Cyprus moved a step closer on Tuesday to requiring greater gender balance at the top of listed companies, as MPs began examining legislation under which at least 33 per cent of director positions would have to be held by the underrepresented gender. 

The bill, now before the House energy, trade, industry and tourism committee, would change not only the make-up of company boards but also how directors are chosen.

Selection procedures would have to be based on clear, neutral and objective criteria, with greater emphasis on transparency and merit in senior appointments. 

Listed companies would also face new reporting requirements. The Office of the commissioner for gender equality would monitor implementation, while companies covered by the law would have to submit an annual report setting out information on their compliance. 

The Commissioner’s office welcomed the start of the parliamentary debate, saying more balanced representation was about more than numbers. It linked the measure to equal opportunities, transparency and merit in appointments, as well as greater participation by women and men in economic decision-making. 

It also said greater balance at senior level could strengthen corporate governance, organisational performance, profitability and competitiveness. 

The legislation forms part of Cyprus’ implementation of the EU’s Women on Boards directive, which came into force in December 2022 and targets gender balance in the EU’s largest listed companies. 

The Commissioner’s office helped draft the bill alongside the Office of the commissioner for legislation and the department of registrar of companies and intellectual property at the commerce ministry. 

The bill was approved by Cabinet in July, when Gender Equality Commissioner Josie Christodoulou said it marked another step towards more equal participation by women and men in decision-making. The government said the framework was designed to combine broader representation with merit-based and transparent appointments. 

Under the EU rules, large listed companies must meet one of two targets, the underrepresented gender should account for at least 40 per cent of non-executive directors or 33 per cent of all directors, including executive and non-executive positions. Cyprus has opted for the latter. 

The deadline set by the directive for companies to meet those targets was June 30, 2026. 

The rules do not, however, mean board seats are awarded simply on the basis of gender. Companies that fall short of the target must compare candidates using clear, gender-neutral and unambiguous criteria, with suitability, competence and professional performance remaining decisive. 

Preference for the underrepresented gender applies only where candidates are equally qualified. 

Companies that miss the target must also explain why they have fallen short and what they are doing about it, while large listed firms are expected to make individual commitments to improve gender balance among executive directors. 

Member states must also provide penalties for breaches of the selection and reporting rules. These must be effective, proportionate and dissuasive and may include fines, while national law can also provide for the annulment of a contested director appointment. 

Small and medium-sized enterprises are excluded, with the rules aimed at larger companies whose shares are traded on regulated markets. 

Cyprus still has a considerable gap to close. The European Institute for Gender Equality’s 2025 Cyprus figures put women at just 11 per cent of board members in the largest listed companies, while they accounted for 26 per cent of management positions more broadly. 

That means the impact of the legislation may be felt well beyond the final boardroom numbers, forcing companies to look more closely at nomination procedures, shortlists and the criteria used to make appointments. 

The directive is a temporary measure and is due to expire on December 31, 2038, while allowing member states to retain other approaches where they can show that equally effective measures are already delivering results.