Germany agrees to mandatory quota for female executives

Germany agrees to mandatory quota for female executives

The parties in Angela Merkel’s coalition government have agreed to introduce a mandatory quota for women in the senior management of listed German companies, in a move that has been hailed as a big step on the road to sexual equality in the German workplace.

Franziska Giffey, minister for families and women, called the deal a historic breakthrough. “We are putting an end to women-free C-suites in big companies,” she said, adding that the attempt to encourage firms to hire more female executives on a voluntary basis had failed.

According to a deal agreed by Ms Merkel’s Christian Democrats and their junior partner the Social Democrats, management boards with more than three members must in future include at least one woman. A system of voluntary commitments to gender equality, in force since 2015, failed to yield results.

Equality advocates were jubilant. “Great, great joy,” tweeted Jutta Allmendinger, a sociology professor at Berlin’s Humboldt University, who was a leading campaigner for the quota.

But German business groups will be dismayed at the deal. They had argued that a quota represented unwarranted interference in the internal affairs of companies, and that there was a dearth of suitable female candidates for senior management roles.

Women currently make up only 12.8 per cent of the management boards of German companies listed on the blue-chip Dax index, according to a recent survey by the Swedish-German AllBright Foundation. The proportion of women in leadership roles is 28.6 per cent in the US, 24.9 per cent in Sweden and 24.5 per cent in the UK.

More worryingly, the survey found that German C-suites have become even more male-dominated in recent months. It found that the number of women in senior executive positions in Germany fell to 23 at the start of September, from 29 a year before.

Germany’s record is even worse if companies from the smaller MDax and SDax indices are included. Only 10 per cent of the senior executive positions in all of the 160 Dax, MDax and SDax firms are filled by women. The study found that 11 Dax companies did not have any women on their management boards.

The cause of equality received a big boost last year when Jennifer Morgan was appointed co-chief executive of Europe’s most valuable software group, SAP, making her the first female boss of a DAX-listed company. But she lasted just six months in the job.

This week it was announced that she had been hired by Blackstone to fill a new post of global head of portfolio transformation and talent.

The situation will improve somewhat next year, however, when Belen Garijo, a 60-year-old Spaniard, takes the reins at pharmaceutical company Merck.

The agreement between the CDU/CSU and SPD also dictates that 30 per cent of the seats on the supervisory boards of companies in which the government holds a majority stake must be set aside for women.

A female quota will also be introduced for public bodies such as health, pension and accident insurance funds, and the Federal Labour Office. Currently women make up only 14 per cent of the senior leadership roles in these agencies.

The deal, which was negotiated by a working group consisting of members of the government parties, will be presented to the respective parties’ leaders next week for approval and be passed by the German cabinet in the coming months, the justice ministry said.

“We are giving skilled and motivated women the opportunities they deserve,” said Christine Lambrecht, justice minister. “This is a big success for women in Germany which at the same time offers a big chance for society and the companies themselves.”

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