Germany’s coalition government has proposed a law requiring corporate boards with more than three people to include at least one woman member. The law would also enforce a 30% quota on supervisory boards for companies that the German government holds majority shares in. The proposal is expected to be passed by the German cabinet in the next few months.
The move follows a recent analysis that revealed German companies lag behind rival economies when it came to women’s representation in the boardroom. Women currently occupy around 13% of board positions with the top 30 German companies, according to research by the Swedish-German AllBright foundation. In comparison, women hold almost 29% of board positions in the U.S., 25% in the U.K., and 23% in France. Previously, Germany tried a voluntary system established in 2015 to make its corporate boards more inclusive, but critics argue it didn’t work as well as a fixed quota would.
“This breakthrough is historic. We are putting an end to women-free boardrooms in large companies. We are setting an example for a sustainable, modern society. We are exploiting all of our country’s potential so that the best in mixed teams can be more successful. Because nothing is done voluntarily and we need guidelines to move forward,” Franziska Giffey, Germany’s federal minister for women, said in a statement.
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However, there might be backlash from German business groups, which have previously argued that such a quota is unnecessary interference from the government and that there aren’t enough qualified women candidates who could take up these positions. On the other side, some critics argue the proposed law isn’t ambitious enough and call 30% the “minimum” quota necessary.
The law would also introduce gender-specific quotas for public bodies like health, pension, and accident insurance funds, as women make up only 14% of the senior leadership in these institutions.
