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Germany agrees on law for mandatory female quotas in the boardroom

German Chancellor Angela Merkel arrives at a press conference – Shutterstock

The German government has agreed on mandatory female quotas on the boards of leading businesses, a move that Berlin says was necessary as companies were failing to take voluntary steps towards gender equality.

A bill agreed between Angela Merkel’s Christian Democratic Union [CDU] and her junior coalition partner, the Social Democrats, will enforce a rule of at least one female board member on companies listed on the stock exchange.

Meanwhile, businesses that the German state has a majority shareholding in will be required to fill 30 per cent of the chairs at their board tables with women.

Justice Minister Christine Lambrecht said that “this law is a huge success for women in Germany, and offers not just a great chance for society but for the companies too.”

The coalition partners committed themselves in 2018 to passing legislation that would improve conditions for women at the top of German business. But it took months of wrangling between the parties before the draft law was finally agreed upon.

Franziska Giffey, the families and women’s minister, conceded that a law enacted in 2015 that obliged companies to publish targets for female participation at board level had failed to produce the desired results.

“Voluntary measures were not achieving anything, we need obligatory standards in order to achieve results,” she said.

Surveys show that there are far fewer women at the top end of German business than is the case in countries such as the UK and the US. While roughly a quarter of executives at British firms are female, just 13 percent of executives at companies on Germany’s DAX index are women.

The steel giant ThyssenKrupp is one of the few German conglomerates to have a female CEO. Martina Merz took over in 2019 and has been attempting to turn around the struggling manufacturer’s fortunes after years of instability.

Criticism of the quota has come from the liberal Free Democrats, who say that it “degrades women to the position of placeholders and doesn’t truly respect their achievements.”

The Greens on the other hand said that the law did not go far enough. “What they set out is a minimum requirement, nothing more than that,” said Green MP Ulle Schauws.


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