New gender-balance law for Luxembourg-listed company boards

If the target is not met, companies must revise their nomination procedures, formalize objective selection criteria, and give priority to equally qualified candidates of the under-represented sex. Listed companies should therefore move quickly to map current board composition and revisit nomination procedures.

On December 16, 2025, the Luxembourg Parliament adopted draft bill 8519, establishing a binding gender-balance regime for listed companies incorporated in Luxembourg (the "Law"). The Law—which transposes EU Directive 2022/2381—requires that, by June 30, 2026, at least 33% of board seats in in-scope companies are to be held by the under-represented sex. The legislation goes beyond a simple quota. It sets forth robust requirements for board member selection, mandates annual reporting to the CSSF, and imposes public disclosure and obligations. A graduated system of sanctions will apply in cases of noncompliance. The Law will enter into force on the fourth day following its publication in the Luxembourg Official Journal and will remain applicable until December 31, 2038.

This e-alert provides a comprehensive overview of the new requirements, the companies in scope, the practical implications for board composition and selection processes, and the sanctions for noncompliance.

1. Who is in scope?

The Law will apply to all companies with their registered office in Luxembourg whose shares are admitted to trading on a regulated market in one or more EU member states. This includes investment funds constituted as companies where their shares are admitted to trading on an EU regulated market. In such cases, the Law will apply to the fund’s managing body (referred to as “board” hereafter) (both executive and non‑executive directors or managing members), in the same way as for any other listed Luxembourg company.

Importantly, the Law will not apply to small, and medium-sized enterprises (SMEs) (i.e., companies with fewer than 250 employees and either an annual turnover not exceeding EUR50 million or a balance sheet total not exceeding EUR43m) and to unlisted companies.

2. Board diversity target: 33% by June 30, 2026

By June 30, 2026, at least 33% of all board positions in listed companies must be held by members of the underrepresented sex. This requirement applies to both executive and non-executive directors.

The Law provides detailed guidance on how this percentage is to be calculated.

In-scope companies that fail to reach this target will have to:

• adapt their director selection process, using clear, neutral, and pre-established criteria
• give priority, in cases of equal qualification, to candidates of the under-represented sex, unless objective reasons justify another choice
• upon request, provide unsuccessful candidates with the selection criteria and comparative assessment used, as well as any specific reasons for not selecting a candidate of the under-represented sex
• ensure that stakeholders or employee voters are informed of the legal requirements and potential sanctions.

3. Transparency and accountability: annual reporting obligations

In-scope companies will have to:

• report annually to the Commission de Surveillance du Secteur Financier (CSSF) on the gender composition of their boards, including the distinction between executive directors and non-executive directors, and the measures taken to achieve the required balance
• publish this information on the company’s website in a manner that is easily accessible
• where a company has not yet met the 33% threshold, include in its annual report a detailed explanation of the reasons for noncompliance and a description of the steps being taken to address the gap.

With the aim of encouraging, the CSSF, in turn, will publish and regularly update a list of companies that have achieved the target, providing public visibility and recognition for compliant companies.

4. Sanctions

The CSSF is empowered to enforce compliance through a graduated system of sanctions, including warnings, reprimands, public statements, daily penalty payments (up to EUR1,250 per day, capped at EUR25,000), and financial penalties ranging from EUR250 to EUR250,000.

5. What should in-scope companies do now?

In light of the new requirements, it is recommended that in-scope companies:

• take immediate action to assess their current board composition to identify any gaps relative to the 33% target
• review their existing nomination and selection procedures, with a focus on ensuring that all processes are transparent, merit-based, and free from bias
• document their selection criteria in advance and ensure that all relevant stakeholders, including nomination committees, HR teams, and board members, are fully informed of the new legal obligations.