Germany’s coalition government has agreed to a mandatory quota for women on boards of listed companies in a bid to tackle boardroom gender inequality.
“The breakthrough is historic,” stated Franziska Giffey, Germany’s Minister for Women and Families. “We are putting an end to women-free boardrooms at large companies.”
The historic policy means that listed companies with management boards of more than three executives must appoint at least one woman to the C-suite, according to a statement from Germany’s ministry for family affairs, senior citizens, women and youth.
HISTORIC MOVE
The decision to introduce the controversial quota follows decades of women lobbying in Germany for gender equality in the workplace. “Over the past few months, women – from the corporate world, arts, academia and society at large – have engaged in a coordinated campaign to push for the legislation and change. Thanks to those efforts and social media campaigns using the hashtags #jetztreichts, which means enough is enough, their voices have finally been heard.
Many prominent women leaders in the country have welcomed the “historic” move. They include Jutta Allmendinger, President of the WZB Berlin Social Science Center, Janina Kugel, former Chief Human Resources officer of Siemens and Christine Lambrecht, Germany’s Justice Minister. “This law is a huge success for women in Germany, and offers not just a great chance for society, but the companies too,” remarked Lambrecht.
However, the Federation of German Industries (BDI), which represents around 40 of the country’s trade groups, has described the move as “a major intervention in entrepreneurial freedom.” They also stated that it’s “not practically possible to meet the requirements”.
LAGGING BEHIND
But the move is a necessary one as gender equality in leadership at German firms lags behind several major economies; especially when it comes to the proportion of senior executive positions held by women in the country’s top companies. According to the non-profit Allbright Foundation, women make up just 12.8% of management boards of Germany’s 30 largest listed companies. That’s practically just half of other European countries, like the UK (24.5%) and Sweden (24.9%). It also pales in comparison to the US (28.6%).
Other EU countries that have adopted mandatory gender quotas for large listed company boards, include Austria, Belgium, France, Italy and Portugal. However, Norway was the first country in the world to legislate gender quotas for corporate boards, which requires women to fill 40% of board seats.
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