapidly approaching deadline. Adoption also brings significant changes for Irish accountancy firms supporting in-scope clients as they adjust to the more prescriptive framework.
The new regulations implement Directive (EU) 2022/2381 into Irish law, setting clear gender representation targets for the boards of certain listed companies and outlining expectations for reporting and monitoring of leadership structures.
‘Many boards may face practical difficulties achieving the required ratios’
Representation targets
The directive applies to ‘relevant listed companies’: a tightly defined group of Irish-incorporated businesses whose shares are traded on a regulated market in at least one EU member state. SMEs with fewer than 250 employees and annual turnover below €50m, or balance sheets below €43m, are out of scope.
By June 30 2026, in-scope companies must comply with one of two specified gender balance targets:
- At least 40% of non-executive director roles must be held by members of the under-represented sex.
- At least 33% of all directors, executive and non-executive combined, must be held by members of the under-represented sex.
Companies failing to meet this target must report to the Minister for Children, Disability and Equality with reasons for the shortfall and details of measures they will take to achieve compliance. Annual reporting on performance has been set for 30 November, with first reporting due this year.
Diversity goals
Many Irish companies are making significant progress towards more balanced gender representation. Women, as the under-represented sex, now hold 42% of board seats across ISEQ 20 companies and 39% across all listed companies – figures that exceed the key targets laid down by the gender balance directive for individual organisations.
Female representation on boards of privately held companies has also grown, rising by almost 5% since 2023 and currently standing at 26%.
This progress has been supported by, among other organisations, Balance for Better Business, an independent, business-led review group established by the government to promote gender balance in senior leadership.
‘We may see companies placing greater reliance on the use of external search firms’
Its latest annual report highlights Ireland’s current ranking in the top five among all EU members for female board representation, and ninth place for representation in executive leadership teams.
Despite this progress, gender-balanced boards are still the exception, not the rule. The most recent Balance for Better Business report also found that the proportion of all-male leadership teams remains relatively high, with 23% of multinational companies reporting them, followed by 21% of privately held businesses and 16% of ISEQ 20 companies. Any such boards falling in scope of the directive are likely to have a significantly more challenging task ahead of them when it comes to achieving compliance.
Readiness gaps
‘Some organisations are saying they are having difficulty preparing within the available timeframe, especially where board cycles and recruitment processes traditionally take longer to shift composition of the board, and where the board succession plan needs to be taken into account,’ observes Jillian O’Sullivan, corporate compliance and governance lead at Grant Thornton Ireland, as the June deadline approaches.
‘Many boards may face practical difficulties achieving the required ratios. Challenges include small board sizes, where a single appointment significantly shifts ratios, and limited near-term turnover. There might also be a narrow pipeline of potential candidates meeting both gender objectives and the required skills or experience appropriate for the industry, or the skills they need on the board,’ she adds.
‘Companies need to look at their current terms of reference for the nomination committees’
Looking ahead, O’Sullivan sees a more far-reaching impact on board recruitment practices. ‘I think nomination committees will need to redesign procedures so they are auditable, standardised and defensible – a shift away from the longstanding informal practices that companies have been used to,’ she says. ‘I would expect to see enhanced governance documentation, including written procedures for selection and evaluation of board positions. And we may see companies placing greater reliance on the use of external search firms who can meet audit-ready criteria, as well as a more frequent skills-matrix review and succession planning.
‘This will all make board recruitment processes more rigorous, rules-driven and transparent, mirroring practices already seen in some regulated industries.’
Advisory support
For accountants, the emphasis will be on offering more focused guidance around board composition, reporting obligations and long-term governance planning as organisations navigate the transitional period towards compliance and reporting.
‘The new regulations are taking away the flexibility around diversity that companies may have felt they previously had within their board composition,’ O’Sullivan says. ‘As advisers, we should be helping our clients assess whether they are in scope for reporting, and if in scope conduct a baseline assessment of the current board composition.
Companies will also need to look at their current terms of reference for nomination committees and at protocols used for board recruitment. ‘This will include assessing any corporate governance frameworks to ensure effective, ongoing monitoring of the board gender composition and their succession plan to ensure it supports a pool of suitable candidates,’ O’Sullivan says, adding: ‘Their first reporting date in November will come around very quickly.’
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