Required Representation for Businesswomen in Germany

The German government recently mandated gender equality for both businesses and the public sector by instating a “women’s quota” of 30%. The government passed the law on March 6; by January 1, 2016 listed companies “subject to co-determination” must meet this quota otherwise their board elections will be deemed invalid.

Companies are also charged with developing gender quotas of their own for the two subsequent levels of management under the board (which reflect a higher percentage than the number of women already holding such positions) by September 30, 2015. They must meet these quotas in less than five years. Reporting and disclosure on goals and achievements are important components of this process, though there are no punishments in place for those companies that do not meet these self-determined goals.

This new law has significant potential to enact change in the country, as 100 companies will be affected by the quota. In general, German business management is far from gender equal, with only 19% of supervisory board positions held by women, despite the fact that over 50% of university graduates are females. However, as this is restricted to supervisory boards, its impact remains to be seen.

More promisingly, 3,500 companies will develop the lower-level management quotas, but these targets may not be ambitious enough or successful. However, given that management boards are currently only 6% female, this is certainly an important step to achieving gender equality in business.

Source: Dr. Sandra Urban-Crell and Bettina Holzberger, McDermott Will & Emery, Lexology