German Parliament approves quota for female directors

AP News
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Posted: Mar 06, 2015 8:03 AM
German Parliament approves quota for female directors

BERLIN (AP) — Germany's Parliament on Friday approved a quota system that will require leading companies in Europe's biggest economy to have at least 30 percent women on their supervisory boards starting next year.

The quota will apply to the directors of more than 100 listed companies, though not to their management boards. Another 3,500 firms will be required to set targets of their choosing to raise the number of female directors and women in other leadership positions.

"If there are no equal opportunities at the top of companies, there are none in other areas either," Manuela Schwesig, the minister for women and families, told ZDF television.

Lawmakers from Chancellor Angela Merkel's governing coalition of conservatives and Social Democrats backed the legislation Friday. Opposition lawmakers who argued that it didn't go far enough abstained.

"A real quota for women must apply to all companies," said Caren Lay, a lawmaker with the opposition Left Party.

The new quota won't apply to public-sector employees, though officials are pledging to increase the number of women in public-sector leadership jobs.

A study by the German Institute for Economic Research found that, last year, women accounted for 18.6 percent of the supervisory board members — the German equivalent of directors — at the country's biggest 100 companies.

Germany's biggest companies, the 30 listed in Frankfurt's benchmark DAX index, were closest to fulfilling the new quota, with 24.7 percent female directors.

The Federation of German Industries criticized the 30 percent quota as a "purely symbolic policy" and complained that the legislation foresees punishment for private companies but not for the public sector.

The new legislation will be applied as vacancies arise, and it is unclear how many posts will be affected in 2016. Starting next year, companies that haven't met the quota would either have to appoint a woman to fill a supervisory board vacancy, or leave the seat empty.

Schwesig said that is an effective measure because it would affect the balance of power on supervisory boards. In Germany, those boards normally contain equal numbers of employer and employee representatives.

The management boards of the biggest companies contain even fewer women than their supervisory boards. Women accounted for only 4.1 percent of executives at Germany's biggest 100 companies last year.

Germany follows Norway, Spain and France and others in imposing quota requirements.