Are We Still Catching Up with Europe, or Charting Our Own Path?

While Ukraine debates the necessity of introducing gender quotas in governing bodies, Europe has already embraced them as the norm, while the U.S. is shifting its focus towards evaluating their effectiveness and exploring alternative mechanisms. So, what should we choose: following Europe's lead or developing our own model? Are we lagging so far behind that even progressive changes risk becoming outdated before they take effect?

Today, our task is not just to meet the formal requirements of European directives but to create truly effective mechanisms that ensure equal opportunities for all, regardless of gender. Two new legislative initiatives—Draft Laws No. 12198 and No. 12376—aim to reshape governance structures to ensure greater gender equality. But will they become instruments of real change or just another set of regulatory norms?

Gender Quotas: A Tool for Transparency and Fairness Ukraine follows the European "comply or explain" approach. This principle is enshrined in Directive (EU) 2022/2381, which requires companies that have not reached the 40% quota to disclose their selection procedures and criteria, ensuring transparency.

Draft Law No. 12376 also aims at ensuring fairness by establishing that candidate selection processes must be based on clear, non-discriminatory criteria. If two candidates have equal qualifications, preference is given to the underrepresented gender, except in cases where other mandatory diversity policies take precedence.

I also welcome the proposed transparency rules in both draft laws, particularly the requirement for public joint-stock companies to report annually on the gender balance among their executives to the National Securities and Stock Market Commission. This information should be publicly available on their websites.

In my opinion, introducing gender quotas, even as a form of soft regulation, combined with active implementation of ESG principles by companies, will help normalize gender balance and create significantly better opportunities for women to hold leadership positions.

A Necessary Step Toward Effective Governance Supervisory boards, as key decision-making bodies, must reflect the true balance of power and act as catalysts for change. Therefore, it is crucial that representation in supervisory boards is balanced, especially in large state corporations and organizations.

Today, we are witnessing a paradigm s Congress, where it was emphasized that modern effective governance is impossible without the inclusion of women in decision-making processes.

Draft Law No. 12198, which I co-authored, is aimed precisely at this—creating a legal framework to ensure equal representation in governing bodies.

This draft law enhances existing legislation to ensure equal rights and opportunities for both genders in supervisory boards and management bodies of state enterprises, companies with more than 50% state ownership, state banks, and municipal enterprises. It introduces temporary gender quotas requiring minimum representation of one gender in these positions. For state enterprises, the quota is set at 40%, while private joint-stock companies determine their quotas independently.

Similar initiatives have already proven their effectiveness. Gender quotas in electoral lists, which my colleagues and I advocated for and which were legally enacted, have yielded real results. In the 2020 local elections, women secured 37% of all seats in councils at various levels. This is an undeniable success!

Establishing gender balance in governance not only aligns with our European commitments and transparency standards but also fosters the development of a fairer society. Women don’t need privileges—they need equal opportunities to reach their full potential. Quotas are a temporary yet effective tool that helps create new opportunities where they have traditionally been limited.

Legislative Proposals on Gender Quotas in Governing Bodies

Currently, Ukraine lacks mandatory legislation establishing gender quotas on boards of directors. This document outlines the existing gender equality and quota regulations in Ukraine and Europe, along with a brief overview of two draft laws recently registered in the Verkhovna Rada of Ukraine.

European Experience Directive (EU) 2022/2381 (“Women on Boards”) requires large EU companies (with over 250 employees and an annual revenue exceeding €50 million) to ensure a minimum of 40% representation of the underrepresented gender in supervisory boards by 2026. Member states may impose sanctions for non-compliance.

Current Ukrainian Legislation The Law "On Ensuring Equal Rights and Opportunities for Women and Men" (2005) allows for positive actions to address gender imbalances. The National Securities Commission recommends 40% gender representation on boards of directors, but this is not mandatory. This has formed the foundation for new legislative initiatives.

New Legislative Initiatives

Draft Law No. 12198 (November 13, 2024)

Introduces temporary gender quotas for:

• State enterprises – 40%
• Private companies with state ownership – quotas set independently

Implementation phases:

• By 2026 – 20%
• By 2030 – 40% (thereafter, preference is given to the underrepresented gender)
• From 2031 – companies determine their own quotas Allows joint-stock companies to set and adjust quotas at general meetings.

Draft Law No. 12376 (January 6, 2025)

Establishes quotas for public joint-stock companies:

• Single-tier governance structure – at least 30% of the board of directors
• Two-tier governance structure – 40% in supervisory boards or executive bodies Quotas apply to companies with over 250 employees, more than €50 million in revenue, or assets exceeding €43 million. Violations may lead to court challenges of board decisions.

Effective Dates:

• From 2026
• Stock market – 1 year for adaptation
• Public joint-stock companies – 3 years Both draft laws aim to implement gender balance in Ukraine’s governing bodies in accordance with European standards.

Gender Quotas – Real Change or a Symbolic Step? Gender equality in governance is no longer just a trend—it is becoming a fundamental standard in modern business. Ukraine has the opportunity not just to catch up with Europe but to create an effective corporate governance system that incorporates the best global practices while considering its own realities.

The key question is whether these initiatives will work in practice. Implementing quotas without control mechanisms and real incentives for businesses may turn into a mere formality. However, if companies recognize the advantages of gender balance not as an obligation but as an economic driver, this could be a true breakthrough.

We no longer have time to just catch up—it’s time to set our own standards and lead the way. But are Ukrainian companies ready for this? The answer depends not only on legislation but also on the business community, which must see this as an opportunity rather than an obligation.