Mandatory Women on Boards in UAE: New Requirements for Private Joint-Stock Companies 2025

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In a significant move to enhance gender diversity in the corporate sector, the UAE has mandated that all private joint-stock companies must have at least one woman on their board of directors. This new rule, which takes effect from January 2025, is a major step forward in the UAE’s commitment to promoting gender equality and to creating a more inclusive and dynamic business environment. This guide explains what the new requirement means for your business.

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The Challenge: Breaking the Glass Ceiling in the Boardroom

Globally, women remain significantly underrepresented in corporate leadership positions. This lack of diversity is not only a matter of fairness and equality, but it is also a missed opportunity for businesses. A growing body of research shows that companies with more diverse boards tend to be more strategic, more profitable, and better at managing risk.

The Solution: A Quota for Gender Diversity

The UAE has taken a bold step to address this issue by introducing a mandatory quota for women on the boards of private joint-stock companies. This follows a similar move in 2021, which introduced a quota for women on the boards of publicly listed companies.

Key Aspects of the New Requirement

1. A Minimum of One Woman on the Board

The new rule requires all private joint-stock companies in the UAE to have at least one woman on their board of directors. While this is a minimum requirement, companies are encouraged to go further and to strive for a more balanced representation of men and women on their boards.

2. A Focus on Private Joint-Stock Companies

The new requirement applies specifically to private joint-stock companies. This is a significant development, as it extends the push for gender diversity beyond the publicly listed sector and into the heart of the private economy.

3. A Deadline of January 2025

Companies have until January 2025 to comply with the new requirement. This gives them time to identify and recruit qualified female candidates for their boards.

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The Business Case for Gender Diversity

The new requirement is not just about ticking a box; it is about improving the performance and sustainability of businesses. There is a strong business case for gender diversity in the boardroom.

• Improved Financial Performance: A number of studies have shown a positive correlation between the number of women on a company’s board and its financial performance.
• Enhanced strategic advancement: Diverse teams are more strategic and are better at problem-solving.
• Better Risk Management: Women often bring a different perspective to the boardroom, which can lead to better risk management and a more robust decision-making process.
• A Stronger Brand Reputation: Companies that are seen as being committed to diversity and inclusion are more attractive to customers, employees, and investors.

Conclusion: A More Inclusive and Competitive Economy

The new requirement for women on the boards of private joint-stock companies is a major step forward in the UAE’s journey towards a more inclusive and competitive economy. It will support to break down the barriers that have for too long held women back from reaching the highest levels of corporate leadership, and it will support to create a more dynamic and strategic business environment for all.

At Nour Attorneys Law Firm, we are committed to supporting our clients in building diverse and effective boards. We can provide advice on all aspects of corporate governance, including board composition and director recruitment. Contact us to build a board that is fit for the future.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute legal advice. Readers should seek professional legal advice tailored to their specific circumstances before making any decisions or taking any action based on the content of this article.

Nour Attorneys Team

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