How to improve board diversity in tech companies: navigating Europe’s new mandate

Who does the 40% mandate apply to?

The directive applies to large listed companies across EU member states, and the size requirements are for businesses with more than 250 employees and annual revenues exceeding EUR 50 million.

It introduces:

• Transparent selection criteria for board appointments
• Reporting obligations on gender representation
• Enforcement mechanisms at the national level

For late-stage companies preparing to list, this effectively becomes part of your IPO checklist.

Why this matters for late-stage companies

Many late-stage companies delay board expansion or formalisation until closer to IPO. That strategy is now risky.

Key implications:

Board composition needs to be planned early

You can’t retrofit diversity at the last minute without compromising quality or governance standards.

Talent pipelines must widen

Relying on existing networks often leads to homogeneous boards. Companies will need to proactively source diverse candidates.

Governance scrutiny is increasing

Regulators, institutional investors, and public markets are aligning around diversity as a governance signal.

How tech companies can improve board diversity

Many public tech companies already demonstrate what’s achievable ahead of the mandate. Bumble leads by example, with women making up 70% or more of its board. European fintechs Wise and Adyen have both achieved close to 50% gender balance at board level, demonstrating that tech companies can meet and exceed the incoming requirements without sacrificing board quality.

To stay ahead of evolving regulations and strengthen long-term governance, late-stage private tech companies should take proactive steps to improve diversity at board level.

Assess current landscape

It’s worth noting that while this article focuses on the EU’s legislation on gender diversity, there are many other categories of diversity to consider, and the practices below apply to the recruitment of any underrepresented group.

Broaden recruitment efforts

Broaden recruitment efforts beyond traditional networks to access a wider and more diverse pool of candidates.

Partnering with an executive search firm can help organisations identify and engage qualified candidates who may not be easily reached through internal networks or conventional recruitment channels. At Erevena, we take a tailored approach to every client search and have extensive experience presenting diverse candidate options in many recruitment processes.

Implement fair and structured selection processes

Use structured evaluation frameworks and unbiased assessment methods during board selection to reduce subjectivity and bias, and support fair decision-making.

Develop mentorship and leadership pathways

Create mentorship, sponsorship, and leadership development programmes that support underrepresented talent in progressing towards senior leadership and board-level roles.

Monitor and improve diversity outcomes

Regularly track, report, and assess diversity metrics in board recruitment to measure progress and identify areas for continued improvement.

Evolution of diversity on board of directors

Looking back at the progression of diversity on board of directors, the data shows clear momentum across Europe, although progress has been uneven between countries and sectors.

Over the past decade, female representation on corporate boards has steadily increased. According to our own 2023 Board Survey, 31% of startups reported having no women on their board, while only 10% of board members came from ethnically diverse backgrounds. These findings suggest that many startups may be overlooking an important aspect of board composition that could create challenges as they grow and scale.

This report also highlights that, as of 2023, there has been a move to slightly more female Chairs – it’s still slow progress but a bigger shift than the year before, with an increase from 2% in 2019 to 3% in 2021 and 8% in 2023. The pace of change varies significantly depending on national policy frameworks. Countries with binding quotas have consistently seen the fastest and most sustained improvements in gender balance at board level. France is often highlighted as a leading example, with female representation on CAC 40 boards reaching approximately 44% to 46%, placing it among the strongest performers globally.

This contrast between quota-driven markets and voluntary approaches highlights a key takeaway: while progress is happening across Europe, policy intervention and governance requirements remain powerful accelerators for improving board-level diversity.

Europe’s broader mission to diversify boards

The directive is part of a broader European effort to improve gender balance and strengthen representation in corporate leadership across the region. This policy direction reflects a growing recognition that more diverse leadership teams contribute to better governance, decision-making, and long-term business performance.

Several organisations and initiatives are actively supporting and accelerating this shift by advocating for gender equality, influencing policy, and helping companies build more inclusive leadership pipelines.

One of the key EU-level frameworks is the European Commission’s wider gender equality strategy, which underpins much of the regulatory direction in this space and promotes equal representation across economic and corporate leadership roles.

Alongside this, several influential organisations are driving change across Europe and the UK:

• The Alliance for Gender Equality in Europe, supported by the European Commission, plays a central role in advancing gender equality policy and promoting balanced representation across leadership positions.
• The WISE Campaign (UK/Europe) advocates for stronger female representation in senior leadership and board-level roles, while supporting organisations in improving inclusion practices.
• European Women on Boards (EWOB) works across Europe to improve gender balance at board level through research, advocacy, and corporate engagement. They have been one of the strongest advocates on this, partnering with legal and policy experts to support implementation across member states.

Together, these organisations and initiatives are helping shape expectations around corporate governance and encouraging companies to take more structured and accountable approaches to improving gender diversity at the highest levels of leadership.

Country spotlight:

France

France is widely seen as a leader in board diversity compliance. Thanks to early quota legislation (Copé-Zimmermann law), many large companies already exceed 40% female representation on boards. Compliance is high, and the market has largely normalised gender-balanced boards.

Sweden

Sweden has strong board representation despite no binding quota. Cultural emphasis on equality, combined with investor pressure, has driven relatively high female participation at the board level – though still slightly below France’s levels.

Switzerland

Switzerland has taken a notably different approach to board diversity than many of its European neighbours. Rather than imposing binding quotas with financial penalties, the country introduced gender representation targets through reforms to its Corporate Law that came into force in 2021.

Under the legislation, large publicly listed companies are expected to achieve at least 30% female representation on boards of directors and 20% female representation on executive management teams. However, Switzerland adopted a “comply or explain” model: companies that fail to meet these targets are not fined but must publicly disclose the reasons for non-compliance and outline the measures they are taking to improve gender representation.

Finland

The share of female executives in Finland decreased in 2024: only 37.7% of executives are women (EVA’s Glass Ceiling Meter 2024). A year earlier, the figure was 38.4%. The drop is small, but it does raise the question of whether more can be done. In Sweden, the corresponding share is already over 44%, meaning Finland has clearly lagged behind, even though the education and labour market structures are nearly identical. The problem is not in education, but in career paths and structures.

Board diversity metrics: what should tech companies track?

Many tech boards set diversity intentions but lack a consistent framework for accountability. It’s worth looking at your current board composition as well as running through this framework for future board hires.

1. Demographic Composition

Take a look at the baseline for your current composition and candidate breakdown for future board hires. Track gender, ethnicity, age range, and – where voluntarily disclosed and legally permissible in the relevant country – disability status and sexual orientation.

2. Pipeline Diversity

Ask how diverse the candidate slate is before a hire is made. Track the ratio of diverse candidates presented at longlisting, shortlisting, and the final stage. This exposes where drop-off happens – in sourcing, in screening, or at the board level – and is where executive search firms can be held accountable.

3. Tenure and Refreshment Rate

Long-serving boards naturally limit diversity progress. Track average NED tenure and how frequently seats turn over. A board that never refreshes is a board that never diversifies.

4. Skills Matrix vs Diversity Overlap

Diversity of background and skill set. Track whether diverse candidates are being brought in for genuine strategic value or siloed into specific “diversity roles” (e.g. always a Chief People Officer, never a CFO or tech leader).

Investor perspectives: Why push for female-dominant boards?

Investors are no longer treating board composition as a box-ticking exercise; instead, they increasingly view diversity as closely tied to performance, governance quality, and risk oversight.

Diversity as a governance signal

A well-composed board is often interpreted as a marker of stronger oversight, wider cognitive range, and a reduced risk of groupthink in strategic decision-making.

IPO readiness benchmark

For late-stage companies, board structure is coming under sharper scrutiny during pre-IPO diligence, particularly considering evolving regulatory expectations – making early attention to composition increasingly important rather than a last-minute requirement.

Capital allocation influence

Some institutional investors are already factoring board diversity into voting decisions, including opposing boards that fall short of their expectations on representation and balance.

What should late-stage companies do now?

If you’re approaching the IPO stage, consider:

• Auditing your current board composition against 2026 requirements
• Building a forward-looking board succession plan
• Expanding your search networks beyond traditional circles
• Engaging investors early on governance strategy

How to find diverse board members

Partnering with an executive search firm that prioritises diversity, equity, and inclusion in technology leadership hiring can help you build a stronger, more representative leadership team.

The 2026 mandate goes beyond representation; it signals a broader shift toward modernised governance across Europe. For late-stage companies, the real question isn’t whether these expectations apply – it’s whether you’re acting early enough to turn them into a strategic advantage.

An executive search firm that embeds diversity, equity, and inclusion into its approach to tech leadership hiring can accelerate both compliance and long-term value creation.

Recent placements by Erevena highlight how a deliberate, forward-looking search strategy can translate these priorities into tangible leadership outcomes.

To speak about this in more detail, feel free to reach out to us here.