Germany is set to introduce legislation that will require its top DAX-listed companies to assign 30% of its non-executive board seats to women beginning in 2016.
The country’s two largest political parties, Chancellor Angela Merkel’s Conservatives and the left-leaning Social Democrats have reached a tentative agreement on the proposed rules. Imposing quotas on companies that will force them to increase the number of women in boardrooms is being considered as part of the parties’ negotiations to form a coalition government following the September elections.
In addition to the 30% quota, large firms will also have to make public their plans for pushing more women into top leadership roles and will be forced to leave supervisory board seats vacant if they can’t find women to fill the positions.
In Germany, women currently hold just 17.4% of positions on supervisory boards of the top 100 DAX-listed companies, and just 6.1% of management board members are female. The country has previously introduced voluntary targets for women in key leadership roles in 2001 but hasn’t resulted in significant change.
The SDP had previously pushed for 40% of women on boards by 2021, while Merkel’s CDU party strongly opposed fixed targets. In April German MPs voted against implementing binding quotas.
SPD chief negotiator Manuela Schwesig welcomed the agreement, calling it an important step in improving career progression for women.
“Women still earn less than men in daily working life and they still find they barely have opportunities to get into leadership positions, even though they’re well qualified—that’s why we agreed on legally binding rules on equal pay for equal work, and for women in leadership positions,”
CDU parliamentarian Michael Fuchs remained skeptical, telling reporters: “It’s a toad that we’re going to have to swallow. There are companies where that’s going to be difficult.”