Gender diversity within the board

2023 marks the first year in which companies that qualify as large for annual financial reporting purposes are obliged to report on gender diversity within the board as well as with regards to lower tier executives. The portal for annual reporting on gender diversity to the Dutch Social and economic council (‘’SER’’) opened in late January 2023.

This article provides a brief overview of legislation on gender diversity as well as an analysis of the requirements under said legislation.

The legislation discussed in this article applies to both the NV (section 2:166 of the Dutch Commercial Code (‘’DCC’’)) and the BV (section 2:276 DCC). Since the wording of both sections is identical, this article will solely refer to the provisions intended for the BV. This article does not discuss the provisions for the diversity quotum as meant in section 2:142 DCC.

Section 2:276 DCC contains mandatory requirements on improving gender balance for the board of directors, the supervisory board and other (categories of) employees (lower tier executives) designated by the company. Section 2:276 (1) DCC states that it applies to a company that on two consecutive balance sheet dates qualifies as “large” in the meaning of section 2:397 DCC.

Pursuant to 2:276 (2) DCC a company sets appropriate and ambitious goals in the form of a target figure to provide for a more balanced ratio of male and female members in the board of directors and supervisory board. The company must do the same for categories of employees in executive positions to be determined by the company. According to the explanatory memorandum by the legislator on section 2:276 (2) DCC an “appropriate” target figure means that the target figure is appropriate to the size of the board as well as the current male / female board member ratio. According to this memorandum, “ambitious” means that the target figure must represent an improvement to the current ratio. The latter means that the target figure cannot be “zero”. A board currently consisting of only male board members should therefore strive for the appointment of at least one female board member.

Pursuant to 2:276 (3) DCC the company also determines a plan describing the way in which it intends to reach the goals set in accordance with (2). According to the explanatory memorandum, the plan could (for instance) detail a(n) (amended) recruitment profile, a transparent recruitment process and provide an explanation on its preferential policy.

To account for the progress, the company reports to the SER pursuant to 2:276 (4) DCC within ten months after the financial year on (i) the number of male and female board  / executive members  at the end of said financial year (ii) the gender balance goals in the form of a target figure, the plan on how the company intends to reach said goals and if one or more of these goals were not met, the reasons therefor.

Section 2:276 DCC first applies to the financial year that ends on 31 December 2022 (or later, in the event of a financial year that does not run parallel to the calendar year). Companies must therefore report within 10 months after the end of this financial year (before 31 October 2023 if the financial year ended on 31 December 2022).

Pursuant to section 3d of the Management report decree (Besluit inhoud bestuursverslag), a large company is obligated include the information as provided in its yearly report to SER in its management report (to the annual accounts), starting with the management report to the annual accounts of 2022.

Companies to which section 2:276 DCC applies should have received a letter from SER in January 2023 with the invitation to file the report discussed above. SER provides a checklist on its website for further guidance on what information is necessary to properly fill out the report. After expiry of the deadline for reporting, the SER will publish all reports in its portal.

Over de auteur(s)

Thomas Jansen | Windt Le Grand Leeuwenburgh