The European Parliament has adopted a new law setting targets for gender balance on corporate boards.

The EU law means that by 2026, companies will need to have 40% of the underrepresented sex among non-executive directors or 33% among all directors.

The directive aims to ensure that gender balance in corporate boards of large listed EU companies is established across the EU and that appointments to board positions are transparent. It also sets out that candidates for board positions are assessed objectively based on their individual merits, irrespective of gender.

The proposal was first tabled by the Commission 10 years ago and although the European Parliament adopted its position in 2013, the council could not reach an agreement with some member states that had considered that binding measures at the EU level were not the best way forward.

The directive will enter into force 20 days after publication and member states will have two years to transpose its provisions into national law.

In a statement, European Commission President Ursula von der Leyen described the law as “a long-awaited moment, a moment to be celebrated as a breakthrough in gender equality.”