Breaking Barriers
How UAE’s Ministerial Resolution No. 137 of 2024 Promotes Gender Diversity in Corporate Leadership?
In a continued effort to foster gender diversity and promote inclusive corporate governance, the UAE Ministry of Economy has introduced Ministerial Resolution No. 137 of 2024 (the “Regulation”). This Regulation mandates that all private joint-stock companies must allocate at least one seat on their board of directors to a woman. This requirement, effective January 2025, will come into force after the expiration of the tenure of current boards of private joint-stock companies.
This Regulation is not a mere formality, but is part of a larger national agenda aimed at positioning women as active contributors in key leadership roles within the corporate landscape.
The Objective Behind the Regulation
The core intention of Ministerial Resolution No. 137 of 2024 is to increase gender diversity in decision-making processes within private joint-stock companies. This Regulation follows a similar initiative previously applied to public joint-stock companies (PJSCs) through the United Arab Emirates Securities and Commodities Authority (SCA) Decision and the subsequent change to the Governance Code, issued by Chairman of the SCA Board Resolution No. (08/R.M) of 2020. This amendment modified Clause (3) of Article (9) of the Joint Stock Companies Governance Manual, making it mandatory to appoint at least one female member to the board of all UAE PJSCs.
The success of this initiative has paved the way for the new Regulation, extending similar mandates to the private sector and signaling a broader commitment to gender-balanced leadership.
This new Regulation aligns with the UAE’s wider gender equality efforts, builds on previous regulations, and reinforces the nation’s reputation as a regional leader in empowering women across various sectors.
Legal Basis
The legal basis for this Regulation stems from its Article 63, specifically the third paragraph. This section of the law explicitly states the requirement for private joint-stock companies to include at least one female representative on their board of directors. The January 2025 implementation timeline allows businesses to incorporate the new requirement as boards start new tenures following the end of their current terms.
Preparations and Compliance
Companies should begin preparations now to avoid last-minute challenges in meeting the requirement. The phased approach is designed to ensure a smooth transition, providing sufficient time for compliance without disrupting existing corporate structures.
Compliance with the Regulation is essential. Article 72 outlines the enforcement of administrative penalties for violations of the rules set by the UAE’s Federal Decree-Law No. (32) of 2021 on commercial companies, in line with the regulatory framework established by Cabinet Decision No. (102) of 2022.
For some companies, implementing this Regulation may pose challenges, particularly in sectors where women have been historically underrepresented in leadership roles. However, this also presents an opportunity for businesses to rethink their corporate governance structures and adopt more inclusive policies.
Conclusion
Ministerial Resolution No. 137 of 2024 represents a significant milestone in the UAE’s journey toward greater gender equality in corporate governance. By requiring private joint-stock companies to appoint at least one woman to their boards, the Regulation signals a major shift in corporate leadership norms. Companies that embrace this change stand to benefit from enhanced decision-making processes, stronger corporate reputations, and improved financial performance.
As the Regulation takes effect in January 2025, businesses are encouraged to start planning now, ensuring they meet the new requirements while contributing to the UAE’s vision of a more inclusive, diverse, and equitable corporate landscape.
After all, they say behind every great company is… at least one woman on the board!
