Today, the Latvian government has once again approved a draft law aimed at requiring gender balance in the management of certain large companies.
The proposed changes, developed by the Ministry of Welfare, are outlined in the Draft Law on Ensuring Gender Balance in Governance Bodies of Capital Companies. It states that in specified large enterprises, no gender should comprise more than two-thirds of board or supervisory body members to ensure gender equality.
Previously, a majority in the Saeima rejected sending the draft law for further review in committees. Deputies from New Unity, The Progressives, and some members of the Union of Greens and Farmers supported referral, while those from Latvia First, Stability!, the National Alliance, the United List, and part of ZZS voted against it.
The law would apply to capital companies whose legal address has been in Latvia for at least two reporting years, with an average of 250 employees, a net turnover of at least 50 million euros, or a balance sheet total of at least 43 million euros.
According to these criteria, the law would currently apply to only two capital companies in Latvia,
based on data from Nasdaq Riga as of the 11th of June, 2025.
These companies would be required to ensure that the underrepresented gender holds at least 40% of supervisory board positions, or at least 33% of combined supervisory and management board positions.
Companies must comply with at least one of these requirements by the 30th of June, 2025. Those failing to meet the targets by late summer 2026 must provide the Bank of Latvia with documentation proving that their candidate selection process was open and compliant with the legal standards. The Bank will also publish violations online and may impose enforcement measures, such as those outlined in the Administrative Procedure Law.
If a company has not met gender balance requirements by the deadline because current board or council member terms have not yet ended, it will not be required to dismiss them or initiate an early selection process.
However, once the terms end,
the company will be obligated to hold an open, transparent candidate selection process.
The public announcement for a candidate selection must include clear, gender-neutral language describing qualifications and criteria to assess professional suitability, competence, and performance.
If candidates are equally qualified, priority must be given to the underrepresented gender—for example, if men are overrepresented in the board, preference should be given to a woman, and vice versa.
Nonetheless, companies may still choose a candidate of the overrepresented gender if, for justified reasons, their individual situation contributes to diversity goals—such as belonging to a vulnerable or underrepresented social group—provided the choice is based on non-discriminatory grounds.
In case of dispute, if a candidate claims direct or indirect gender-based discrimination, the company must prove that its decision was based on objective, non-gender-related criteria. If the explanation is not accepted by the candidate, they may bring the case to court under the Civil Procedure Law.
The Ministry of Welfare explains that direct discrimination occurs when a person is treated less favorably due to gender in a comparable situation. Indirect discrimination occurs when a seemingly neutral rule or practice disproportionately affects one gender, unless it is objectively justified by a legitimate aim and proportionate means.
Harassment and instructions to discriminate also qualify as discrimination under this law, including behavior of a sexual nature that creates a hostile, humiliating, or offensive environment. Relevant capital companies would be required to publish an annual statement on their website regarding gender representation on their boards and councils, including explanations if the required balance is not met and plans for future compliance.
At the request of companies, the Society Integration Foundation may provide informational support on promoting corporate diversity and organizing the candidate selection process.
The Ministry refers to data from the European Institute for Gender Equality, showing that in 2023, only 23.9% of board and council members in Latvia’s large publicly listed companies were women—compared to the EU average of 35.1%.
Currently, 72% of board positions in Latvian listed companies are held by men, and 28% by women. On supervisory boards, the ratio is 74% men to 26% women. Latvia is the only EU country where the proportion of women in such positions has declined since 2013—by 4.7%.
Data from Latvia’s Top 101 most valuable companies shows only 22% of board members are women, and just 19% in supervisory councils.
State-owned companies are not doing significantly better—with 28% of leadership roles held by women, and 72% by men.
The public consultation process also received recommendations from Nasdaq Riga and the Baltic Institute of Corporate Governance, suggesting the law should also apply to boards of state and municipal-owned enterprises.
The final decision on the proposed changes will rest with the Saeima.
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