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Jamie Lawrence

Wagestream

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Germany to have forced female boardroom quotas at public companies

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The two parties most likely to form a German government at the next election have reached a compromise over quotas for women in the boardrooms of quoted German firms.

The legislation, known as Frauenquote, will from 2016 require companies listed on the German stock exchange to have at least 30% women on their supervisory boards.

Larger firms will also have to define and publicise their plans to elevate women in senior roles.

The move follows other European countries – Norway back in 2003, followed by Italy, France, Spain and others – who have introduced mandatory quotas for women in executive positions.

Back in July, Germany voted against European commission proposals for mandatory quotas and was joined by Britain and seven other countries. However a shift in political climate has dampened the political will against mandatory quotas.

In Germany, nearly 12% of executive board positions are held by women, compared to 6% in the UK.

The move has been met with criticism from business communities. Bosses from Germany’s leading car manufacturers – BMW, Daimler, Opel and Volkswagen – have threatened to move production elsewhere if they are forced to introduce quotas.

Wolfgang Schmitz of the employers' association said that "a quota merely treats the symptoms, not the causes of the low representation of women in leading roles".

"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."

Not everyone has been critical, however. Deutsche Telekom, a communications firm, said in 2010 that it would aim to achieve the 30% figure in both senior and middle management by 2015.

"The latest political developments show that no modern company can avoid addressing the quota issue," Telekom spokesman Christian Schwolow told the Guardian.

With Germany now having taken the plunge, it’ll be interesting to see which direction Britain takes.

Back in October Burberry CEO Angela Ahrendts announced an intention to move to Apple, which will leave just two women leading FTSE100 companies. However, today 38-year old Liv Garfield was announced as the new CEO of water company Severn Trent, a post to be taken up next year.

Aside from these high-profile movers and shakers, there’s the wider issue of general gender diversity in the boardroom but opinion is still split on whether mandatory quotas are the way to go in Britain, or whether other avenues – such as improved access to education and better training – will yield a better result.

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Jamie Lawrence

Insights Director

Read more from Jamie Lawrence
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