Further to the adoption of the Women on Boards / Gender Balance on Corporate Boards Directive, the Malta Financial Services Authority (MFSA) introduced Chapter 13 to the Capital Markets Rules, which came into force on 28 December 2024. This chapter implements the Gender Balance on Corporate Boards Directive, and applies to equity issuers that are not SME’s, that is, equity issuers that have at least 250 employees and meet one of the following criteria: (i) annual turnover of at least €50 million or (ii) annual balance sheet total of at least €43 million.
By 30 June 2026, such equity issuers must ensure that at least 40% of non-executive board positions are held by the underrepresented sex, or that the underrepresented sex accounts for at least 33% of all director positions, whether executive or non-executive. Furthermore, companies that do not meet the 33% target are required to set individual quantitative goals to improve gender balance amongst executive directors, which goal they should aim to meet by 30 June 2026.
Listed companies that do not achieve either of the two targets shall adjust their candidate selection procedures with respect to the appointment or election of directors on the basis of clear, neutrally formulated and unambiguous criteria which should be established in advance of the selection process.
In any case, in-scope companies shall ensure that, in case of candidates who are equally qualified in terms of suitability, competence and professional performance, priority is given to the candidate of the underrepresented sex unless, in exceptional cases, reasons of greater legal weight, examples of which are set out in the Rules, tilt the balance in favour of the candidate of the other sex.
In view of the June 2026 deadline, equity issuers need to start planning for this immediately.
In scope companies shall also be subject to certain disclosure and reporting requirements, including:
Providing the competent authority, at least once a year, with information with respect to gender representation on their boards;
Publishing this information on their website;
Including this information in their Corporate Governance Statement; and
Where either of the targets have not been reached, this information should include the reasons behind this failure, together with the measures taken or to be taken to achieve the stipulated objective.
The MFSA will also be annually publishing a list of the companies that have achieved either of the above-mentioned targets.
Separately, the National Commission for the Promotion of Equality for Men and Women will be assigned the role of promoting, analysing, monitoring and supporting gender balance on boards of listed companies, once the recently published Promotion of Gender Balance among Directors of Listed Companies Regulations, 2024 come into force. As part of this role, the Commission will compile a yearly report on the implementation of the Women on Boards directive by listed companies in Malta.
The updated Capital Markets Rules may be accessed here. For more information on Chapter 13, one may also refer to the MFSA’s Circular that was published on the matter.
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