More women at board level

Second act on the proportion of women in executive posts More women at board level

The German government aims to introduce mandatory regulations to get more women onto the boards of major companies. To this end, the Cabinet has decided to reform the Act for more Women in Executive Posts (Gesetz für mehr Frauen in Führungspositionen). The regulation applies to the boards of publicly traded companies and companies subject to co-determination on the basis of parity.

On a green background, the diagram is headed "More women at the top". The text then reads darunter "Cabinet adopts mandatory regulations to ensure that more women sit on the executive boards of major companies".. (More information available below the photo under ‚detailed description‘.)

The percentage of women executives is to be significantly raised.

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Photo: Bundesregierung

Women are still under-represented at managerial and executive level in the private sector and in the public service. To change this, the Cabinet has launched legislation to reform the act of parliament designed to raise the proportion of women in specific positions.

In future, when the boards of publicly traded companies and companies subject to co-determination on the basis of parity have four or more seats, at least one seat is to be held by a woman. Women are still rarely found at this level in German companies. For four years a legal requirement for supervisory boards has been in place that sets the minimum proportion of seats that must be held by women, as well as a commitment to advance and develop women managers. These regulations are having an impact.

In the private sector, the fixed proportion of women on supervisory boards introduced in 2016 has led to a tangible increase in the average percentage of seats of supervisory boards held by women. A lower limit of 30 per cent was already exceeded as of fiscal 2017, and in November 2020 the figure had risen to 35.2 per cent. The proportion of women on executive boards, which has not hitherto been subject to any lower limit, has not risen in the same way as the proportion of women on supervisory boards.

"A milestone for women"

"Today marks a milestone for women," said Federal Minister for Women Franziska Giffey. Qualified women at executive level enrich economic and working life. They are role models and make a difference for the entire workforce.

Federal Minister of Justice Christine Lambrecht stressed that there are a great many highly qualified women in the country. "In future qualifications will count rather than gender when board seats are filled. That is what is important," she declared.

Targets to increase the percentage of women

Since 2016 all larger companies that are publicly traded or subject to co-determination have been required to establish targets to increase the percentage of managerial and executive posts held by women. Three quarters of companies covered by this obligation have either set no target for executive board level or have set a target of zero, meaning that they have no plans to appoint a woman to their executive boards.

To change this situation, there are to be new reporting obligations. In future a company will have to provide specific justifications if their executive board is exclusively male.

More women at managerial and executive level in federal enterprises

The federal government has co-determination rights in some private-sector companies, and can appoint members of supervisory boards. Here too, the requirement has been in place since 2016 that 30 per cent of all new federal government appointees must be women. Since 2018, the quota has in fact been 50 percent of all new supervisory board seats to be filled by federal government.

Women are still under-represented on the various bodies of companies in which the federal government has a stake. In future, in companies in which the federal government is the majority stakeholder, where the managing board consists of more than two directors, there is to be a minimum proportion of female and male appointees. In addition, the fixed quota for the minimum proportion of women on the supervisory board is to apply.

A new provision will stipulate that the management bodies of corporations in the field of social insurance must include at least one woman and one man.

Management posts in federal administration

The regulations for the public service are also to be updated. Bodies on which federal government appoints two members are in future to include equal numbers of women and men. The goal of ensuring that women and men are equally represented at management and executive level in the federal administration by 2025 is to be anchored in law under the provisions of the Federal Act on Gender Equality (Bundesgleichstellungsgesetz).

These provisions translate into law decisions set out in the coalition agreement and the resolutions of the working group appointed by the coalition committee.