EU has also set a target of 33% of women serving in senior management roles, including non-executive directorships and board positions, such as chief executive and chief operating officer.
Companies that fail to recruit enough women to their non-executive boards could also be fined and have board appointments canceled under the law.
A company that violates the law can have its boardroom selection annulled by a national court.
To enforce the directive, the national authorities are able to impose fines.
Companies with fewer than 250 employees will not be subject to the measures.
Every year, listed companies will be required to report on the gender representation on their boards and how they plan to reach the objectives.