Luxembourg is entering a pivotal phase in its journey toward gender equality, driven by two strategic EU directives: the Women on Boards Directive and the Pay Transparency Directive. These legislative instruments are reshaping corporate governance and remuneration practices across the EU, setting new standards for equality and inclusion.
The Women on Boards Directive requires listed companies to ensure that at least 40% of nonexecutive director positions — or 33% of all board positions — are held by members of the underrepresented gender. Luxembourg has already taken the lead by publishing a bill to transpose this directive, requiring at least 33% of board positions to be held by the underrepresented gender. The bill introduces transparent, gender-neutral selection procedures, annual public reporting obligations on board composition and progress toward targets.
This is more than a symbolic gesture. It is a structural shift to embed gender balance into corporate DNA and make leadership reflect the evolving dynamics of today’s workforce and society.
Complementing the governance reform, the Pay Transparency Directive will redefine how companies – whatever the headcount – approach remuneration to achieve gender pay equality. It mandates employers to include the salary range in job postings, bans questions about candidates’ pay history, and requires job classification systems based on objective and gender-neutral criteria. Employees will have the right to request information on pay levels and gender pay gaps, and companies with 100 or more employees will face public reporting duties. While pay inequality was historically difficult to prove, the directive gives the tools for more efficient legal actions. In Luxembourg, where the gender pay gap is most pronounced at senior levels, the directive is expected to have a particularly significant impact.
While the Women on Boards Directive is already in the legislative pipeline, the Pay Transparency Directive demands immediate strategic planning. Employers must begin auditing pay structures and practices, reviewing decision-making processes and preparing for increased scrutiny from employees, regulators and the public.
For Luxembourg’s business community, this is not just about ticking compliance boxes — it is a reputational imperative. Companies that embrace these changes early will not only mitigate legal risks but also position themselves as employers of choice in a competitive talent market. Luxembourg can lead by example and shape a corporate culture where women are not just present — but fully empowered to succeed.
With June 2026 set as the compliance deadline for both directives, the clock is ticking. The time to prepare is now.
This article was published in the 6th edition of Forbes Luxembourg magazine.
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