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David Gibson

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Germany pushes forward with forced female boardroom quotas. Will Europe follow suit?

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As we approach 2014, equality issues continue to dominate the headlines because, unfortunately, women are still under-represented at the highest levels of management in organisations. The debate has raged on for well over a year now, with many European countries investigating different options for tackling the problem. However, despite a plethora of edicts, orders, policies and procedures at macro and micro-level, the problem still persists. Now, however, there are indications that Germany will aim to address this problem head on.

Earlier in the year, Angela Merkel, the German Chancellor, persuaded members of her political party to defeat a measure in Parliament which would have mandated that 20% of public companies’ supervisory boards be comprised of women by 2018 and that by 2023 this proportion would have to rise to 40%.

Quotas are generally popular in other European countries, including in France and Norway, but Merkel has long been against them. Now though, it seems she has changed her mind.

The development comes as a surprise to most because, in July of this year, Germany, Europe’s biggest economy, joined with Britain in voting against the European Commission’s proposal for a compulsory boardroom quota for women. This step-change may have something to do with a desire to keep the Commission at bay in certain areas. However, in a positive mood for change, new proposals have brought about the ‘Frauenquote.’

How will it work?

Under the Frauenquote, as of 2016, the boards of companies registered on the German stock exchange will be required to be made up of at least 30% women. In addition, large firms will have to define and make public their plans for moving more women into top executive roles.

Manuela Schwesig, who led talks for the Social Democrats on the introduction of the Frauenquote, described the agreement as, “An important signal to improve the chances of women in the workplace.” Others have described the new quota as a ‘no-brainer’, but what do German employers make of it?

The Guardian newspaper reported that senior figures in one of Germany’s key sectors, the automotive industry, have reacted with distrust, threatening to move production out of Germany if the quota is forced upon them. This could be bluster or just pure misguided analysis. Outside of the auto sector, other employers have welcomed the move, but made the valid point that change needs to emanate through all levels, not just the boardroom, for a real business change.

What does this mean for the UK?

Given the controversy surrounding the Frauenquote, can we expect similar reactions from employers in the UK? I expect that the mixed reaction from German businesses would be mirrored in the UK. One comment by Wolfgang Schmitz, of the German Employers’ Association, said that “It should be up to the state, not businesses, to create the right conditions. Instead of wading in with statutory requirements, the government should concentrate on improving infrastructures: more nursery places and all-day schools. We need chances, not quotas.” With that said, there has also been much support for the quotas, with many businesses already having plans in place to include more women on boards.

The question is, will our government follow this view and look to support those females aiming high? Labour has already demonstrated moves towards encouraging employers to introduce initiatives to entice mothers back to work, with recent discussions around additional support with childcare costs and extending the concept of flexible working. However, is this enough?

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David Gibson

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