The G20/OECD Principles of Corporate Governance recommend that the corporate governance framework ensure the strategic guidance of the company by the board and its accountability to the company and the shareholders. Chapter 4 provides information on regulatory frameworks for board structures, board independence and board-level committees, including audit, remuneration, nomination and specialised committees, as well as risk management and implementation of internal controls. It also includes a section on auditor independence, accountability and oversight, covering audit firm and audit partner rotation. The chapter also covers board nomination and election, board and key executive remuneration and gender diversity on boards and in senior management.
OECD Corporate Governance Factbook 2025
Abstract
One-tier board structures are favoured in 24 jurisdictions, while 7 favour two-tier boards. A growing number (18 jurisdictions) allow both structures, and 3 have adopted hybrid systems. A minimum board size is most commonly set at three members and the maximum term of office for board members is typically three years.
Twenty-four Factbook jurisdictions have one‑tier boards, whereby executive and non-executive board members may be brought together in a unitary board system. Seven jurisdictions have two‑tier boards that separate supervisory and management functions. In such systems, the supervisory board typically comprises non-executive board members, while the management board is composed entirely of executives. China revised its Company Law in 2023 to shift from a two-tier to a one-tier system for listed companies. Under the new framework, listed companies are required to establish a board audit committee, replacing the supervisory board. Eighteen countries allow both one-tier and two‑tier boards. In addition, Italy, Japan and Portugal have hybrid systems that permit three options and provide for an additional statutory body mainly for audit purposes (Table 4.2, Table 4.3, Table 4.4, Table 4.5).
While 48 jurisdictions require or recommend a minimum board size, which is most commonly set at three members, only 13 jurisdictions place limits on the maximum size of boards, ranging from 5 in Brazil to 21 in Croatia and Mexico (Table 4.6). The maximum term of office for board members is set in all but nine jurisdictions, most commonly at three years. Annual re‑election for all board members is required or recommended in seven jurisdictions (Table 4.1). France recommends that the terms of office of the board members be staggered. In Hong Kong (China), each director is subject to retirement from office by rotation at least once every three years.
Note: Country names shown in black text denote law or regulations in place, and blue italic denotes the use of codes. The table refers to both one‑tier and two‑tier boards, with requirements for 2‑tier boards applying to the supervisory board. “Japan (C), (S) and (A)” denote a three committees model, an audit and supervisory committee model and a statutory auditors model respectively. See for Table 4.6 data.
4.1.1. Independence of the board
The most common requirements for a minimum number or ratio of independent directors are for two to three board members (13 jurisdictions) or at least a third of the board (9 jurisdictions), while the most common recommendation is for boards to be composed of at least 50% of independent directors (20 jurisdictions). Over the past decade, there has been a significant increase in frameworks that require or recommend board independence, particularly regarding the separation of the roles of CEO and board chair, independence from substantial shareholders, and maximum tenure limits for independent directors.
All but two jurisdictions (Luxembourg and the Slovak Republic) require or recommend a minimum number or ratio of independent directors. Six jurisdictions (Hungary, India, Korea, Portugal, South Africa, the United States) have established binding requirements for 50% or more of independent board members for at least some companies. By contrast, a much larger group of 20 jurisdictions have established code recommendations for a majority of the board to be independent on a “comply or explain” basis (Table 4.7, Figure 4.1). Nine countries have at least two standards, which set a mandated minimum requirement for independent board members usually coupled with a more ambitious voluntary recommendation. Given these provisions for promoting independent directors, it is also relevant to support their professional development and ensure that they possess the skills and competencies essential for good corporate governance.
Six jurisdictions link board independence requirements or recommendations with the ownership structure of a company (Table 4.8). In three of these (France, Israel, the United States), companies with more concentrated ownership are subject to less stringent requirements or recommendations. The role of independent directors in controlled companies differs from their role in companies where ownership is dispersed, since the nature of the agency problem is different (i.e. in controlled companies, the vertical agency problem between ownership and management may be less acute and the horizontal agency problem involving controlling and minority shareholders more apparent). In addition, many jurisdictions have established specific provisions to help ensure that minority shareholders have the possibility to elect at least one director in companies with controlling shareholders, as detailed in Table 4.16.
Note: While filled circles denote law, regulations or listing rules, empty circles denote codes. Portugal’s (BoD) and (SB) denote board of directors and supervisory board. The United States requirement applies to listed companies without a controlling majority. See Table 4.7 for data.
One-third of jurisdictions with a one‑tier board system require the separation of the functions of board chair and CEO, and an additional 38% encourage it through code recommendations. These figures represent a significant increase from 2014, when 13% of jurisdictions had a requirement and 25% had a recommendation. India and Singapore encourage the separation of the two functions through an incentive mechanism that requires a higher minimum ratio of independent directors (50% instead of 33%) (Figure 4.2). In total, 76% of jurisdictions either require or encourage the separation of the roles of CEO and board chair, up from 44% in 2014. For two‑tier board systems, the separation of the functions is assumed to be required as part of the usual supervisory board and management board structure.
Note: Based on data from jurisdictions that adopt one-tier board systems or allow an option between one-tier and two-tier systems. They are of 32 jurisdictions in 2014 and 42 in 2024. The two jurisdictions denoted as “Incentive mechanism” set forth a higher minimum ratio of independent directors on boards when the chair is also the CEO. See Table 4.7 for data.
National approaches to defining the independence of independent directors vary considerably. Many jurisdictions also establish a maximum tenure for board members to be considered independent. Most jurisdictions (89%) have now established requirements defining the independence of directors in relation to substantial shareholders, a significant increase from 64% in 2014. However, the threshold for substantial shareholding varies widely from 1% to 50%, with 10‑15% being the most common share (Figure 4.3).
Note: Based on data for 41 jurisdictions in 2014 and 52 jurisdictions in 2024. See Table 4.7 for data.
There are also significant differences in the maximum tenure board members may serve before no longer being considered independent. Sixty-three percent of the jurisdictions set a maximum tenure for independent directors, up from 51% in 2014. The maximum tenure ranges from 3 to 12 years, with 12 years being the most common length, followed by 9 years. Of 52 Factbook jurisdictions, just over half of the jurisdictions require or recommend that directors no longer be considered as independent at the end of the specified period, and 10% require that an explanation be provided regarding their independence (Figure 4.4).
Eleven European countries and China have established legal requirements regarding the minimum share of employee representation on the board, which varies from one to half of board members, with one‑third being the most common share. In Denmark and Sweden, there is no requirement for employee board representation, but there is a statutory right for employees to appoint two to three representatives depending on the size of the company (Table 4.9).
Note: While black denotes law, regulations or listing rules, blue italic denotes codes. Portugal’s BoD and SB denote board of directors and supervisory board. See Table 4.7 for data.
All jurisdictions require or recommend the establishment of an audit committee with provisions to promote its independence. While most jurisdictions do not mandate nomination and remuneration committees, the majority at least recommend their establishment, often with mostly or entirely independent directors. While less common, a growing number of jurisdictions have started requiring or encouraging the establishment of other specialised committees.
The three traditional committees (audit, nomination and remuneration committees) are predominantly justified from the standpoint of dealing with principal-agency problems and managing conflicts of interest, while specialised committees tend to focus more on providing advice on specific areas of expertise (Rey, 2022[1]).
4.2.1. Traditional committees
All surveyed jurisdictions require or recommend that listed companies establish an independent audit committee. Some jurisdictions (Brazil, Finland, Sweden) require audit committees but also allow some flexibility for alternative arrangements (in Brazil, fiscal councils can be used to carry out most audit committee functions, and in Finland and Sweden, the functions of the audit committee are explicitly required but may be carried out by the full board). The majority of jurisdictions encourage the establishment of nomination and remuneration committees through code recommendations, while nomination committees are mandatory in 12 jurisdictions and remuneration committees in 16 (Figure 4.5).
Note: Based on 52 jurisdictions. See Table 4.10 for data.
Note: Based on 52 jurisdictions. In panel B, jurisdictions that have both law/regulation/rule and code are counted under law/regulation/rule. See Table 4.10 for data.
To address conflicts of interest, full or majority independent membership is required or recommended for all three committees in most jurisdictions. Thirty-one jurisdictions require the audit committee to have at least a majority of independent directors, while 12 countries recommend such independence in their codes. For nomination and remuneration committees, code recommendations are the preferred approach to encourage companies to appoint at least a majority of independent members, recommended in 22 and 23 jurisdictions, respectively. Concerning the independence of committee chairs, requirements are most common for audit committees, with 33 jurisdictions mandating it. For nomination and remuneration committees, independence is again more commonly encouraged through code recommendations rather than set as a legal requirement (Figure 4.6).
4.2.2. Risk management and other committees
Sixty-one percent of jurisdictions require assigning a risk management role to the board, with another 31% recommending this in their codes, up from 26% and 36%, respectively, in 2014. Enterprise-wide internal control and risk management systems are also required in 63% of countries, with an additional one-third having recommendations, a significant evolution since 2014 (Figure 4.7).
Note: The data is based on 42 jurisdictions in 2014 and 52 jurisdictions in 2024. In 2014, “No provision” includes jurisdictions that did not provide an answer. See Table 4.11 for data.
A large majority of jurisdictions (42) require or recommend that audit committees also play a role in risk management oversight. In addition, 20 jurisdictions require or recommend separate risk committees (Figure 4.8). Provisions to appoint chief risk officers are not common, with four jurisdictions mandating them and five providing recommendations (Table 4.11).
Companies establish other committees to support certain tasks and address specific issues. Although law or regulations regarding the establishment of sustainability committees are not widespread, their use is gradually increasing, from one country in 2022 to four (Bulgaria, Croatia, Czechia, the Slovak Republic) in 2024 (Figure 4.8). There has also been a growing trend towards voluntary establishment of other board-level committees. Common examples include compliance committees. In addition, with the rise of artificial intelligence as an increasingly important issue, a growing number of companies are forming technology committees. For instance, in 2024, 13% of S&P 500 companies had a technology committee (EY, 2024[2]).
Note: Based on 52 jurisdictions. See Table 4.11for data.
In most jurisdictions, shareholders are required to appoint and approve the external auditor. Audit committees recommend suitable candidates for shareholders’ final approval.
Shareholders are responsible for appointing and/or approving the external auditor in 47 Factbook jurisdictions. In 10 jurisdictions, this responsibility is shared with the board. In 41 of the 47 jurisdictions where shareholders have appointment powers, the audit committee is required to recommend appropriate candidates. In some jurisdictions, such as Indonesia and Ireland, the board is allowed to appoint the auditor if shareholders fail to do so, or if the position remains vacant during a given period following a company’s registration. In four countries (Brazil, Korea, Mexico, the United States), directors can appoint or approve the external auditor without shareholder intervention.
All jurisdictions but one require or recommend that the audit committee plays a role in the external auditor's selection, appointment, or removal process. For example, in the United Kingdom, the audit committee must select the auditor for the board’s subsequent recommendation to shareholders. For large public companies, the board must accept the choice. A review of the audit’s scope and adequacy is required or recommended in all but three jurisdictions. In India, the audit committee monitors the auditor’s independence and performance and the effectiveness of the audit process. The involvement of the audit committee in setting audit fees is required in 19 jurisdictions, with an additional 7 recommending this practice (Figure 4.9).
Note: Based on 52 jurisdictions. See Table 4.12 for data.
Over two-thirds of Factbook jurisdictions require that listed companies rotate their external audit providers after a specified period, typically after ten or more years of engagement. Nearly all jurisdictions have provisions for the rotation of audit partners.
Among the 38 jurisdictions that require audit firm rotation and set a maximum term before rotation, 42% set the term at ten years. The term can be exceptionally extended in roughly half of those jurisdictions (Figure 4.10). Between 2022 and 2024, the number of jurisdictions requiring rotation after ten years grew from 68% to 74% while those requiring a shorter period of between five to ten years decreased from 32% to 26%.
In the European Union, the 2014 European Audit Regulation requires audit providers of public interest entities to rotate at least every 10 years, with a possible extension up to 20 or 24 years. Subsequently, EU members have generally set the initial duration of engagement at 10 years and allow for term extensions. For example, Bulgaria extended the initial term from 7 to 10 years in 2024.
All but three jurisdictions (Finland, Israel, Norway) require or recommend the rotation of an audit partner after a specified period. In the United States, while lead and concurring partners (or engagement quality reviewers) are required to rotate off an engagement after a maximum of five years and must be off the engagement for five consecutive years, other audit partners are subject to rotation after seven years on the engagement and must be off the engagement for two consecutive years.
Note: Based on 38 jurisdictions for maximum term years before audit firm rotation. Based on 38 jurisdictions for whether maximun term periods before rotation can be exceptionally extended. See Table 4.13 for data.
In all but two jurisdictions, the public audit oversight body is responsible for supervising or carrying out quality assurance reviews or inspections of audits of all listed entities. However, in 11 of these jurisdictions, these responsibilities are split between the professional and public audit bodies. The public oversight body is also exclusively responsible for carrying out investigative and disciplinary procedures for professional accountants in 31 jurisdictions and for the approval and registration of external auditors in 30 jurisdictions, while they share these responsibilities with the professional body in most other jurisdictions. The responsibility for adopting auditing standards is more evenly split between public oversight bodies and professional associations (Figure 4.11).
Funding is an important factor to consider in relation to the independence of the public oversight body. Levying fees on the audit profession or audited entities remains the most widely used funding method, with 69% of jurisdictions applying it. In one-third of jurisdictions, both the government and audit profession entities serve as sources of funding for the public oversight body, while the government is the exclusive funding source in 23% of jurisdictions (Table 4.14).
Note: Based on 52 jurisdictions. See Table 4.14 for data.
Shareholders can nominate or propose board members in nearly all jurisdictions. Directors are usually elected by obtaining a majority of shareholders' votes, in most cases allowing shareholders to vote for individual candidates.
Majority voting for board elections is required in 81% of jurisdictions, double the figure in 2014 (Figure 4.12). While shareholders can vote for individual candidates in most jurisdictions (88%), three jurisdictions (Colombia, Italy, Portugal) require voting for a list but provide some mechanism to ensure consideration of minority shareholder votes. For example, in Portugal, the articles of association of listed companies must include one of two options aimed at ensuring that minority shareholders can appoint at least one member of the board. In Greece, both individual and list voting are considered for board elections.
Note: Based on 52 jurisdictions. See Table 4.15 for data.
Some jurisdictions strengthen minority shareholders’ influence on board elections by allowing them to cast all their votes for one candidate when there are multiple options (“cumulative voting”), instead of restricting their votes per share to each candidate contest. Saudi Arabia is the only country that mandates it, and China requires it to elect supervisors only in specific cases. Although 48% of jurisdictions allow electing board members in this manner, it is not widely used (Figure 4.13). In the United States, Delaware Law’s default rule is plurality voting, although companies may provide for cumulative voting.
Note: Based on 52 jurisdictions. See Table 4.15 for data.
While qualification standards for board candidates and screening processes are widely defined, criteria for audit committee members and independent directors are required in only a few jurisdictions.
In nearly 75% of jurisdictions, all board candidates are expected to meet qualification standards. Fewer jurisdictions set qualification standards for audit committee candidates (11) and independent directors (8) (Figure 4.14). Some jurisdictions use different combinations regarding scope and conditions. For example, Türkiye recommends standards for all candidates but requires certain conditions for audit committee members and independent directors. In Chile, all directors must meet some qualification requirements, while independent directors must comply with additional legal and procedural conditions.
Nine jurisdictions require candidates to undergo a formal screening procedure for board nomination, while an additional 22 jurisdictions recommend such a procedure. The United Kingdom recommends that a nomination committee assess the balance of skills, experience, independence and knowledge necessary for board membership. In China, a nomination committee is responsible for selecting and reviewing candidates for director positions, including their qualifications.
Note: Based on 52 jurisdictions. “Both” refers to jurisdictions that have both a law/regulation/rule and a code. See Table 4.17 for data.
All jurisdictions but one require or recommend the disclosure of candidates’ names to shareholders. Requirements are more prominent than code recommendations for disclosing candidates’ qualifications and their relationship with the firm.
The disclosure of candidates' names is required by 44 jurisdictions. During 2014-24, the percentage of jurisdictions requiring or recommending the disclosure of candidates’ qualifications and of their relationship with the firm increased from 61% to 88% and from 51% to 85% respectively (Figure 4.15).
Note: Based on 52 jurisdictions.“Both” refers to jurisdictions that have both a law/regulation/rule and a code. See Table 4.17 for data.
Nearly all jurisdictions establish general criteria for directors' and executives' remuneration. A majority include specific schemes, with long-term incentive mechanisms (LTIM) the most common scheme.
All jurisdictions but one (the United States) have set general criteria for the structure of directors’ and executives’ remuneration. The number of jurisdictions with mandatory remuneration criteria further increased between 2022 and 2024, from 45% to 54%, and up from 39% in 2014 (Figure 4.16). However, trends vary between jurisdictions. On the one hand, around half have not changed their regulation since 2014. Within this group, the split between mandatory and recommended criteria is nearly even. For example, Finland, Ireland and Poland provide recommendations, while Germany, Greece and the Slovak Republic set criteria in law. On the other hand, within the jurisdictions that have changed their regulatory framework since 2014, a majority have moved from recommendations to mandatory requirements. However, this trend has not been uniform, with differences among EU jurisdictions. For instance, while Denmark, Estonia and France shifted from requirements to recommendations, Italy, Portugal and Spain have adopted legislation.
Note: Based on 52 jurisdictions. See Table 4.18 for data.
Forty-one jurisdictions have a specific requirement or recommendation on remuneration schemes. Long-term incentive mechanisms (LTIM) are required or recommended in 35 of these jurisdictions, making them the most common type of scheme. These may span from two to three years and involve stock options or equity incentives. Requirements or recommendations to limit or cap severance pay (SPC) are required or recommended in over one-third of all Factbook jurisdictions (Figure 4.17). While LTIMs are established evenly as either a requirement or a recommendation, SPCs are primarily a requirement. Seventeen jurisdictions implement a combination of LTIMs and SPCs. Some jurisdictions, including Bulgaria, Colombia, Germany and Romania, have introduced provisions to require or encourage sustainability-related metrics in their remuneration policies.
The scope, conditions and combinations of criteria implemented vary between jurisdictions. In Australia, recommendations stipulate that board members, specifically non-executive directors, should not be provided with severance payments. Türkiye recommends that the remuneration of independent directors should not be based on profitability, share options or company performance.
While countries have generally not established specific quantitative limits on executives' or directors’ pay in their regulatory frameworks, India sets a maximum limit on the aggregated remuneration of all directors at 11% of profits. A different limit is established if the company does not produce a profit. However, these limits can be exceeded if approved by the shareholders. In 2023, Saudi Arabia replaced salary limits with remuneration criteria.
Note: Based on 52 jurisdictions. See Table 4.18 for data.
Approximately three-fourths of jurisdictions require a binding or advisory shareholder vote on the remuneration policy and on the payment level or amount, with various ‘’say on pay’’ mechanisms. Nearly all jurisdictions require or recommend the disclosure of the remuneration policy and payment conditions.
Shareholders must approve the remuneration policy and the level or amount of payment packages in over half of the jurisdictions. Advisory shareholders’ resolutions on the remuneration policy are required in 19% of jurisdictions, and in 27% for the level or amount of remuneration (Figure 4.18, Figure 4.19).
Jurisdictions provide different “say on pay” schemes when establishing the scope of shareholder approval. In Italy, while the general meeting must approve the total remuneration of board and executive committee members, the board may also have to approve the remuneration of executive members. In Costa Rica, the remuneration policy for the board and key executives should always be approved by shareholders if it includes variable performance-based bonuses in company shares. In Singapore, listing rules require that the articles of association contain a provision stating that fees payable to directors shall not be increased except pursuant to a resolution passed at a general meeting.
Note: Based on 52 jurisdictions. See Table 4.19 for data.
The increasing attention given to remuneration by shareholders has contributed to enhancing disclosure requirements. All jurisdictions but one now require or recommend that companies disclose their remuneration policies (Table 4.19). The extent to which remuneration disclosure is now required represents a significant evolution in legal and regulatory frameworks.
Note: Based on 52 jurisdictions. See Table 4.19 for data.
In a 2010 OECD survey of listed companies in 35 jurisdictions, individual remuneration was disclosed by all companies in only one-fifth of the jurisdictions and by most companies in roughly another one-fifth (OECD, 2011[3]). Today, disclosure of individual remuneration amounts is required or recommended for all or some directors and executives in 49 out of 52 jurisdictions, while disclosure of the total amount of remuneration is required in 50 jurisdictions (Table 4.19). New Zealand has one of the widest scopes for disclosure, requiring it for all directors and employees earning above NZD 100 000. Conversely, Australia only requires individual disclosure for key management personnel. In the United States, the law requires that all directors, the CEO, CFO and the three most highly compensated officers other than the CEO and CFO (if compensation is above USD 100 000) disclose their remuneration packages.
Many jurisdictions have adopted measures to encourage women’s participation on corporate boards and in senior management, most often via disclosure requirements and other measures such as quotas and voluntary targets.
With regards to disclosure requirements, 65% of Factbook jurisdictions mandate listed companies to disclose the gender composition of boards, whereas only 34% mandate disclosure of the gender composition of senior management (Figure 4.20). This marks an increase from 2020, when the figures stood at 56% for boards and 22% for senior management. The EU Directive on improving the gender balance among directors of listed companies has had an important impact. Beyond requiring large, listed companies to apply transparent procedural requirements for board selection aimed at enhancing the share of women on boards, it also mandates EU countries to require large listed companies to provide competent authorities with information annually about the gender composition of their boards.
In Japan, since 2023, listed companies have been required to disclose the proportion of female managers in their annual securities reports (FSA, 2024[4]). In Luxembourg, the most recent update to the X Principles of Corporate Governance, issued in January 2024, recommends that companies disclose the gender composition of both their supervisory and management boards on a comply-or-explain basis. In China, the largest listed companies must report the gender composition of their entire workforce under newly implemented sustainability disclosure requirements (KPMG, 2024[5])
Note: This Figure shows the percentage of jurisdictions applying either a law/regulation, recommendation, or no provision. N/A = information not available. See Table 4.20 for data.
Regarding women’s participation on boards of listed companies, 35% of jurisdictions have now established mandatory quotas, up from 24% in 2020. Five jurisdictions require large publicly listed companies to have at least 40% of the underrepresented sex on boards (Finland, France, Iceland, Italy, Norway), eight require between 20‑35%, and five mandate “at least one” female director (Hong Kong (China), India, Israel, Korea, Malaysia). Specific requirements companies vary across jurisdictions, with criteria applicable commonly including company size, number of employees or board members, and/or size of assets. Almost all jurisdictions impose sanctions for non-compliance, and they take various forms, such as warning systems, fines, board seats remaining vacant, void nominations and delisting for non-compliant companies.
Although companies in EU Member States are not required to comply until June 2026, the EU Directive appears to have reinforced progress across the EU since its adoption in 2022. The average share of women on boards of large listed companies rose from 32.3% in 2022 to 34.7% in 2024 (EIGE, 2024[6]). The Directive sets quantitative objectives for large listed EU companies (at least 250 employees), requiring that at least 40% of the non-executive board positions or 33% of all director positions be held by individuals of the under-represented sex. In addition, large publicly listed companies might also have to undertake individual commitments to reach gender balance among their executive board members. Listed companies that will fall short of the targets by June 2026 are mandated to implement the procedural requirements ensuring the transparency of the selection process and report on the measures taken or planned to achieve gender-balanced representation on their boards. These requirements are enforceable by penalties (EC, 2025[7]).
Over a third of jurisdictions (35%) either set voluntary targets for listed companies or require listed companies to set their own numerical targets, as recommended by the jurisdiction’s comply-or-explain corporate governance code or mandated by legislation, an increase from 30% in 2020. Five countries (Denmark, Finland, Spain, Sweden, the United Kingdom) have set the target at 40% of women on boards. Some jurisdictions where targets have been adopted have complementary measures. For example, the Australian Corporate Governance Code does not set a specific target but recommends that companies establish their own. Each company’s target and progress should be published by the Workplace Gender Equality Agency Australia (WGEAA). Companies that fail to meet these targets may be deemed ineligible for Australian Government procurement contracts (BlandsLaw, 2025[8]).
A growing number of jurisdictions extend mandatory quotas or targets to senior executives. In France, companies with more than 1 000 employees will have to meet 30% gender representation among senior executives and management committee members by 2027, increasing to 40% by 2030. Since 2022, these companies have also been obliged to publish an annual report analysing gender representation. In Switzerland, the corporate law reform that took effect in 2023 requires companies with more than 250 employees to have at least 20% of women on their management boards, starting from 2031 (Mondaq, 2025[9]). If companies fail to meet this target, they are required to explain the shortfall and outline the measures they are taking to address the gender imbalance. Germany requires listed companies to set targets for the executive board and the two management levels below the board. In 2023, Japan approved “The Basic Policy on Gender Equality and Empowerment of Women 2023”, aiming for women to hold over 30% of executive positions in companies listed on the Tokyo Stock Exchange's Prime Market by 2030. As an interim goal, these companies are encouraged to appoint at least one female board member by 2025 (JPX, 2023[10]).
4.6.1. Participation of women on boards
The average participation of women on boards across the 52 Factbook jurisdictions reached 29% in 2024, a significant increase from 22% in 2019.
Since 2019, jurisdictions with quotas and those with voluntary targets have achieved comparable levels of women representation on boards, increasing from an average of 26% in 2019 to 33-34% in 2024 (Figure 4.21). The percentage of women on boards in jurisdictions with no quotas or targets is significantly lower at 23%, but the increase from 17% in 2019 shows that alternative measures can also help achieve results. Such measures can include shareholder initiatives, training, networking, mentorship programmes and strong commitment from the company management to promoting a more enabling environment for the advancement of women on boards.
Note: Average percentage of women on boards was calculated for the three categories relevant to the figure above, namely, jurisdictions with quotas, targets or no provision. Austria, Croatia, Finland, Germany, Hong Kong (China), Malaysia and the Netherlands are counted twice due to their implementation of both a quota and a target. Data from 2019–21 was obtained from OECD. See Table 4.21 for data and description of data sources.
Among the jurisdictions that have set voluntary targets, the average share of women on boards of listed companies has reached or exceeded the target level in nearly of them. In 2024, out of the ten jurisdictions that had 40% or more of women on boards, five (France, Iceland, Norway, Italy, the Netherlands) had mandatory quotas, and four (Australia, New Zealand, Spain, the United Kingdom) had voluntary targets. Ireland also had more than 40% of women on boards despite having neither formal quotas nor targets for listed companies (Figure 4.22). Eight countries (Chile, Czechia, Greece, Japan, Korea, Lithuania, Mexico, Saudi Arabia) have at least doubled the share of women on boards since 2019.
In Czechia, private sector-led initiatives, such as the Czech Diversity Charter, have contributed to the increase in the number of women on corporate boards (Diversity Charter, 2025[11]). In Saudi Arabia, progress has been driven by government-led initiatives aimed at supporting women’s entry into the labour market, with a target of increasing female workforce participation from 22% to 30% by 2030 (KSA, 2025[12]). In Korea, several global asset management firms have encouraged companies to develop ESG strategies that include enhancing gender diversity on their boards (Glass Lewis, 2023[13]).
While the share of women on boards has been increasing, their representation in senior leadership positions is lagging. In 2024, only 10% of large, listed companies in Factbook jurisdictions had a female board chair, a small rise from 9% in 2022. Companies in only five countries New Zealand, Latvia, the Slovak Republic, Poland, and Italy had more than 20% (MSCI, 2025[12]; EIGE, 2024[4]). A recent study finds that, globally, women most commonly participate in audit committees, followed by remuneration and nomination committees. Furthermore, the highest proportion of female committee chairs is on remuneration committees (32%), followed by audit (31%) and nomination committees (27%) (MSCI, 2025[14]).
Note: In instances of an “at least one’’ quota (Hong Kong (China), India, Israel, Korea and Malaysia), average board size of the relevant jurisdiction was used to calculate an average percentage for the applicable quota in the Figure above. Norway’s quota is dependent upon board size and may range from 33% to 50%; for the Figure above, the average between the smallest and highest quota was used. Japan set a target at 30% for listed companies on the First section of the Tokyo Stock Exchange by the end of 2030. It is not shown in the Figure because of a substantial difference between the coverage of companies, etc. to which the target applies and the data that the Figure covers.
Source: Data from 2020 was obtained from OECD. See Table 4.21 for data.
For Hong Kong (China), average board size data for 2023 may be found here.
For India, average board size data for 2024 may be found here.
For Israel, average board size data for 2022 was provided by the Israeli Securities Authority (ISA).
For Korea, average board size data for 2023 may be found here.
For Malaysia, average board size data for 2022 was provided by the Securities Commission (SC Malaysia).
With regards to women in management, as defined by the International Labour Organization (ILO), the average share reached 35% in 2024, slightly up from 33% in 2022, and higher than the 29% average on boards. The percentages of women in management and on boards have grown at a similar pace since 2022.
However, at the highest levels of management, women served as CEOs in only 8% of the largest listed companies in Factbook jurisdictions on average, a slight increase from 7% in 2022. Lithuania and New Zealand are the only countries where more than 20% of CEOs in these companies are female (MSCI, 2025[14]; EIGE, 2024[6]).
1. In Argentina, companies falling within the scope of public offering regulations are required to have an Audit Committee (Comité de Auditoría) with oversight functions. It is designated and integrated by members of the Board (majority independent). In this sense, the Audit Committee is generally considered a sub-organ of the Board. On the other hand, companies in Argentina have also another body (distinct from the board) with oversight functions, the Statutory Auditors Committee (Comisión Fiscalizadora) and Supervision Council (Consejo de Vigilancia). In that sense, the Capital Market Law foresees that companies making public offering and having established an Audit Committee may dispense with a Statutory Auditors’ Committee.
2. In China, according to CSRC transitional rules and the revised Company Law, listed companies shall establish a board audit committee (replacing the supervisory board) by 1 January 2026, while non-listed companies may adopt this structure per their articles of association (Articles 69 & 121 of the revised Company Law). Although China has shifted from a two-tier board structure to a one-tier board structure, supervisory boards may exist in listed companies until 1 January 2026. Therefore, Tables 4.6, 4.7, and 4.9 include information on supervisory boards under the two-tier board structure.
3. In Iceland, the board in its supervisory function is composed of non-executive directors only. In national law, the board appoints and delegates the executive powers to a single person, the CEO (not a member of the supervisory board). The CEO is the chair of the management board, which is composed of executive directors.
4. In Norway, both supervision and management of the operations of the company are the responsibility of the board of directors. In companies with more than 200 employees, a corporate assembly shall be elected. The corporate assembly’s tasks are limited to and consist of electing the members and the chairman of the board of directors, supervising the board of directors’ and general manager’s administration of the company, and issuing opinions to the general meeting as to whether the board of directors proposal for income statements and balance sheets should be adopted and as to the board of directors’ proposal for the employment of the profit or coverage of losses. At the proposal of the board of directors, the corporate assembly may adopt resolutions regarding certain investments, efficiency measures or alterations of the company’s operations that will entail a major change or reallocation of the labour force. Lastly, the corporate assembly may adopt recommendations to the board of directors.
5. The EU regulation (EC/2157/2001) stipulates that European public limited liability company (Societas Europaea) shall have the choice of a one‑tier system (an administrative organ) or a two‑tier system (a supervisory organ and a management organ).
1. In Italy, the traditional model, where the general meeting appoints both a board of directors and a board of statutory auditors, is the most common board structure. The board of statutory auditors functions as an internal auditing board.
2. In Japan, statutory auditors (Kansayaku) are different from external auditors. Statutory auditors are appointed by shareholder meetings and their principal role is to audit the activities of directors from a legal viewpoint. Statutory auditors can be both internal and external (external statutory auditors are those who have not worked for the company as executive directors or employees). The Companies Act requires certain large companies to have committees of statutory auditors and half or more of the members of such committees shall be external statutory auditors.
3. In Portugal, all three models comprise two boards (a board of directors and a supervisory board) and a statutory auditor, although subject to different rules. Portugal no longer has the concept of external auditor: since the transposition/implementation of the European audit legislation (2014) there is only the statutory auditor, who can perform the tasks once reserved to the external auditor. However, some national companies prefer to appoint a different auditor to issue the audit report as well as to carry out audit services with a broader scope than statutory audits, provided that the integrity of the functions and the liability regime of the statutory auditor are not compromised.
Key: [ ] = requirement by the listing rules; ( ) = recommendation by the codes or principles; “-” = absence of a specific requirement or recommendation; SB = Supervisory board; GSM = General Shareholder Meeting. In the Tier(s) column, 1 = one-tier board; 2 = two-tier board; 1+2 = optional for one-tier and two-tier system. For definitions of tiers for Italy, Japan and Portugal, see Table 4.5.
1. In Australia, directors may be re‑appointed for successive terms. This includes independent directors.
2. In Bulgaria, the supervisory board can have a maximum of seven members, while the board of directors in the one-tier system can consist of up to nine members.
3. In Canada, the Canada Business Corporations Act requires annual elections of directors for distributing corporations.
4. In Hong Kong (China), the Main Board Listing Rules do not contain any requirements for minimum board size, but they require at least three independent non-executive directors who must represent at least one‑third of the board.
5. In Hungary, in the case of a one‑tier system, there cannot be less than five members.
6. In India, while the minimum number of directors on the board of a public company is three, the boards of the top 2 000 listed entities, based on market capitalisation, are required to comprise no less than six directors. Furthermore, the maximum number of directors (15) may be increased by a special resolution of the shareholder meeting.
7. In Ireland, the Corporate Governance Code provides that the Chair should not remain in post beyond nine years.
8. In Israel, the minimum board size is underpinned by the requirement for the membership of audit committees. In addition, according to Israeli company law, there is a limited term for certain types of directors such as an external director.
9. In Korea, the minimum size of the board of directors is smaller for SMEs.
10. In Lithuania, the board shall be elected by the supervisory board. If the supervisory board is not formed, the board shall be elected by the general meeting of shareholders.
11. In Malaysia, a director’s retirement is based on one‑third rotation at every annual general meeting where the longest serving director in office (since the last election) shall retire. A retiring director shall be eligible for re‑election.
12. In Peru, the corporation’s bylaws must establish a fixed number or a maximum and minimum number of directors. When the number of directors is variable, the shareholder’s meeting, before the election, must decide on the number of directors to be elected for the corresponding period. The number of directors shall not be less than three.
13. In Portugal, when a company adopts the two‑tier model, the number of members of the supervisory board must be higher than that of the executive board of directors. Furthermore, in the two‑tier model, members of the executive board are appointed by the supervisory board, unless the articles of association provide that they are appointed by the shareholders. In the remaining two models (traditional model and one-tier model), members of the board of directors are elected by the shareholders.
14. In Romania, the Companies Law provides that for one-tier companies, the administrators are appointed by the ordinary general meeting of shareholders, except for the first administrators, who are appointed by the articles of association. For two-tier companies, the appointment of the members of the management board is the responsibility of the supervisory board, which also assigns one of them the position of chairman of the board of directors. The members of the supervisory board are appointed by the general meeting of shareholders, except for the first members, who are appointed by the articles of association. The data regarding the numbers of the members of the board (minimum 3 and maximum 11) are applicable in the case of the two-tier system.
15. In Türkiye, directors may be re‑appointed unless otherwise stated in the company’s articles of association. Independent directors may also be re‑appointed. However, independence criteria set forth under the Corporate Governance Principles requires the independent director not to have served as a board member for six years in the company within the previous ten years. Therefore, it would be possible to re‑appoint an independent director successively for a second term only.
16. In the United Kingdom it would be possible for two executive directors to be the sole members of a board. However, it is recommended that there also be an independent chair and independent board members. Independent board members have to be re‑appointed each year, but the UK Corporate Governance Code recommends that independent board members do not stay in post beyond a total of nine years.
17. In the United States, NYSE and Nasdaq rules require companies to have an audit committee of at least three members.
Key: [ ] = requirement by the listing rules; ( ) = recommendation by the codes or principles; “-” = absence of a specific requirement or recommendation. For two‑tier boards, separation of the Chair from the CEO is assumed to be required as part of the usual supervisory board/management board structure unless stated otherwise. In the Tier(s) column, 1 = one-tier board; 2 = two-tier board; 1+2 = optional for one-tier and two-tier system. For definitions of tiers for Italy, Japan and Portugal, see Table 4.5.
1. In Argentina, regulations stipulate that at least two directors must meet the criteria for independence. Furthermore, these regulations mandate a minimum of three directors on the Board.In companies offering shares to the public, the Board of Directors is required to appoint the members of the Audit Committee (Comité de Auditoría) from among its own members, at least 66% of whom must be independent.
2. In Brazil, according to CVM Resolution No. 80/2022 (Annex K, Article 5º), the participation of independent members on the board of directors is mandatory for listed companies registered in category A with outstanding shares or certificated of deposit of shares.
3. In Bulgaria, the required ratio of independent board members applies to the board of directors for one-tier companies and to the supervisory bord for companies with a two-tier structure.
4. In Canada, National Policy 58‑201 Corporate Governance Guidelines provides that there should be a majority of independent directors.
5. In Chile, a mandatory independent board member is required for a listed company only if it has listed equity above 1 500 000 inflation linked units (approx. USD 58 million as of Dec. 2024) and at least 12.5% of its shares with voting rights are owned by shareholders who do not individually own or control more than 10% of such shares.
6. In Costa Rica, the Corporate Governance Regulation was reformed to adopt a new regulatory requirement with multiple criteria for board independence that took effect on 1 January 2023, including a transitionary measure for the provision setting 9 years within a 12‑year period as the maximum to be considered independent to be phased in gradually by 2026.
7. In Croatia, the term of office of a member of the management board is 6 years and 4 years for a member of the supervisory board. Both can be re-elected. Pursuant to the Companies Act (Article 255 Paragraph 6), if a member of the supervisory board was a member of the supervisory board of the company for more than 12 years, that member is not considered as independent. In a one-tier structure, this requirement applies accordingly to the members of the management board.
8. In Czechia, according to the longstanding jurisprudence, the CEO and Chair of the board serve separately.
9. In Estonia, if there is an uneven number of board members, there may be one independent director less than dependent directors to comply with the code recommendation.
10. In Finland, pursuant to the Corporate Governance Code, the board of directors may, based on an overall evaluation, determine that a director is not independent of the company or a significant shareholder if the director has served as a director for more than 10 consecutive years. Whether the independence was influenced by a director’s long service history (in excess of 10 consecutive years) shall be evaluated at regular intervals as part of the overall evaluation, i.e. at least once a year.
11. In Germany, according to the German Corporate Governance Code, the supervisory board shall include an appropriate number of independent members (regarding the members appointed by the shareholders). The Code contains further specifications. Also, not more than two former members of the management board shall be members of the supervisory board.
12. In Hong Kong (China), pursuant to the Corporate Governance Code, if an independent non-executive director has served more than nine years, such director’s further appointment should be subject to a separate resolution to be approved by shareholders and the relevant shareholder circular should state why the board (or the nomination committee) believes that the director is still independent and should be re‑elected. With effect from 1 July 2025, it is a listing rule requirement that a board of directors must not include an independent non-executive director who has served on the board as an independent non-executive director for a period of nine years or more, subject to a phased transitional arrangement ending at the first AGM held on or after 1 July 2031. The Corporate Governance Code provision regarding the explanation and re-election of an independent non-executive director who has served more than nine years will therefore be repealed after 30 June 2031. In addition, under the Listing Rules, a person/entity holding 10% or more of the company’s share is a “substantial shareholder”, and a candidate that is or was connected with a substantial shareholder within two years immediately prior to the date of his proposed appointment would not be considered “independent”. A candidate holding 5% or more of the company’s shares will normally not be considered independent.
13. In Hungary, according to Section 3:286 (3) of the Civil Code, controlled companies are not subject to this independence requirement.
14. In India, as per Companies Act, 2013, the separation of the CEO and chair of the board is mandatory unless the company does not carry multiple businesses or if the articles of the association of the company provide otherwise. This requirement applies to public companies, whether listed or not, above a certain size threshold. Further, where the chairperson of the board is a non-executive director, at least one‑third of the board is required to be comprised of independent directors. Where the listed entity does not have a regular non-executive chairperson, at least one-half of the board must be independent. However, where the regular non-executive chairperson is a promoter of the listed entity or is related to any promoter or person occupying management positions at the level of the board or at one level below the board, at least one-half of the board of the listed entity must be independent.
15. In India, independent directors can be appointed for a term up to a period of five years and are eligible for re‑appointment on passing of a special resolution by the company for another term of up to five years. They can stand for reappointment as independent directors, after a cooling-off period of three years.
16. In Indonesia, the maximum term of office for independent supervisory board members (called commissioners) is two periods of the board term. Independent commissioners can be appointed for more than two periods as long as they can explain why they consider themselves independent at the General Shareholder Meeting.
17. In Ireland, a director who “represents a significant shareholder” will not be considered independent unless, as with the other factors such as recent employment, close family ties etc., the board explains why they are considered independent.
18. In Israel, a separation of the Chair and CEO may be waived (for a 3‑year term) subject to the approval of the majority of those shareholders who do not have ‘personal interest’ in the decision and/or do not hold control of the company or if no more than 2% of those shareholders objected to such nomination.
19. In Israel, the tenure on the board ends after directors have been an independent board member for nine years. After this period, they are not allowed to serve as an officer, an employee or to provide services to the company, whether directly or indirectly, for two years.
20. In Italy, the Corporate Governance Code does not recommend explicitly the separation of the chair and the CEO. Instead it requires, in case of the concentration of offices, the appointment of a Lead Independent Director.
21. In Italy, the Corporate Governance Code sets other independence criteria and recommends a different minimum number of independent directors in the board (33% in controlled or 50% in non-controlled large companies and at least two independent directors for all the other listed companies).
22. In Japan, the Companies Act requires certain types of companies to appoint at least one outside director, eliminating an exception that allows companies to avoid appointing an outside director by explaining the reason. In addition, Japan’s Corporate Governance Code indicates that companies listed on the Prime Market of TSE should appoint at least one‑third of their directors as independent directors (two directors if listed on other markets). If a Prime Market listed company, in its own judgement, believes it needs to appoint the majority of directors (at least one‑third of directors if listed on other markets) as independent directors, it should appoint a sufficient number of independent directors.
23. In Korea, the requirement for more than 50% and at least three independent directors applies to listed companies with total assets of KRW 2 trillion or more; and at least 1/3 independent directors to other listed companies.
24. In Korea, the disqualification criteria for independent directors are as follows: 1) shareholders who own more than 10% of the shares or exercise de facto influence on major management matters of a listed company, such as the appointment and dismissal of directors, executive officers, and auditors (“major shareholders”); 2) the spouses and direct ascendants and descendants of the persons described in 1); and 3) in the case where the number of shares owned by the principal and the special related person is the largest, the principal and the special related person.
25. In Malaysia, Practice 5.3 of the Malaysian Code on Corporate Governance recommends that the tenure of an independent director should not exceed a cumulative term of nine years. Upon completion of the nine years, an independent director may continue to serve on the board as a non-independent director. If the board intends to retain the independent director beyond nine years, the board should seek annual shareholders’ approval through a two‑tier voting process.
26. In Peru, the independent director cannot have more than 10 continuous or alternate years during the last 15 years as an independent director of the company or of any company of the group.
27. In Portugal, the threshold for accessing independence depends on the type of situation indicated in the recommendations as determining non-independence.
28. In Singapore, a majority of independent directors is recommended for companies if the chair is not independent. Furthermore, The SGX Listing Rules require independent directors to be subject to a nine‑year tenure limit. Independent directors who have served beyond such limit must be redesignated as non-independent within a prescribed time limit.
29. In Slovenia, the threshold for assessing independence is in relation to a “controlling shareholder”. A shareholder is considered to be a controlling shareholder if they hold the majority of voting rights, if they control the company based on an enterprise contract or if they control the company in practice through other mechanisms.
30. In Switzerland, the separation of the CEO and the chair of the board is required by law for banks and insurers. The Swiss Code recommends in addition the separation of the CEO and the chair of the board of listed companies (article 18 Swiss Code of Best Practice for Corporate Governance). The Swiss Code recommends that the audit committee and the compensation committee consist of independent members of the board. The chairperson of the board should not also be the chairperson of the audit committee (Articles 22 and 37 of the Swiss Code of Best Practice for Corporate Governance (economiesuisse) 2023).
31. In Türkiye, in case the same person is appointed as the CEO and the chair of the board, this shall be disclosed to the public along with a justification. As an exception, the CEO and the chair of the board cannot be the same person for banks and insurers. The number of independent directors shall not be less than one-third of the total director number, while smaller companies shall have a minimum of two independent directors. Also, the independent director cannot hold more than 5% of capital in the company or its controlling shareholder.
32. In the United Kingdom, companies with UK-listed equity shares in the commercial company category must be able to demonstrate that, despite having a controlling shareholder (any person who exercises or controls on their own or together with any person with whom they are acting in concert, 30% or more of the votes able to be cast on all or substantially all matters at general meetings of the company), the applicant is able to carry on its main business activity independently from such controlling shareholder at all times. This is disapplied where a company has a sovereign-controlling shareholder.
33. In the United States, controlled companies are not subject to this requirement for a majority of the board to be independent .
34. In the United States, to be considered independent, a member of the audit committee of a listed issuer may not be an affiliate of the issuer or any of its subsidiaries.
Key: Minimum number of employees: Refers to the minimum company size threshold under which a requirement for employee board members applies; Minimum requirement: refers to the minimum requirement (number or percentage) of employees on the board; Maximum allowance: Refers to the maximum limit (number or percentage) of employees on the board. In the Tier(s) column, 1 = one-tier board; 2 = two-tier board; 1+2 = optional for one-tier and two-tier systems. For definitions of tiers for Italy, Japan and Portugal, see Table 4.5.
1. In Brazil, federal state‑owned enterprises with at least 200 employees (including listed SOEs) must have one employee representative on the board of directors.
2. In Denmark, there is no requirement for employee board representation but a statutory right for employees to appoint representatives (depending on the size of the board).
3. In Finland, employee representation in the administration of companies may be implemented as agreed between the employer and the personnel. If no agreement is reached on personnel representation, the personnel shall have the right to nominate their representatives to one administrative body, which shall be selected by the company from among: a) supervisory board; b) board of directors; or c) similar bodies that together cover the profit units of the company. In cases where employees are appointed to the board, the minimum number of employee representatives is one and maximum allowance is four or 25%.
4. In France, employee representatives must be appointed to the board of directors or to the supervisory board when a company employs over two consecutive years at least 1 000 permanent employees located in France, either directly or through subsidiaries, or at least 5 000 employees worldwide, either directly or through subsidiaries. In that case, there must be at least one employee representative when the board consists of 12 members or less, and at least 2 employee representatives otherwise (commercial code Articles L. 225‑27‑1 and L225‑79‑2). Furthermore, in France, employee representatives may be appointed to the board of directors within a certain limit (five persons or one‑third of board members - whichever is smaller for the companies whose shares are allowed to be traded in the regulated market) if the company’s articles so permit. In companies with a two‑tier structure, the maximum number of employee representatives on the supervisory board is four persons or one‑third of members.
5. Large German companies (with more than 2 000 German-based employees) subject to co-determination must have employees and union representatives filling 50% of the seats on the supervisory board but with the chair having the casting vote.
6. In Iceland, the board in its supervisory function is composed of non-executive directors only; there are no employee representatives nor executives on the supervisory board.
7. In Ireland, worker participation legislation requires board representation in certain state‑owned enterprises.
8. In large companies in the Netherlands (those in the “structure regime” required for companies with more than EUR 16 million in capital and at least 100 employees based in the Netherlands), the Works Council (representing company employees) may recommend candidates to the supervisory board for nomination who are then subject to election by the shareholders. One‑third of the recommended candidates will be nominated by the supervisory board for election, unless the supervisory board deems the candidate(s) unfit, in which case the supervisory board needs to go to the Enterprise Chamber of the Amsterdam Court of Appeal.
9. In Norway, one‑third of the corporate assembly members with deputy members are elected by and amongst the employees.
10. In Sweden, there is no requirement for employee board representation but a statutory right for employees to appoint up to three representatives and their deputies (depending on the size of the company).
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles; ( ) = recommended by the codes or principles; “-” = absence of a specific requirement or recommendation.
This table does not incorporate references to regulations and recommendations applying specifically to financial institutions, while they may be mentioned in a footnote.
1. In Australia, the ASX Corporate Governance Principles and Recommendations recommend that the chair of the audit committee is independent. For the top 300 listed companies, this recommendation becomes a requirement under the Listing Rules. Similarly, it is recommended that listed entities have a remuneration committee, which becomes a requirement for the top 300 listed companies under the Listing Rules. See Listing Rule 12.
2. In Brazil, the audit committee is optional, but, when in place, and in accordance with CVM Resolution No. 23/2021, it enables firms to rotate independent auditors every 10 years instead of every year.
3. In Bulgaria, there is not such a structure as fiscal councils.
4. In Chile, the directors’ committee (with equivalent functions to an audit committee) is comprised of three members of the board, most of whom must be independent. The directors’ committee is a requirement for corporations that have a stock market equity equal to or greater than the equivalent of 1 500 000 development units (approximately USD 58 million as of December 2024) and at least 12.5% of theue shares issued with voting rights are held by shareholders who individually control or own less than 10% of such shares.
5. In Finland, the tasks of the audit committee are established by law but the committee itself is voluntary and the tasks can instead be handled by the full board. The Corporate Governance Code recommends an audit committee to be established if the extent of the company’s business requires that the preparation of the matters pertaining to financial reporting and control be done by a body smaller than the entire board of directors. Neither the managing director nor executive directors should be members of the nomination or remuneration committee.
6. In Germany, the committees consist of members of the supervisory board. Due to the two-tier system, all members of the supervisory board are therefore independent of the executive board.
7. In Hong Kong (China), an issuer with a Weighted Voting Rights structure must establish a corporate governance committee which must be comprised entirely of independent non-executive directors, one of whom must act as the chairman (Main Board Listing Rules 8A.30 and 8A.31). The nomination committee can be chaired by the board chairman or an independent non-executive director (Main Board Listing Rule 3.27A).
8. In Indonesia, according to POJK No 34/POJK.04/2014 Article 3, listed companies and public companies are required to have an independent chair member selected from among their independent commissioners in the committee on nomination and remuneration. Other members might come from commissioners, an independent external party, and person who is under the board of directors in the human resources division. Moreover, members of the committee from the human resources division should not be a majority.
9. In Japan, the establishment of a board-level audit committee is mandatory for a company with the three committees model (C) and for a company with an audit and supervisory committee model (S). In both cases, the majority of members should be outside directors. The establishment of a nomination and remuneration committee is mandatory only for a company with the three committees model, and, in that case, the majority of members should be outside directors. For companies listed on the Prime Market, it is required that the majority of members of each committee be independent, and to disclose the committees’ mandates and roles, as well as the policy regarding the independence of the composition.
10. In Korea, the establishment of a board-level audit committee and nomination committee is mandatory for listed companies with total assets valued at KRW 2 trillion or more as of the end of the latest business year. Every financial company shall establish a board-level audit committee, nomination committee, risk management committee and a remuneration committee. However, the remuneration committee need not be established for a financial company if the audit committee deliberates on matters related to remuneration, amongst other aspects.
11. In Korea, the Corporate Governance Best Practices 2 6.2 states: “Committees within the board of directors must be composed of a majority of outside directors. However, it is recommended that the audit committee, compensation committee, internal transactions committee and outside director nomination committee be composed entirely of outside directors.”
12. In Korea, financial institutions are required to establish a remuneration committee with few exceptions.
13. In Mexico, although the establishment of a nomination or remuneration committee is not mandated by law, the board is responsible for approving, with the opinion of the relevant committee, the appointment, election and, where applicable, removal of the company's CEO and their total compensation, as well as the policies for the appointment and total compensation of other key executives (LMV Art. 28, III, d). Also, the corporate practices committee must report annually to the board on the compensation of the CEO and key executives (LMV Art. 43, I, c).
14. In Peru, the Corporate Governance Code recommends that the audit committee, risk committee and remuneration committee for listed companies should be chaired by independent directors. Furthermore, the Code recommends that the number of committees depends on the size of the company and the nature of its business. However, financial entities, insurance companies and pension fund management companies, which are required to be listed companies, are obliged to set up an audit committee, a risk committee and a remuneration committee.
15. In Poland, although no general requirements exist, there are sectoral provisions in Banking Act of 29 August 1997, making Remuneration and Nomination committees obligatory for “significant banks” (Articles 9cb and 9cd respectively). Significant banks are those that are either recognised as such by the Polish Financial Supervision Authority or that meet at least one of the requirements listed in Article 4, paragraph 35 (e.g. being listed or having significant participation in the sector assets).
16. In Romania, according to the BVB Code of Corporate Governance: “The Boards of Premium Tier companies should set up a Nomination and Remuneration Committee formed of non-executive directors. The majority of the Committee members is recommended to be independent, including the Committee chairperson. The Board may also establish a separate nomination committee and a separate remuneration committee if the board composition accommodates it and if this is justified given the company’s size and the complexity of its business and governance structures.
17. In Saudi Arabia, members of the audit committee shall be composed of shareholders or others, including at least one independent director, and it is recommended that half of the members are independent. Executive Directors are not allowed to be members of the audit committee.
18. In Singapore, where a listed company adopts a dual class share structure or is a special purpose acquisition company, the majority of each of the committees, including the respective chairmen, must be independent.
19. In the Slovak Republic, financial institutions are required to establish a remuneration committee.
20. In South Africa, the requirement to have a remuneration committee is limited to issuers listed on the Main Board of the Johannesburg Stock Exchange.
21. In Sweden, the tasks of the audit committee are established by law, but the committee itself is voluntary and the tasks can instead be handled by the full board. Neither the company chair nor any other member of the board may chair the nomination committee.
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles; “-” = absence of a specific requirement or recommendation; N/A = not applicable. In the “Board responsibilities for risk management” and “Implementation of the internal control and risk management system” columns, if the framework requires or recommends companies to manage a specific risk, this is noted in parentheses.
This table does not incorporate references to regulations and recommendations applying specifically to financial institutions, while they may be mentioned in a footnote.
1. Risk management role of audit committee: Indicates that risk management is explicitly included in the role of the audit committee.
2. In Australia, entities that provide financial services under an Australian financial services licence are required by legislation to have in place adequate risk management systems. Directors’ duties of care and diligence and good faith under the Corporations Act 2001 are also a source of board responsibility for risk management.
3. In Brazil, listed companies are required to disclose if they have a formal risk management policy in their Reference Form (shelf document). They also have to disclose its characteristics and the adequacy of the operational structure and of the internal controls for the verification of the risk management policy adopted.
4. In Chile, General Rules No. 385 and No. 30 establish that companies should disclose several aspects of risk management, such as the frequency of board meetings with risk management, internal audit and social responsibility units, as well as the policies established by the board on risk management, including sustainability.
5. In China, a listed company shall establish internal control and risk management systems and set up a special department or designate an internal department to be responsible for risk management, such as inspection and supervision of the company’s important operations, control over subsidiary companies, disclosure of financial information and compliance with the laws and regulations.
6. In Czechia, an audit committee (mandatory for listed companies) oversees the sustainability and risk management issues.
7. In India, the requirements specified in the table apply to listed entities. The establishment of a separate risk management committee is mandatory for the top 1 000 listed entities by market capitalisation, but voluntary for other listed entities under the Listing Regulations. The role of the risk management committee includes formulation of a detailed risk management policy which shall include a framework for identification of sustainability risks (particularly, ESG related risks).
8. In Indonesia, listed companies from the bank industry, insurance and financing companies, are obligated to establish a separate risk committee.
9. In Ireland, the responsibilities of the audit committee include responsibilities in relation to assurance of sustainability reporting (Companies Act, Section 1616 – introduced by the Corporate Sustainability Reporting Regulations 2024).
10. In Israel, internal auditors are in charge of risk management. The board of directors of a listed company is required to appoint an internal auditor, in charge of examining, among others, the propriety of the company’s actions, in terms of compliance with the law and proper business management. In addition, under Israeli disclosure regulations, listed companies are required to disclose the appointment of the individual responsible for managing market risks.
11. In Italy, the Code does not require the committee to be necessarily comprised by board members only but leaves it to the company to choose what composition is best for the committee that supports the board in pursuing the sustainable success of the company.
12. In Korea, every listed financial company shall establish a risk management committee in the board of directors, with the total asset valued KRW 2 trillion or more. However, where a financial holding company has formulated risk management standards for its subsidiaries, the subsidiaries do not need to formulate risk management standards.
13. In Peru, according to the Corporate Governance Code, the board of directors of any corporation establishes, among its members, special committees that focus on the analysis of the most relevant aspects for the performance of the corporation, such as audit, nomination and remuneration, risks, and corporate governance. The number of committees established depends on the size of the corporation and the nature of its businesses, with at least a nomination and remuneration committee and audit committee.
14. In Portugal, the duty to supervise the effectiveness of risk management systems, commonly attributed to audit committees, is performed, in any of the governance models accepted in the country, by the supervisory board.
15. In Romania, according to the BVB Code of Corporate Governance, the Company is recommended to establish a risk management function responsible for ensuring accurate, complete and timely identification of the risks, ensuring that adequate and feasible risk control measures are in place and monitoring the risk management procedures. The risk management function, through the Chief Risk Officer (CRO), where present, should have a direct communication and functional reporting to the board and audit committee (if there is no separate risk committee).
16. In Slovenia, the establishment of a separate risk management committee has been made mandatory for banks and is voluntary for the rest of the companies.
17. In South Africa, public companies and public interest companies must have a Social and Ethics Committee, which is tasked with reviewing sustainability issues.
18. In the United Kingdom, although the Code recommends that audit committees cover risk management, it allows for the use of risk committees and for splitting the function across separate audit and risk committees.
19. In the United States, the listing requirement establishing board responsibilities for risk management is applicable only for NYSE‑listed companies.
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles; “-” = absence of a specific requirement or recommendation; “*” = board recommendation or approval for submission to shareholders’ final approval, ratification or certification. Please note that the provisions related to the internal audit and control function are covered under Table 4.2.
1. In Argentina, while Law 26 831 contains provisions establishing requirements for the approval and review of external auditor appointment, the new Corporate Governance Code recommends that the audit committee gives an opinion on the board’s proposal for the appointment of external auditors.
2. In Australia, under Section 327A of the Corporations Act 2001, the directors of a public company must appoint an auditor of the company within one month after the day on which a company is registered as a company unless the company at a general meeting has appointed an auditor. Directors may also replace a casual vacancy in the office of auditor under Section 327C. In both situations, the auditor holds office until the company’s first (or next) AGM.
3. In Austria, the audit committee is responsible for overseeing the audit of the financial statements, examining and monitoring the independence of the auditor, reporting to the supervisory board on the result of the audit and implementing the procedure for selecting the auditor (taking into account the appropriateness of the fee), including a recommendation on the auditor’s appointment to the supervisory board.
4. In Canada, Section 2.3(2) of National Instrument 52‑110 Audit Committee provides that an audit committee must recommend to the board of directors: a) the external auditor to be nominated for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the issuer; and b) the compensation of the external auditor.
5. In Chile, powers and duties of the directors’ committee (with functions equivalent to an audit committee) include: a) proposing to the board of directors names for the external auditors that will be suggested to the shareholders’ meeting, b) examining the reports of the external auditors and pronouncing an opinion on them prior to the presentation to the shareholders for their approval; and c) informing the board of directors regarding the convenience of hiring or not the external audit company for services that are not part of the external audit, when they are not prohibited, with attention to whether the nature of such services may generate a risk of loss of independence, among others. A new law also gives the directors’ committee the power to provide an opinion regarding the company’s ordinary related party transaction policy.
6. In Costa Rica, according to Article 4 of the Regulation of External Auditors (CONASSIF Agreement 01‑10), the board must appoint the external auditor.
7 In Czechia, according to Section 43(2) of the Auditors Act, the external auditor is recommended by the supervisory board, taking into account the suggestion of the audit committee.
7. In Estonia, according to Article 98 of the Auditors Activities Act, the function of an audit committee is to monitor and analyse the process of auditing of annual accounts or consolidated accounts. In particular, an audit committee is required to give an overview of the results of the statutory audit and their work to the body that elected or the person that appointed its members and make proposals regarding the appointment or removal of an audit firm.
8. In Finland, according to the Companies Act, the annual general meeting decides on the appointment and remuneration of the auditor. According to the Finnish Corporate Governance Code, the board of directors can establish an audit committee to, among other things, prepare the appointment of the company’s auditor. If there is no audit committee, the preparation of these tasks is the responsibility of the entire board or of another committee appointed by the board. In practice, the audit committee prepares the board’s proposal for the auditor and the auditor’s fee and the annual general meeting may, for example, decide that the auditor’s fee is to be paid according to the auditor’s invoice, in accordance with the procurement principles approved by the audit committee.
9. In France, the audit committee recommends a choice of auditors for election by the general assembly.
10. In France, the audit committee’s role in the selection of the external auditor is undertaken through tender offers.
11. In Hong Kong (China), according to the Companies Ordinance, the directors of a company may appoint the auditor of the company for its first financial year at any time before the annual general meeting (section 395(2)). The directors may also appoint an auditor to fill a casual vacancy in the office of auditor of the company (section 397(1)).
12. In Germany, the supervisory board can delegate the setting of fees to the audit committee.
13. In Hungary, Section 3:291 (1) of the Civil Code requires setting up an audit committee to assist the supervisory board or management board in the selection of the auditor and in its co‑operation with the auditor.
14. In India, in the case of state‑owned companies, appointment of the statutory auditor is done by the Comptroller and Auditor General of India whereas for other companies, appointment is by shareholders. For listed entities, the role of the Audit Committee with regard to external auditors, includes, inter-alia: i) making recommendations for appointment, remuneration and terms of appointment of auditors of the listed entity, and ii) reviewing and monitoring the auditor’s independence and performance, and effectiveness of audit process.
15. In Indonesia, according to OJK Regulation No. 13/POJK.03/2017, the audit committee provides a recommendation to the board of commissioners (BOC) on the appointment/removal of the external auditor, as well as on the audit fees and the scope of audit. The board of commissioners may appoint the external auditor if the shareholders mandate the board of commissioners through the AGM to do so based on a recommendation from the audit committee.
16. In Ireland, the board may appoint the auditors in certain cases including to fill a vacancy (Companies Act, Section 384).
17. In Ireland, the audit committee submits a recommendation to the directors for the appointment of external auditors (Companies Act, Sections 1551(8) and 1513).
18. In Israel, the shareholders have the primary responsibility to appoint an external auditor. However, the board may appoint the first external auditor at any time before the first annual general meeting.
19. In Israel, the general meeting appoints and removes the external auditor and approves the audit fees. However, in public companies, when removal of the external auditor or non-renewal of his appointment is on the general meeting’s agenda, the audit committee is required to express its position on this matter, after giving the external auditor a reasonable opportunity to present his position to it. In addition, the audit committee (both in public and private companies) is required to examine the audit fees, to review the audit’s scope, and to present its recommendations on those matters to the annual meeting or to the board if the general assembly has authorised it to make decisions in this regard.
20. In Korea, for listed companies with total assets valued at KRW 2 trillion or more, the audit committee shall appoint an accounting corporation or audit team. For other listed companies, the appointment shall be made by either the audit committee, the auditor, the company or the general meeting of employees depending on the size, type, etc. of the company. When the company appoints an auditor, it shall report it to the regular general meeting of shareholders convened after the appointment or shall notify or publicly announce it to the shareholders.
21. In Lithuania, the audit committee is tasked with overseeing the audit of the financial statements, evaluating and monitoring the auditor's independence, reporting the audit results to the supervisory board, and implementing the auditor selection procedure (considering the appropriateness of the fee), which includes a recommendation for the auditor's appointment to the supervisory board.
22. In Malaysia, the audit fees may be determined by the board, as provided for under the Companies Act 2016. Guidance 9.3 of the Malaysian Code on Corporate Governance (MCCG) recommends that the audit committee in assessing the suitability, objectivity and independence of the external auditor should consider among others, the appropriateness of the audit fees.
23. In Mexico, provisions regarding the appointment of external auditors by the board are stated in Articles 28, 42 and 43 of the Securities Markets Law. Besides, criteria for selection, monitoring and removal are provided by the Auditors’ Provisions. In addition, the Corporate Governance Code encourages the audit committee to recommend to the board the candidates for external auditors, the conditions of employment and the scope of professional work and monitor their compliance. Similarly, the Code recommends the approval of those additional services to those of audit that will be provided by the external auditors.
24. In Peru, according to Article 114 of the General Corporation Law, the general shareholder meeting designates the external auditor unless it chooses to delegate the appointment to the board. Also, in accordance with Principle 27 of the Code of Good Corporate Governance, the general shareholder meeting, at the board’s proposal, designates the external auditor. In practice, in companies having established an audit committee as recommended in the Code, said committee can give an opinion and/or participate in the appointment process of the external auditor.
25. In Poland, Article 130 of the Act on Statutory Auditors of 11 May 2017 requires the audit committee to prepare the policies/framework of selection procedures of the external auditor. The committee also prepares recommendations for the selecting body, including preferred choice (at least two viable choices should be recommended, one of them as reasoned preference according to Article 16 of the EU regulation 537/2014. The preferred auditor should then take part in the selection as one of the options).
26. In Romania, the Bucharest Stock Exchange CGC provides that the audit committee should monitor the independence and objectivity of the external auditor. The Committee should approve a policy on non-audit services permitted by the external auditor and ensure its implementation. The Committee’s findings on the independence should be made public in the annual report. The audit committee should discuss the annual work plan with the external auditor, covering the scope and materiality of the activities to be audited. The audit committee should meet with the external auditor whenever necessary to discuss the issues identified and to monitor the quality of the services provided.
27. In Saudi Arabia, according to Art. 78 of the Corporate Governance Regulation, the General Assembly appoints the Company’s external auditor based on a recommendation from the Board, provided that the following requirements are met: i) the nomination shall be based on a recommendation from the audit committee; ii) the external auditor shall be authorised by the competent authority; iii) the external auditor’s interests shall not conflict with the interests of the company; and iv) the number of nominees shall not be less than two.
28. In Singapore, the board of directors must, within three months after incorporation of the company, appoint an external auditor who will hold office until the conclusion of the first shareholders annual general meeting. The appointment of external auditors will subsequently be approved at the annual general meeting by shareholders. Furthermore, the Listing Rules require a change in auditing firm to be approved by shareholders at a general meeting. The Code of Corporate Governance also recommends that the audit committee should make recommendations to the Board on: i) the proposals to the shareholders on the appointment and removal of external auditors; and ii) the remuneration and terms of engagement of the external auditors. The Practice Guidance of the Code of Corporate Governance further recommends that for appointments and re‑appointments of external auditors, the audit committee should evaluate the performance of the external auditor, taking into consideration the Audit Quality Indicators Disclosure Framework published by the Accounting and Corporate Regulatory Authority (ACRA).
29. In the Slovak Republic, in accounting entities that have an audit committee established or in which the supervisory board performs the functions of the audit committee, the board of directors submits to the general meeting or members’ meeting a proposal for the approval or dismissal of the auditor based on the recommendation of the audit committee or supervisory board. If the accounting entity does not have a board of directors, a general meeting or a members’ meeting, the procedure for approving and recalling the auditor of the accounting entity shall be established by a special regulation.
30. In Switzerland, the responsibility for the proposal for (re)election to the general meeting lies with the entire board of directors.
31. In Switzerland, the audit committee should assess the performance and the fees charged by the external auditors and ascertain their independence, critically assess the appropriateness of the external audit engagement period on a recurring basis, as well as examine the compatibility of the auditing responsibilities with any consulting mandates. See FAOA Audit Committee Guide, 2nd Edition.
32. In the United Kingdom, legislation requires all companies with securities traded on regulated markets, as well as all deposit holders and insurers, to have an audit committee to select the auditor for the board to recommend to the shareholders. An exemption from having an audit committee is available for subsidiaries of other companies subject to the same framework. For the largest public companies, the board must accept the audit committee’s recommendation, and for others, the shareholders must be informed of any departure by the board from the recommendation. For the largest public companies, the board is also bound by the audit committee’s recommendation of the auditor’s fees and decision as to the scope of the audit, though, for all companies, the fees must be recommended to the shareholders.
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles;“-” = absence of a specific requirement or recommendation.
Provisions for auditor rotation refers to the requirements or recommendations for listed companies to rotate their external audit providers after a given period. This table captures auditor rotation requirements applicable to audit firms and not lead or partner auditors or others on the audit team. Time periods shown in the table do not include additional periods provided for joint audits except as specified in footnotes.
Provisions for audit partner rotation refers to the requirements or recommendations for listed companies to rotate specifically the audit partner after a given period.
Prohibitions or restrictions on non-audit services refers to the rules prohibiting or restricting a statutory audit firm/external auditor from providing non-audit services to any listed company for which it is the statutory auditor (e.g. tax services).
Role of the audit committee in pre‑approving allowed non-audit services refers to the rules allowing a statutory audit firm/external auditor to provide any non-audit service that is not explicitly prohibited to the audited listed company, based on the approval of the audit committee following an assessment of the threats to the audit firm/auditor’s independence and the safeguards in place to mitigate those threats.
European Audit Regulation requires public interest entities to rotate their audit providers at least every 10 years, with a possibility to extend this period to a maximum of 20 years where a public tender is held after 10 years, or 24 years for joint audits.
1. In Australia, an individual can play a significant role in the audit of a particular listed company (as an individually appointed auditor, lead auditor or review auditor) for five successive years or five out of seven successive financial years (the 5/7 rule). The period may be extended either through regulatory relief or by the board. The board may extend an eligibility term by no more than two successive years. For listed companies, which are required to have an audit committee under the Listing Rules, this must be in accordance with a recommendation provided by the audit committee.
2. In Bulgaria, since September 2024, the maximum term before rotation of the audit firm is seven to ten years, in accordance with the same extension provided by an amendment of Regulation (EU) No. 537/2014.
3. In Canada, Section 162 of the Canada Business Corporations Act, requires auditors to be appointed at each annual meeting.
4. In Canada, Section 2.3(4) of National Instrument 52‑110 Audit Committee states that an audit committee must pre‑approve all non-audit services to be provided to the issuer or its subsidiary entities by the issuer’s external auditor.
5. In Chile, it is presumed that the partners of the external audit company lack independence of judgment with respect to an audited corporation when they conduct the audit of the entity for a period that exceeds five consecutive years. Furthermore, the directors’ committee, among its duties and powers, should inform the board of directors about the convenience of hiring or not hiring the external audit company for the provision of other services, provided that those services are not among the ones that the Securities Market Law explicitly establishes as incompatible with the external audit service for the same entity.
6. In China, in principle, the consecutive engagement of the same accounting firm by a state-owned enterprise shall not exceed eight years; the engagement period may be appropriately extended, provided that the consecutive engagement period shall not exceed ten years.
7. In Hong Kong (China), rotation requirements for individuals acting as engagement partner, responsible for the engagement quality control review and/or acting in any other key audit partner role are provided by the Hong Kong Institute of Certified Public Accountants’ Code of Ethics for Professional Accountants. The maximum term before rotation is seven years, and the cooling off period before re‑appointment is at least two years.
8. In Hungary, the maximum is for seven years.
9. In India, listed entities cannot appoint an individual as auditor for more than one term of five consecutive years and an audit firm as auditor for more than two terms of five consecutive years. Shareholders of a company may resolve to provide that in the audit firm appointed by it, the auditing partner and the team shall be rotated at such intervals as may be resolved by the shareholders. In the case of audits of listed entities, the auditing partner should be rotated after a pre‑defined period, normally not more than seven years.
10. In Indonesia, partner rotation, but not audit firm rotation, is required by OJK regulation No. 9/POJK.03/2023. Audit services for annual historical financial information from the same Audit Partner shall be limited for seven cumulative years. The restriction on the use of audit services also applies to the audit partner of the audit firm acting as the engagement partner, who must have a cooling-off period of five consecutive reporting years. The Audit Partner of audit firm acting as the person responsible for the quality control review of the engagement must have a cooling-off period of three consecutive reporting years; and other audit engagement partners must have a cooling-off period of two consecutive reporting years.
11. In Italy, audit firms must rotate every nine years, and key audit partners must rotate every seven years. In the case of an appointment of a statutory auditor (natural person), the term for rotation is seven years.
12. In Japan, when an audit firm provides non-assurance services in addition to audit services to Public Interest Entities, the following elements are required under the Code of Ethics of the Japanese Institute of Certified Public Accountants (JICPA): i) audit firms should provide information on non-guaranteed services to the company auditors, etc. of Public Interest Entities that intend to provide such services; ii) non-guaranteed business cannot be provided unless consented to by the Audit & Supervisory Board Members, etc.
13. In Malaysia, the Malaysian Institute of Accountant By Laws imposes a cooling off period of five years for the engagement of the audit partner after serving the company for seven years. For the provision of non-audit services, while there is no specific prohibition or restriction on such services, the Listing Requirements prescribe that a listed issuer shall disclose the amount of fees for the non-audit services rendered by the listed issuer’s auditor, and where the fees are significant, the nature of the non-audit services rendered. Further, Guidance 9.3 of the Malaysian Code on Corporate Governance recommends that the audit committee establish policies and procedures that address, among others, the requirement for non-audit services to be approved by the audit committee before they are rendered by the auditor.
14. In Mexico, the Auditors’ Provisions state in Article 7 the maximum term for the partner in charge of the audit of a listed company/financial entity, for the revisor of the quality control and the lead auditor in charge of the audit of a listed company/financial entity, as well as for the cooling off period. In addition, the Corporate Governance Code states in Practice 27 that the partner and the team should rotate every five years, at the most. Additionally, Article 28, Section III of the Securities Markets Law establishes that the board is responsible for contracting of the legal entity that provides the external audit services and, where appropriate, of additional or complementary services to those of external audit.
15. In New Zealand, cooling-off periods are based on the PES 1 International Code of Ethics for Assurance Practitioners (including International Independence Standards) (New Zealand) which outlines different cooling-off periods: five years for an engagement partner, three years for an individual responsible for the engagement quality control review, and two years for other key audit partners.
16. In Peru, the Corporate Governance Code recommends that the company should maintain a renewal policy for its independent auditor or its audit firm. The audit firm’s work team must rotate at most every five years. In addition, the Corporate Governance Code indicates that the board of directors may agree to hire the audit firm or the independent auditor to perform other services different from those of the audit of accounts.
17. In Portugal, the auditor may be appointed for a maximum of two or three terms of office, depending on if they are of four or three years, respectively. This maximum period (eight or nine years) may be extended up to ten years, if approved by the general meeting of shareholders under proposal of the supervisory body. The cooling-off period is four years for audit firms and three years for the key audit partner(s) responsible for carrying out the statutory audit.
18. In Romania, the financial auditor or key audit partner shall not take on a key position in the management of the audited entity, including non-executive member in the administrative/supervisory body and a member of the audit committee or of a body with equivalent powers before the expiry of a period of at least one year (two years, in the case of statutory audits of public interest entities) from the termination of his activity. Key audit partners shall cease their participation in the statutory audit of the audited entity within a maximum of seven consecutive years from the date of appointment. They may participate again in the statutory audit of the audited entity only after three years have passed since the cessation.
19. In Singapore, the Listing Manual requires audit partners to be appointed for a maximum of five years by an issuer before rotation (“time on period”) and a minimum two-year period before they are re-appointed by the same issuer (“cooling-off period”). The ACRA Code of Professional Conducts and Ethics for Public Accountants and Accounting Entities also prescribes a time on period and cooling-off period for audit partners of public interest entities of seven years and five years respectively. As the stricter of the two requirements apply, the time on and cooling-off period for audit partners for listed companies is effectively five years each.
20. In Singapore, the Listing Manual does not prohibit or restrict the use of non-audit services. However, the aggregate amount of fees paid to auditors, broken down into audit and non-audit services, must be disclosed in the annual report. The audit committee must also confirm that it has reviewed all non-audit services provided by the auditors and that they would not, in the audit committee’s opinion, affect the independence of the auditors. The Practice Guidance of the Code of Corporate Governance also recommends that the audit committee assesses the independence and objectivity of the external auditors, taking into consideration the aggregate and respective fees paid for audit and non-audit services.
21. In the Slovak Republic, unless otherwise stipulated by a special regulation, a statutory auditor and an audit firm that carry out statutory audit in a public-interest entity shall conclude an audit contract with the public-interest entity for a period of at least two years and maximum of three years if the audit contract is concluded with the entity for the first time. The maximum duration of every subsequent concluded audit contract with the public-interest entity may be no more than three years if the statutory auditor is approved by the general meeting of shareholders, general meeting of members or any other body of the audited entity which is approving and dismissing the statutory auditor.
22. In Slovenia, Article 45(4) of the Auditing Act provides that a certified auditor shall be prohibited from auditing an individual legal person, if, as key audit partner, the certified auditor has audited the financial statements of a legal person for a maximum of seven consecutive years following the date of first appointment, and if following the last audit, two years have not passed for which another key audit partner audited the financial statements.
23. In Switzerland, the provisions for auditor rotation deal with the obligation of internal rotation with respect to the Lead Engagement Partner (individual auditor). It is not to be understood as external rotation (i.e. audit firm rotation). The Lead Engagement Partner is appointed for a period of one up to three financial years. Its term of office ends on the adoption of the annual accounts for the final year. Re‑appointment is possible. (Art. 730a para. 1 Code of Obligations). The Audit Committee is also recommended to examine the compatibility of the auditing responsibilities with any consulting mandate (economiesuisse, Swiss Code of Best Practice for Corporate Governance, 2022, para. 23).
24. In Switzerland, the person who manages the (ordinary) audit may exercise the mandate for seven years at most. The same mandate may only be accepted again after an interruption of three years (Art. 730a para. 2 Code of Obligations).
25. In Türkiye, CMB’s audit communique refers to the Turkish Commercial Law No. 6 102 and Public Oversight Accounting and Auditing Standards Authority (KGK) regulations with regard to audit rotation. According to the relevant KGK “Audit Regulation”, both audit firm and auditor are subject to the same rotation rules. Thus, the auditor should not provide any audit services to the same customer for which the auditor provides audit services for seven years within the past ten-year period. Auditors’ maximum service period to the same customer is calculated regardless of the audit firm they worked for.
26. In the United States, partner rotation, but not audit firm rotation, is required as is originally provided in Section 203 of the Sarbanes-Oxley Act of 2002 (now provided by statute in the Securities Exchange Act of 1934 Section 10A(j)) and Rule 2‑01(c)(6) of Regulation S-X). While lead and concurring partners (or engagement quality reviewers) are required to rotate off an engagement after a maximum of five years and must be off the engagement for five consecutive years, other audit partners are subject to rotation after seven years on the engagement and must be off the engagement for two consecutive years. In addition, the role of an audit committee in pre‑approving allowed non-audit services is set forth in laws and regulations and is not based on a threats and safeguards approach.
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles; “-” = absence of a specific requirement or recommendation; N/A = not applicable.
Professional accountancy body refers to the professional body responsible for providing regulation and oversight over individuals and firms operating in the accountancy industry.
Public oversight body refers to the public body responsible for supervising the audit profession and monitoring compliance with requirements for auditors’ independence and conduct.
Quality assurance system refers to the quality assurance reviews or inspections carried out for audits of all listed entities that prepare financial reports.
Investigative and administrative disciplinary system refers to investigative and disciplinary procedures carried out for professional accountants.
1. In Australia, each year, the government publishes a legislative instrument setting out ASIC’s regulatory costs for the previous financial year and how they are allocated. ASIC then issues levy notices to recover most of its regulatory costs from regulated entities. Regulatory costs are also recovered through fees for service pursuant to the Corporations (Fees) Regulations 2001.
2. In Belgium, the costs supported by the FSMA for the functioning of the CSR-CTR as well as the costs for the functioning of the sanctions committee of the FSMA as regards the audit profession are covered by fees from the profession. It is a legal obligation for the members of the profession to contribute via their fees.
3. In Brazil, the CVM generates its own revenues charging fees and fines from capital market participants and collecting resources from legal settlements under the Securities Act’s consent decree clause. However, all resources must be sent to the central government to be included in the federal annual budget.
4. In China, according to the chapter of the CICPA, its financial resources come from membership dues, donations, subsidies from the government, revenue from the operating activities and services provided by the Institute and other revenues.
5. In Colombia, the Central Board of Accountants (CBA) is supported by the Technical Council for Accounting (TCA) on topics related to the adoption of law and standards.
6. Costa Rica is transitioning from 80% central bank funding and 20% from regulated entities prior to 2024 to a 50/50 split to be achieved by 2027.
7. In Greece, if the levied fees are not sufficient to cover HAASOB’s operating costs, then HAASOB is subsidised by the state budget.
8. In Indonesia, the PPPK is funded from the state budget, while the OJK is self-funded (levies from financial institutions and entities under its supervision and fines and/or state budget. If self-funded are insufficient to meet the OJK expenditures, the deficit can be financed by the state budget.
9. In Ireland, Recognised Accountancy Bodies (RABS) refer to the professional bodies which are approved by the Companies Act 2014 and monitored by the IAASA as responsible for licensing their members to perform audits: the Association of Chartered Certified Accountants (ACCA), the Institute of Chartered Accountants in Ireland (ICAI) and the Institute of Certified Public Accountants in Ireland (CPA).
10. In Israel, the IPRI is a subsidiary of the ICPAI.
11. In Italy, the MEF adopts audit standards having heard the opinion of CONSOB.
12 In Lithuania, audits are carried out in accordance with international auditing standards.
12. In Malaysia, the AOB is funded primarily from the registration fees of audit firms and individual auditors. In addition, the AOB also receives funding from the Securities Commission Malaysia.
13. In New Zealand, the External Reporting Board (ERB) is an Independent Crown Entity that develops and issues reporting standards on accounting, audit and assurance, and climate, for entities across the private, public and not-for-profit sectors.
14. In Peru, according to Article 1 of SMV´s Organic Law, the SMV supervises compliance with international auditing standards by auditing firms authorised by any of the Peruvian public accountants associations and hired by natural or legal persons subject to SMV oversight. The SMV may issue general provisions consistent with international auditing standards and require any information or documentation to verify such compliance.
15. In Peru, SMV’s Organic Law includes the possibility of obtaining funding from the central government and fines from wrongdoers; nevertheless, the main source of resources of the SMV is the income from the contributions of issuers and supervised entities.
16. In Poland, PANA is directly funded from fees paid by audit firms. It may also be funded from the state budget, if needed.
17. In Romania, ASPAAS is a public institution, with legal personality, with the role of ensuring the supervision of the statutory audit in the public interest and operates under the subordination of the Ministry of Finance.
18. In Saudi Arabia, the Capital Market Law (CML) states that government funds may be used as a source of financial resources for the CMA. However, this has not been the case in practice and the CMA remains fully self-funded from fees for services and commissions charged by the authority and fines and financial penalties imposed on violators.
19. In Singapore, ACRA is a self-funded regulatory agency. Its main sources of income are from statutory fees payable under the Acts administered by ACRA (e.g. company, business, public accountant and corporate service provider registration and related fees) and fees from provision of information services related to such entities.
20. In Switzerland, the FAOA is funded by fees levied off registered individuals and firms (for its decisions, inspections and services). To cover the oversight costs that are not covered by fees, the FAOA charges an annual oversight levy to audit firms under state oversight on the basis of the costs incurred in the accounting year in question (see Art. 21 Auditor Oversight Act and Art. 37 Auditor Oversight Ordinance). Furthermore, the professional body EXPERTsuisse issues auditing standards. However, the FAOA has the competence to approve, amend or derogate existing auditing standards or to adopt its own standards. This competence is limited to standards applying to financial audits of Public Interest Entities (Art. 16a para. 2 Auditor Oversight Act).
21. In Türkiye, KGK is in charge of authorising and registering external auditors. However, external auditors shall also be authorised by the CMB to be able to audit public companies. In this respect, the CMB may inspect and impose administrative fines to external auditors if necessary.
22. In the United Kingdom, professional bodies which are approved and monitored by the FRC as responsible for supervising the work of their member auditors and audit firms include: the Association of Chartered Certified Accountants (ACCA), Chartered Accountants Ireland (ICAI), the Institute of Chartered Accountants in England and Wales (ICAEW), and the Institute of Chartered Accountants of Scotland (ICAS).
23. In the United States, funding for the PCAOB is specified by law and regulation and is derived from fees levied on issuers, brokers and dealers, and audit firms.
Key: Required = specifically required by law or regulation. Otherwise “optional” or “recommended” are used; ( ) = recommendation; “-” = not required or not allowed.
1. In Canada, the majority requirement applies with respect to publicly-traded companies in uncontested elections, through the operation of federal legislation as well as provincial securities exchange rules.
2. In China, besides the election of directors, a cumulative voting system is required in the election of supervisors if a listed company whose single shareholder and its person acting in concert hold 30% or more shares.
3. In Finland, in an election, the person receiving the most votes shall be elected. In practice, the general meeting decides before the election if a majority of votes is required for the election.
4. In Greece, a shareholder can directly appoint one or more board members, provided that they do not exceed two-fifths of the total number of board members.
5. Under Italy’s use of a list voting system, all board seats except those reserved to minority shareholders are elected from the list receiving the most votes (absolute majority is not required).
6. In Portugal, a company’s articles of association can establish that if a minority of shareholders holding at least 10% of the voting rights votes against the proposed list of candidates, it has the right to appoint at least one member of the board of directors. In such a case, the election shall be by a majority of said shareholders.
7. In Portugal, a company’s articles of association can allow that a maximum of one-third of the board of directors is appointed by groups of shareholders, provided that none of these groups holds shares representing more than 20% and less than 10% of the voting rights.
8. In Romania, for the first convocation of the ordinary general shareholder meeting, the quorum required is at least one-quarter of the total number of voting rights, with decisions by majority of votes. Articles of association may provide for higher quorum and majority. If the conditions for the first meeting are not met, the general shareholder meeting will meet at a second convocation regardless of the quorum, with decisions by majority of votes. Articles of association may not provide for minimum quorum or a higher majority.
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles; “-” = absence of a specific requirement or recommendation.
1. In China, the nomination committee of the board of directors of the listed company is responsible for selecting and reviewing the candidates for directors and their qualifications and making recommendations to the board of directors.
2. In Indonesia, the information on the relationship of the candidate with the firm is required to oversee the independence of the commissioner.
3. In Italy, before board appointments occur, companies provide their shareholders with recommendations on the professional skills identified through the self-evaluation process. The nomination committee, which supports the board in the self-evaluation process, is also in charge of succession planning, of proposing candidates if directors have to be nominated during the mandate and, in general, of advising the board on its optimal composition (also in case the board presents a list of candidates for the subsequent board appointment).
4. In Peru, the SMV approved the “Guidelines for Qualification of Independent Directors”, with the purpose that companies with securities registered in the Securities Market Public Registry use the same criteria for their disclosures to the market on the independent condition of their directors. The Guidelines provide input to the issuers for their responses to the “Report on Compliance with the Code of Good Corporate Governance for Peruvian Companies” questions about independent directors and when a director qualifies as such.
5. In Romania, according to the BVB Code of Corporate Governance, the Board, through its Nomination and Remuneration Committee, if established, should monitor the nomination process of candidates for the position of board member. The nomination and remuneration Committee should, among others: i) review and recommend to the Board the size and composition of the Board and lead the development and ongoing review of the Board profile; ii) identify individuals qualified to become board members and members of the executive management, if requested; evaluate the candidates for executive management roles; and iii) evaluate the candidates proposed by the shareholders or by Board members for a director role and inform the general shareholder meeting accordingly.
6. In Singapore, the SGX Listing Manual provides that where a candidate is proposed to be appointed for the first time or re-elected to the board, the issuer must provide information including the director’s name, working experience, relationship with the issuer, shareholding interest in the issuer and other specified information. An announcement must be made when a director is appointed with the same information. The Listing Manual requires directors to have appropriate experience and expertise to manage the group’s business. A director without prior experience as a director of an issuer must undergo training as prescribed by the Exchange. If the nominating committee is of the view that training is not required as the director has other relevant experience, the basis of their assessment must be disclosed.
7. In Türkiye, the Corporate Governance Principles require the independent director candidates to be first evaluated by the nomination committee and afterwards reported to the board. For a certain group of companies (relatively higher market capitalisation and shares in free float), the short list of candidates shall be notified to the Capital Markets Board 60 days prior to the general assembly meeting.
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles; “-” = absence of a specific requirement or recommendation.
1. In Australia, recommendations state that severance payments are not to be provided to board members (specifically, non-executive directors). There is no quantitative SPC for management, rather severance pay is addressed by a requirement relating to member approval in prescribed circumstances, and recommendations that severance payments be agreed in advance and that there should be no payment for removal for misconduct.
2. In Finland, the remuneration of the board and CEO must be based on the remuneration policy reviewed by the Annual General Meeting (advisory decision).
3. In India, the Companies Act requires that the remuneration of all directors taken together should not exceed 11% of net profits of the company (if the company does not have profits, there are absolute rupee limits specified under the Companies Act). Any remuneration exceeding the limits require shareholder approval.
4. In New Zealand, the NZX Corporate Governance Code recommends that an issuer has a remuneration policy for executives which outlines the relative weightings of remuneration components and relevant performance criteria.
5. In Romania, the remuneration policy shall be presented for approval to the general shareholder meetings. Levels of remuneration for executive management members and key performance indicators for variable (performance-based) part of the remuneration should be set in advance, be measurable and appropriate in relation to the strategy and risk appetite, the economic environment and the pay and conditions of employees within the Company. In particular, they should include indicators related to non-financial performance and appropriate sustainability objectives.
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles; “-” = absence of a specific requirement or recommendation.
SOP/AA = choice between shareholder approvals or articles of association.
Advisory/Binding = Irrespective of whether a shareholder vote is required or recommended, these terms set out whether such votes are advisory or binding with respect to remuneration policies or amounts.
Binding* = indicates binding approval only required if a company uses incentive pay.
1. In Canada, disclosure requirements related to the remuneration policy are written in legislation, but not yet in force.
2. In Canada, an advisory vote will be required once the provision comes into force, on a date to be fixed by order of the Governor in Council. The provision was enacted but is not yet in force.
3. In Colombia, the recommendation is that the remuneration policy for the board should always be approved by shareholders. For key executives, the remuneration policy should always be approved by the board of directors.
4. In Costa Rica, in accordance with the Corporate Governance Regulation, remuneration policy for board and key executives should always be approved by shareholders if it considers variable performance‑based bonuses in company shares.
5. In Estonia, the resolution of shareholders is advisory for the supervisory board, unless otherwise provided by the articles of association.
6. In Finland, approval by shareholders is only applicable for members of the Board and Supervisory Board.
7. In Hong Kong (China), the Listing Rules require issuers to disclose the aggregate remuneration of the five highest paid individuals in their annual reports. It is not necessary to disclose the identity of the highest paid individuals unless any of them are directors of the issuers. The Code recommends disclosure of any remuneration payable to members of senior management, on an individual and named basis, in issuers’ annual reports.
8. In India, remuneration of every director is subject to shareholders’ approval. Accordingly, companies disclose remuneration to the public as part of this process. Further, the Companies Act 2013 specifies caps with respect to overall and individual remuneration of directors. For listed entities, shareholders’ approval is required when the annual remuneration payable to a single non-executive director exceeds 50% of the total annual remuneration payable to all non-executive directors.
9. In Ireland, shareholders vote annually on the remuneration report which contains details of directors’ pay.
10. In Israel, binding approval for the level and amount of remuneration is required if it is not within the remuneration policy and for the CEO (in any case). The remuneration policy is subject to shareholder approval.
11. In Italy, the general meeting is in charge of approving the total remuneration (basis compensation) of the members of the board of directors and, if any, of the executive committee. Moreover, the remuneration of executive board members falls within the scope of authority of the board of directors, unless the bylaws provide otherwise.
12. In Korea, according to Article 159 (Submission of Business Report, etc.) of the Financial Investment Services and Capital Markets Act, a corporation subject to business reporting shall state in its business report the remuneration of each executive officer and detailed standards for and methods of calculation thereof (limited to when the remuneration of an executive officer is not less than the amount prescribed by Presidential Decree, which shall not exceed KRW 500 million). According to Article 388 (Remuneration for Directors) of the Commercial Act, if the amount of remuneration to be received by directors has not been determined by the articles of incorporation, such amount shall be determined by a resolution of a general meeting of shareholders.
13. In Lithuania, according to the Corporate Governance Code, the general meeting of shareholders should approve both the amount of remuneration to members of the supervisory board in relation to their participation in supervisory board meetings, and the amount of remuneration to the members of the management board for their activity and participation in the meetings of the management board.
14. In Malaysia, Practice 8.1 of the Malaysian Code on Corporate Governance (MCCG) recommends detailed disclosure on name basis of the remuneration of individual directors, and Practice 8.2 of the Malaysian Code on Corporate Governance (MCCG) recommends that listed issuers disclose the remuneration component of the top five senior management in bands of MYR 50 000. Step-up Practice 8.3 of the MCCG further recommends listed issuers to fully disclose the detailed remuneration of each senior management personnel.
15. In Mexico, listed companies must disclose in the annual report the total amount of all types of benefits received by the board members, key executives, and related individuals of the issuer and its subsidiaries during the last fiscal year. Additionally, the total amount allocated or accrued for pension, retirement or similar plans for these individuals must be provided. A description of the types of compensation and benefits they receive collectively should also be included. Furthermore, any agreements or programmes allowing board members, key executives or employees to participate in the issuer's equity must be disclosed, detailing their rights and obligations, including the mechanism for share distribution and the pricing method. (Issuers’ Provisions, Annex N pp. 14 - 15)
16. In New Zealand, the NZX Listing Rules applying to listed issuers impose an additional requirement for directors’ remuneration to be approved by ordinary resolution of the shareholders. That requirement does not apply to remuneration of executive directors in their capacity as executives.
17. In Poland, in the case of banks, investment fund management companies and brokerage houses, the remuneration policy and levels are prepared by the management and approved by the supervisory board (the approval is binding).
18. In Saudi Arabia, a description of the necessary details with respect to the remunerations and compensations granted to each of the following, separately: a) board members; b) five senior executives who have received the highest remuneration from the company, provided that the chief executive officer and chief financial officer are among them; C) members of committees.
19. In Singapore, Principle 8 of the Code of Corporate Governance requires companies to be transparent on its remuneration policies. Listing Rule 710 requires compliance with the principles of the Code. The Listing Manual states that an issuers’ articles of association must contain a provision stating that fees payable to directors shall not be increased except pursuant to a resolution passed at a general meeting, where notice of the proposed increase has been given in the notice convening the meeting. The Listing Manual requires the annual report to contain the names, amounts and breakdown of remuneration paid to each individual director and the chief executive officer.
Key: L = requirement by law or regulations; R = requirement by the listing rules; C = recommendation by the codes or principles; “-” = absence of a specific requirement, recommendation, quota or target; N/A = not applicable.
1. In Argentina, the Corporate Governance Code approved by General Resolution 797/2019 recommends that companies disclose the composition of their boards. However, at each opportunity to elect directors, companies must disclose board composition through the CNV’s website.
2. In Australia, the Workplace Gender Equality Act 2012 applies to non-public sector employers with 100 or more employees in Australia. The Act requires such employers to make annual filings with the Workplace Gender Equality Agency disclosing their “Gender Equality Indicators”. These reports are filed annually covering the 12-month period ending 31 March.
3. In Australia, the Corporate Governance Principles and Recommendations do not set a numerical target, but recommend that each company should set its own numerical target.
4. In Bulgaria, in 2024, a Draft Law of the Law on Equality between Women and Men was published for public discussion. The proposed draft law implements the provisions of Directive (EU) 2022/2381. The Draft Act is expected to be adopted by the National Assembly in 2025.
5. In Canada, securities regulations in most provinces and territories require disclosure relating to the representation of women; for federally‑incorporated companies, disclosures follow a “comply or explain” model and include the representation of women, visible minorities, Indigenous and disabled persons.
6. In China, the Code of Corporate Governance of Listed Companies encourages the diversification of members of the board of directors. Listing rules require large listed companies to disclose gender composition of employees in sustainability reports.
7. In Costa Rica, Constitutional Court jurisprudence has interpreted national law and international commitments on the matter as summarised in Vote 13885‑2015 from 5 September 2015 “(…) opportunities for men and women shall be equal, therefore, the right to non-discrimination, sheltered by Article 33 of the Constitution, imposes upon the Administration the duty of appointing as equal as possible a number of women to public positions, which obviously includes politically appointed positions.”
8. In Croatia, every five years, the supervisory board should set and publish gender diversity targets for the supervisory and management boards, with a plan and annual progress updates. Amendments to the Corporate Governance Code, applicable from 1 January 2025, set target to “at least” 40% of members of the underrepresented gender on the supervisory board or across the supervisory and management boards.
9. In Finland, a company listed on Nasdaq Helsinki SE has to follow the Corporate Governance code according to the listing rules. According to the CG code, balanced representation of women and men must be reached in listed companies no later than 30 June 2026 (comply or explain). Until then, Recommendation 8 of Corporate Governance Code 2020 applies, according to which both genders shall be represented in the board of directors.
10. In Finland, according to the Finnish Limited Liability Companies Act, members of the underrepresented sex shall hold at least 40% of the board positions of a large, listed company by 30 June 2026.
11. In Germany, listed or co-determined companies are required to set individual targets for the executive board, the supervisory board and the two management levels below the board. In companies that are listed and subject to equal co-determination, a 30% minimum quota applies to supervisory boards. These companies are still required to set individual targets for the two management levels below the board. If the executive board of a listed and equally co-determined company consists of four or more persons, at least one woman shall be appointed to the board.
12. In Greece, Law 4706/2020 on Corporate Governance introduced mandatory quotas of 25%, and binding diversity criteria for the selection of directors. Greece adopted the provisions of Directive (EU) 2022/2381 with Law 5178/14.02.2025. The effective date for mandatory quota of 33% for listed companies that fulfil the criteria of the Directive (EU) 2022/2381 is 30 June 2026.
13. In Hong Kong (China), the latest enhancements to the Corporate Governance Code (in Appendix C1 of the Listing Rules) came into effect on 1 July 2025. Currently, the Listing Rules require a listed company to have a policy(ies) concerning diversity of board members and the diversity of its workforce (including senior management), and to disclose such policy(ies) in the corporate governance report. The Stock Exchange of Hong Kong Limited requires listed issuers to appoint at least one director of a different gender on the board. A listed company is also required to disclose and explain (i) its measurable objectives (e.g. targets, timelines) and succession measures to achieve gender diversity within the board, together with the results of its annual review of the implementation of the board diversity policy (including progress towards the listed company’s objectives); as well as (ii) the gender ratio of senior management and the workforce (excluding senior management), respectively, and any plans or measurable objectives (and progress on achieving such objectives). A listed company may also disclose any mitigating factors or circumstances which make achieving gender diversity across the workforce more challenging or less relevant. Listing applicants with a single gender board are not accepted and must appoint at least one director of a different gender before listing.
14. In India, every listed company and every other public company having paid – up share capital of INR 1 billion or more or turnover of INR 3 billion or more shall appoint at least one female director. Further, the top 1 000 listed entities (by market capitalisation) are required to have at least one female independent director.
15. In Indonesia, there is no law or regulation that governs the proportion of board diversity in terms of gender quota. OJK Circular letter No. 16/SEOJK.04/2021, as an implementing Rule of OJK Regulation No. 29/POJK.o4/2016 Concerning Annual Report on Issuers or Public Companies, requires Issues and Public Companies to disclose about the gender diversity covering gender composition in the Board of Directors, Board of Commissioners and employees.
16. In Ireland, Directive 2022/2381 on Gender Balance had not been transposed by the end of December 2024. It was transposed in May 2025 (S.I. No. 215 of 2025) and companies will be required by 30 June 2026 to comply with the 40% target set by the Directive in relation to non-executive directors. The optional target of 33% among all directors was not included.
17. In Israel, the gender representation requirement applies specifically to the appointment of external directors, and only when all board members who are not the controlling shareholder or their relatives are males.
18. In Israel, for SOEs, the Government Companies Law sets a target of appropriate representation for both genders on the board of directors. Until this goal is reached, the law provides that preference shall be given to directors of the other gender that is not yet suitably represented, to the extent possible under the circumstances.
19. In Israel, the regulator has the power to impose monetary fines on regulated persons and entities in certain circumstances, including when a company fails to nominate directors of both genders.
20. In Italy, Law 160/2019 establishes the gender quota (40%) and mandates its application over six subsequent board nominations, spanning nearly 18 years).
21. In Japan, employers with no less than 101 regularly employed workers must select one or more items from the list decided by law and disclose the statistical data about the achievement of the women’s active engagement in the company, and “the ratio of female workers in managerial positions” is included as one of the disclosure items. The employers, which disclose the ratio of female workers in managerial positions on their homepages and/or the government database, are also required to include the information in their Annual Securities Report.
22. In Japan, in addition to board members, auditors and executive officers, the aforementioned female officers may include non-statutory executive officers and their equivalents.
23. In Korea, under the Financial Investment Services and Capital Markets Act, disclosure on gender composition of boards in their business report is mandated for listed companies. Meanwhile, listed companies with total assets valued at KRW 2 trillion or more as of the end of the latest business year shall not have a board of directors made up of just one gender.
24. In Lithuania, by 30 June 2026, large companies must ensure that under-represented genders in the management and supervisory bodies of large companies account for at least 33% (but no more than 49%) of the company's management, board members and supervisory board.
25. In Luxembourg, sustained efforts are maintained to continue improving gender diversity on boards. A National Plan of Action on Gender Equality for all companies has been implemented by the government. Moreover, the X Principles of Corporate Governance established by the Luxembourg Stock Exchange establish in Recommendation 4.1 that “At least 40% of the underrepresented gender among non-executive directors or 33% among all directors should be represented in the Board.”
26. In Peru, the Report on Compliance with the Good Corporate Governance Code for Peruvian Corporations incorporates some questions addressing the participation of women in corporation boards.
27. In Romania, according to the Bucharest Stock Exchange CGC, the board should have an appropriate balance of skills, experience, gender diversity, knowledge and independence for it to effectively perform its duties and responsibilities. The board should have a policy in place on board and executive management diversity and should incorporate diversity requirements in the nomination policy.
28. In Singapore, the Listing Rules require listed companies to set and disclose a board diversity policy in their annual reports, with gender specified as an aspect of diversity that should be encapsulated within issuer’s board diversity policy. The Listing Rules also require listed companies to disclose their targets in their annual reports for achieving the stipulated diversity, accompanying plans and timeline.
29. In Switzerland, the thresholds for listed companies are set at 30% for women on the board of directors and 20% for women on the management board. If these thresholds are not met, companies will have to explain why in their remuneration report and indicate the measures planned to remedy the situation. The remuneration report will have to mention this information as of 1 January 2026 for the board of directors and as of 1 January 2031 for the management board.
30. In the United States, a number of states, such as Illinois, Maryland and New York, have disclosure mandates that require certain corporations to report to the state the gender composition of the board. Companies listed on the Nasdaq Stock Market, LLC had also been subject to director diversity disclosure requirements, but the rules were struck down by a federal court on 11 December 2024.
31. In the United States, although there are no federal quotas or voluntary targets, in 2018, California enacted a law that required a minimum of two women board members on any board of directors with five directors and at least three women board members on any board of directors with six or more directors. In 2023, a federal court held that this law was unconstitutional. Washington State Legislature enacted a 2020 law that requires certain public companies to have at least 25% of the directors be women, or the company must provide a board diversity discussion and analysis to its shareholders.
32. In recent years, other US states, such as Colorado, Illinois, Maryland, Massachusetts and Pennsylvania, have passed non-binding resolutions encouraging public companies to have women on the board of directors.
Women’s participation in managerial positions: Data on the female share of employment in managerial positions conveys the number of
women in management as a percentage of employment in management.
Women’s participation on boards of directors: “Board members” refers to all members of the highest decision-making body in the given
company, such as the board of directors for a company in a unitary system, or the supervisory board in the case of a company in a two-tier
system.
The average annual growth rate for women’s participation in managerial positions and on boards is provided only based on the years for which
data is available.
1. Source: International Labour Organisation, ILOSTAT database, SDG indicator 5.5.2 - Proportion of women in managerial positions (%) - Annual. Employment in management is defined based on the International Standard Classification of Occupations. This series refers to total management (category 1 of ISCO-08 or ISCO-88). This indicator is calculated based on data on employment by sex and occupation. For further information, see the SDG indicator metadata or ILOSTAT’s indicator description.
2. Source: Data on the gender composition of boards for Austria, Belgium, Croatia, Czechia, Estonia, France, Germany, Greece, Hungary, Iceland, Ireland, Latvia, Lithuania, Luxembourg, Netherlands, Norway, Poland, Portugal, Romania, Slovak Republic, Slovenia, Spain, Sweden, and the United Kingdom was obtained from European Institute for Gender Equality (EIGE). The companies covered are members (up to 50) of the primary blue-chip index, which is maintained by the stock exchange and represents the largest firms based on market capitalisation and/or trading volume. For further information, see the metadata.
3. Source: Data on the gender composition of boards for Australia, Brazil, Canada, Chile, China, Colombia, India, Indonesia, Israel, Japan, Korea, Mexico, New Zealand, Peru, Saudi Arabia, South Africa, Switzerland, Türkiye, and the United States was obtained from MSCI Women on Boards and Beyond 2024. MSCI data refers to the proportion of seats held by women on boards for companies covered by the MSCI ACWI index: an index of large- and mid-cap firms from developed and emerging economies (as of November 2024). For further information, see the MSCI ACWI Index.
4. For Argentina, data provided by the National Securities Commission of Argentina (CNV), covering 199 issuers of equity and debt securities under the general public offering regime. Issuers under the SME regime are excluded.
5. For Bulgaria, data provided by the Financial Supervision Commission (FSC), covering all companies listed on the main market.
6. For Costa Rica, data provided by the Securities Commission of Costa Rica (SUGEVAL), based on 10 listed companies on the main market.
7. For Denmark, data provided by the Danish Business Authority, covering companies listed on the main market.
8. For Finland, data provided by the Ministry of Justice, covering all companies listed on the regulated market. Companies on alternative markets (MTF or SME Growth Market) are excluded.
9. For Hong Kong (China), data was obtained from HKEX Board Diversity Statistics. The data covers all listed companies on the HKEX.
10. For Italy, data provided by the Italian Companies and Exchange Commission (CONSOB), covering all companies listed on the regulated market.
11. For Malaysia, data provided by the Securities Commission Malaysia (SC), covering the 100 largest listed companies by market capitalisation.
12. For Singapore, data was obtained from Singapore Board Diversity Review 2025, published by Council for Board Diversity. The data covers the 100 largest listed companies by market capitalisation.
References
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