“We are putting an end to women-free boards of directors in large companies,” said Franziska Gevi, Minister of Women and Family Affairs, who described the decision as a “historic breakthrough”.
But commercial lobbyists backed away from the decision. The Confederation of German Industries (BDI), which represents 40 business groups, said it supports efforts to encourage the appointment of women to leadership positions, but added that the council’s fixed quota is “a major interference with entrepreneurial freedom.”
“The tendency to try to correct social and political problems through the economy and companies should in no way become the rule,” Iris Blogger, a member of the executive board of Bahrain Development Bank, said in a statement. She added, “Politicians should show more courage in addressing the reasons for the small number of women on company boards of directors,” noting the need to expand the digital infrastructure “to facilitate the balance between work and family life for everyone.”
Blogger said companies should be granted “for as long as possible” to comply with the new measures and should be protected from sanctions where “it is not feasible” to meet requirements.
Germany lags behind many major economies when it comes to the proportion of senior executive positions held by women. According to the Swedish-German nonprofit foundation Allbright, women make up only 12.8% of the boards of the 30 largest listed companies in Germany.
In comparison, women were appointed to 28.6% of the top leadership positions in leading companies in the United States, 24.9% in Sweden, 24.5% in Britain, and 22.2% in France.
According to Allmendinger, the decision to introduce a quota system comes after decades of lobbying by women in Germany on issues related to gender equality in the workplace. “The long stalemate was finally broken when prominent conservatives began to support reform, thanks to the tireless efforts and pressure of many women and networks,” she told CNN Business.
Over the past few months, women from business, civil society, academia and the arts have participated in a coordinated campaign to lobby for legislation, including through social media and the hashtags #jetztreichts and #ichwill, which means enough and I want.
“Despite our success, we still have a lot to do,” Alminder said, noting the need to promote diversity more broadly in governing bodies and address structural disparities in the tax system that she said favors the male breadwinner. “The gender issue is just one important dimension,” she added.
Germany adopted mandatory supervisory board quotas in 2015, with women now accounting for 36% of non-executive board roles in large companies, according to the European Institute for Gender Equality. Under the country’s corporate governance system, supervisory boards oversee boards of directors but do not make decisions related to day-to-day operations.
Five other countries in the European Union – Belgium, France, Italy, Austria and Portugal – have introduced mandatory gender quotas on the boards of directors of the major listed companies.
Norway was the first country in the world to enact gender quotas on corporate boards, requiring 40% of board seats to be occupied by women.
Stephanie Hallasz and Mark Thompson contributed to the reportG.