Germany: Cabinet Approves Binding 30-Percent Quota for Female Board Participation

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By Andrea Barbara Schuessler

Dec. 23—Chancellor Angela Merkel's cabinet recently approved legislation implementing a binding 30-percent women's quota for replacements on supervisory boards in 108 companies effective in 2016, Family Minister Manuela Schwesig and Justice Minister Heiko Maas told reporters at a press conference earlier this month.

Europe's largest economy, Germany is still far behind when it comes to the proportion of women on supervisory boards, according to the current Women-on-Board Index from the Berlin-based Women on Supervisory Boards (Frauen in die Aufsichtsräte or “FidAR”). The association found that only 5.8 percent of directors of German companies listed on the DAX, MDAX, SDAX and TexDAX stock exchanges are female, and since 2011, when the Women-on-Board Index was published for the first time, the number of women in executive positions has actually declined.

To address this situation, the heads of Chancellor Merkel's coalition government agreed to move forward with the draft bill implementing the binding quota.

‘A Milestone'

“The fact that we approved the bill in the cabinet . . . is a milestone on the road to greater equality,” Family Minister Manuela Schwesig said. “For 20 years, the constitution has guaranteed the equal participation of men and women in Article 3. But it is not life reality.”

“This law will initiate a cultural change in the world of work,” Schwesig continued. “Only if there is equality at the top level of a company, will it also apply to the rest of the team. As more women take responsibility in leadership positions, equal opportunities in the companies as a whole will become more self-evident. I am convinced that this law will trigger a process that will change management and corporate cultures in our country.”

According to Justice Minister Heiko Maas, “The women's quota will provide equal opportunities. We do not accept the pretext that there wouldn't be enough qualified women. There have never been so many well qualified women as there are today. That's why I'm sure that there won't be one single free seat on supervisory boards. This will also be good for German companies.”

“The quota will break open structures and improve corporate cultures,” Maas added. “More women in leading positions will encourage other women to follow.”

Parliamentary approval of the bill is expected in spring 2015, Schwesig said.

‘Not the Right Way'?

“At Audi, we are not talking about a ‘quota,’ but rather of self-set goals that are just as binding on us,” Sabine Taner, a spokeswoman for the Bavarian automaker told Bloomberg BNA. “Many women also find the term ‘quota’ difficult. Finally, we do not want ‘quota women,’ but qualified, competent women leaders who have advanced because of their achievements, because for appointments, gender doesn't play the most important role, but qualifications and competence.”

“In order to increase the number of women in leadership positions,” Taner said, “we take a more general approach. In addition to measures to reconcile work and family life, as well as to raise awareness among the executives, we have set individual internal targets for each hierarchy level, starting with the trainees on the first operational management level up to the top management. We're striving for a woman share of around 30 percent of all newly hired academics. These qualified female academics will get to the management level after a reasonable time. So the proportion of women will increase continuously at all management levels.”

According to Ulla Spengler, spokeswoman for BASF in Ludwigshafen, “the binding quota for supervisory boards is not the right way. For these positions, personal suitability, and not gender, should be crucial.”

The binding women's quota would also be a “disproportionate intervention in the rights of shareholders,” Spengler added.

Jochen Frey, spokesman with the BMW Group in Munich, told Bloomberg BNA that his company aims “to increase the proportion of women in leadership positions . . . and therefore especially promote women. We have already voluntarily committed along with the other companies in the DAX 30 and set ourselves goals since 2011. We welcome the fact that the bill, similar to the ‘voluntary flexible quota,’ includes a flexible rate; that is, each company determines the desired proportion of women in leadership positions according to individual goals.”

“The companies and sectors have very different conditions,” Frey added, “so a strict quota for all would not make sense. As a company in the technical industry, we already have fewer female graduates of technical studies compared to a company that primarily requires business economists for leadership positions.”

‘A Valuable Resource'

“Especially large companies failed to sustainably increase the number of women in senior management positions in the past,” Elke Holst, research director for gender studies and senior economist with the German Institute for Economic Research, told Bloomberg BNA. The cabinet's decision, according to Holst, is “an important legal step to accelerate this process.”

“One should hope that companies recognize women in leadership positions not as a burden but as a valuable resource for the economy and that they increasingly promote the necessary change themselves,” Holst added.

To contact the reporter on this story: Andrea Barbara Schuessler in Berlin at

To contact the editor responsible for this story: Rick Vollmar at

Full text of the cabinet's draft bill is available at, the current Women-on-Board Index at, both in German.

For more information on German HR law and regulation, see the Germany primer.