The Approved-Person Problem: Why Europe’s Most Scrutinised Sectors Have the Least Diverse Leadership

Published September 2026. Legal and statistical references current as of the date of publication. This article is general information, not legal advice.

In most of the economy, a board appoints whoever it judges best. It may consult, benchmark and take advice, but the decision is its own.

In five sectors, it is not. In banking, fund management, aviation, energy networks and healthcare, regulation reaches past the company and attaches to the individual. The first four rest on EU instruments; in healthcare the clearest example is national, and we use the English regime here because it is the most explicit. Named people must be assessed, documented, sometimes formally accepted by a regulator before they can take office, and in two cases the regulator can block an appointment outright. These are the approved-person sectors, and they exist for good reasons: financial stability, air safety, security of supply, patient safety.

They also have some of the least diverse leadership in the European economy. Nearly half of EU banks and investment firms have no women at all among their executive directors. Women hold 18% of senior leadership roles in energy and 16% of general partner positions in European venture and growth equity funds.

The question this article asks is whether those two facts are connected.

What individual-level approval actually means

The regimes differ in mechanism. Aviation and energy involve a genuine external veto. Financial services, fund management and healthcare rely on documented suitability assessment that a supervisor can inspect and challenge after the fact. But the practical effect on a nomination committee is similar in all five: the appointment must be defensible to a third party, in writing, in advance.

The pattern in the numbers

Financial services. The European Banking Authority published its latest diversity benchmarking in April 2026, covering 704 credit institutions and 163 investment firms as at 31 December 2024. Nearly half of institutions have no women among their executive directors. Women account for 12% of CEOs across the EU. Around 20% of institutions still have no diversity policy at all, despite it being a legal requirement, and only 67% have set quantitative targets. Male executive directors earn roughly 10% more than their female counterparts. The EBA also found a positive correlation between gender balance and return on equity, a finding it has now reported consistently across multiple cycles.

Energy. According to the International Energy Agency’s World Energy Employment 2025, women hold 18% of senior leadership positions in the energy sector, up from 13% in 2015 but still below the economy-wide average of 25%. Women make up around 20% of energy sector jobs overall, roughly half their share of the wider economy. Renewables and nuclear have progressed; oil and gas supply showed only marginal gains and coal declined.

Private equity and fund management. Women make up 16% of general partners in European venture and growth equity funds and manage around 9% of assets under management, according to the study commissioned by the European Commission and the European Innovation Council in October 2025.

Aviation. Among airlines participating in IATA’s 25by2025 initiative, women held 28% of senior leadership roles, up from 24% in 2021. That figure should be read with care: these are companies that voluntarily signed a gender diversity pledge, so they are unlikely to be representative of the sector as a whole.

Healthcare is the outlier, and instructively so. The World Health Organization’s analysis of the global health and social workforce, published under the title Delivered by Women, Led by Men, found that women make up around 70% of the global health workforce but hold roughly 25% of senior roles. Women in Global Health reconfirmed both figures in March 2023 and reported that women remained just as overlooked for senior leadership as they had been five years earlier. These are global rather than European figures, and it is worth saying so, because everything else in this article rests on European data. But the direction is not in doubt, and here the supply argument that partially explains energy and aviation does not apply at all. The workforce is overwhelmingly female and the leadership is not.

Does approval cause the gap? Partly, at most

The honest answer is that these sectors would have poor gender balance regardless. Energy, aviation and fund management are capital-intensive, engineering-heavy or historically closed fields with thin female pipelines going back decades. That explains a great deal on its own, and any account that ignores it is wrong.

But there is a mechanism worth naming, because it compounds the problem rather than merely coinciding with it.

When an appointment must survive external scrutiny, nomination committees minimise risk. The safest candidate is not the strongest candidate but the most obviously defensible one: someone who has held the role before, has already been through an approval process, has a file that a regulator has previously accepted. “Previously approved elsewhere” becomes a credential in its own right, and it is a credential that can only be held by people who already have these roles.

The effect is circular. In a sector where 88% of bank CEOs are men, the pool of previously-approved candidates is 88% male, and appointing from that pool keeps it that way. Regulation designed to keep unsuitable people out has the side effect of keeping unfamiliar people out, and unfamiliarity correlates with underrepresentation.

Two pieces of evidence suggest this is more than speculation. The EBA reports better gender balance among newly recruited directors than among incumbents, which is what you would expect if the constraint were partly about incumbency rather than availability. And healthcare, where the female talent pool is enormous, still produces roughly 25% female senior leadership, which suggests something other than supply is operating.

The energy sector has a second constraint

Energy networks illustrate the problem in its sharpest form, because European unbundling rules restrict not only whether a person may be appointed but where they may have worked.

Under Directive (EU) 2019/944 and the corresponding gas rules, the persons responsible for managing a transmission or distribution system operator may not participate in the corporate structures of the vertically integrated undertaking responsible for generation or supply. Under ownership unbundling, the same person may not sit on the managing board of both a network operator and a generation or supply business. And under the Independent Transmission Operator model, the regulatory authority may object to any decision concerning the appointment, renewal or termination of office of the management.

The candidate pool for a network operator’s leadership is therefore defined by exclusion as well as qualification. Senior energy executives who built their careers on the generation or supply side are ineligible for certain network roles. In a sector where women already hold 18% of senior positions, an additional structural narrowing of the pool has a disproportionate effect on the smaller group.

What this means for hiring

Three practical consequences follow, and they apply across all five sectors.

You cannot appoint on potential. In an unregulated business, a board can take a considered risk on a candidate who has not held the exact role before, backing judgement and trajectory over an exact match. In approved-person sectors that option narrows sharply, because the file has to stand up in advance. This is the single most important difference, and it is why internal development alone rarely solves the problem: a promising internal candidate is not appointable if the documentation will not survive scrutiny.

The pool has to be searched wider, not deeper. If the constraint is prior credentials, then searching the same market harder will not help. What helps is searching across borders, where the same qualification frameworks apply in other Member States, and across adjacent regulated sectors where the credential genuinely transfers. A suitability assessment does not care which country the experience was gained in, provided it is documented and relevant.

Succession planning carries more weight than elsewhere. Several of these roles block operations when vacant. An aviation organisation without accepted nominated persons has an approval at risk. A fund manager without two qualifying individuals does not meet its authorisation conditions. Planning a replacement after a resignation is too late, and the resulting search happens under exactly the time pressure that produces conservative appointments.

How Female Executive Search helps

Female Executive Search, part of the CEO Worldwide group founded in 2001, specialises in identifying outstanding female leaders for board, C-level and executive committee roles. In regulated sectors this means candidates with the documented track record that a suitability assessment requires: women who have held management body positions in financial institutions, nominated postholder roles in aviation, network operator leadership in energy, general partner and investment committee roles in fund management, and director-level positions in healthcare providers.

We draw on a global pool of over 28,000 vetted executives across 183 countries, which matters more in these sectors than in most, because the qualifying population in any single national market is small. Our process delivers a shortlist of qualified, interested candidates within 7 to 10 days, on a transparent milestone-based fee of 25% of gross annual salary paid in three instalments, with a 6-month replacement guarantee.

You may not be able to name your company yet. A search for a new executive director or management body member is read as a signal about the incumbent, and in regulated sectors it often reaches the supervisor before it reaches candidates. And advertising for a nominated postholder or a network operator role while the current holder is still in office is visible internally long before the decision is final. Our executive job posting service exists for exactly this: the role is published to our pool of vetted female executives without your company name attached, and your identity is disclosed to a candidate only at the point you decide to take her to interview. It is a lighter commitment than a retained mandate and a faster way to test the market — and our note on when to post a role anonymously and when to run a search sets out which of the two fits which situation.

If you would rather we ran the search, submit a search mandate and see the calibre of candidates available to you.

Frequently asked questions

Which sectors require regulatory approval of individual senior appointments? In Europe, five stand out. Financial services requires suitability assessment of management body members and key function holders. Fund management requires at least two persons of good repute and relevant experience, named to the competent authority. Aviation requires an Accountable Manager and nominated persons formally accepted by the competent authority. Energy network operators are subject to management independence rules, and the regulator may object to appointments at Independent Transmission Operators. The first four rest on EU instruments. Healthcare requirements are national rather than European: in England, directors must meet a fit and proper persons test and the registered manager must be registered with the Care Quality Commission, with equivalent requirements applying in other European countries in different forms.

How many women hold senior leadership roles in these sectors? The figures are among the lowest in the economy. Nearly half of EU credit institutions and investment firms have no women among their executive directors, and women hold 12% of CEO positions (European Banking Authority, April 2026, based on 2024 data). Women hold 18% of senior leadership roles in energy (International Energy Agency, 2025) and 16% of general partner positions in European venture and growth equity funds (European Commission and European Innovation Council, October 2025). In healthcare, women make up around 70% of the global health workforce but hold roughly 25% of senior roles (World Health Organization; reconfirmed by Women in Global Health, March 2023), though these are global rather than European figures.

Does regulatory approval make it harder to appoint women? Not directly, and no suitability framework discriminates on its face. But approval requirements encourage nomination committees to favour candidates who have already held the role and already passed an approval process, which advantages incumbents. In sectors where incumbents are overwhelmingly male, that entrenches the existing composition. It is a compounding factor rather than a root cause: these sectors also have thin historical pipelines, which explains much of the gap independently.

What does the energy unbundling rule mean for recruitment? Under EU electricity and gas rules, the management of a transmission or distribution system operator may not participate in the corporate structures of the group’s generation or supply businesses, and under ownership unbundling the same person may not serve on the managing board of both. For Independent Transmission Operators, the regulator may object to the appointment, renewal or termination of management. The candidate pool is therefore restricted by career history as well as by qualification.

How should companies in regulated sectors approach senior recruitment differently? Three adjustments matter. Accept that candidates must be demonstrably qualified in advance rather than appointable on potential, which limits how far internal development alone can go. Search wider rather than harder, across borders and adjacent regulated sectors where credentials transfer, since the qualifying population in any one national market is small. And treat succession planning for regulated roles as an operational priority, because several of these positions put approvals or authorisations at risk when they fall vacant.

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Sources: European Banking Authority, Report on the benchmarking of diversity practices in the EU banking sector, 2024 data, published 23 April 2026; International Energy Agency, World Energy Employment 2025; European Commission and European Innovation Council study on the gender investment gap, October 2025; IATA 25by2025 initiative reporting; World Health Organization, Delivered by Women, Led by Men: A Gender and Equity Analysis of the Global Health and Social Workforce, 2019; Women in Global Health, The State of Women and Leadership in Global Health, March 2023; joint EBA and ESMA Guidelines on the assessment of suitability of members of the management body and key function holders; Directive 2013/36/EU (CRD) Articles 75(1), 91(11) and 91(12); Directive 2011/61/EU (AIFMD) Article 8(1)(c) and AIFMD II substance requirements; Regulation (EU) No 1321/2014, point 145.A.30; Directive (EU) 2019/944, in particular Article 48 on the independence of the staff and management of the transmission system operator, together with the ownership unbundling and distribution system operator provisions, and the equivalent provisions of the EU gas directives; Health and Social Care Act 2008 (Regulated Activities) Regulations 2014 (England), Regulations 5 and 7.