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Germany now requires all companies to put women on their executive boards. That's a win.

After a long fight for measures to guarantee gender equity in the corporate sector, Germany has announced a quota for women executives in listed companies.

Germany now requires all companies to put women on their executive boards. That's a win.
Image Source: Getty Images/ Merkel Speaks Following G20 Virtual Summit. (Photo by Christian Marquardt)

In a statement made on Friday by Germany's ministry for family affairs, senior citizens, women and youth, the country's coalition government announced that all listed companies will be mandated to place women on their boards through a quota mechanism. The move is being praised as a "landmark moment," particularly because Germany is Europe's biggest economy. Henceforth, all listed companies with management boards of more than three executives must ensure that they appoint at least one woman to the C-suite level, CNN reports. A final decision on the new policy will be released later next week. Franziska Giffey, the minister for women and families, described the decision as a "historic breakthrough."



She affirmed, "We are putting an end to women-free boardrooms at large companies." Jutta Allmendinger, president of the WZB Berlin Social Science Center, also said the decision was "historic." Janina Kugel, the former chief human resources officer at Siemens (SIEGY), welcomed the news as well. Despite several prominent women leaders and campaigners in Germany supporting the new policy, business lobby groups have pushed back on the decision. For instance, The Federation of German Industries (BDI), which represents 40 trade groups, claimed it supported efforts to encourage women to take up more leadership positions in enterprise but argued that a fixed quota would be "a major intervention in entrepreneurial freedom."



"The tendency to try to rectify socio-political problems through the economy and companies must in no way become the rule," asserted BDI executive board member Iris Plöger in a statement. "Politicians should rather show greater courage in tackling the reasons why there are so few women on company boards." She added that companies needed to improve their digital infrastructure in order "to make it easier for everyone to balance work and family life." Of course, there is also the problem of the "quota executive." In companies where gender equality is not the social norm, a woman board member's qualifications may come into question by her peers. Furthermore, to be the only woman in a room full of men can also be an isolating experience.



Perhaps with this in mind, Plöger urged the government to give companies "as long as possible" to comply with the new regulation. She additionally asked for them to be protected against sanctions where it is "not practically possible" to meet the requirements. As stakeholders await final compliance regulations, those who have fought for the quota rejoice. As per Allmendinger, the quota is the result of several decades of lobbying by women in Germany on policy measures to improve gender equality in the workplace. She stated, "A long stalemate has finally been broken, when leading conservatives started to support the reform, thanks to the tireless efforts and pressure of many women and networks."



Germany performs terribly with regard to gender equality in the corporate sector, particularly in senior management positions. According to data from the nonprofit organization Swedish-German Allbright Foundation, women make up only 12.8 percent of the management boards of Germany's 30 largest listed companies. In contrast, in the United States, women are represented in 28.6 percent of senior leadership roles at leading companies. This statistic is 24.9 percent in Sweden, 24.5 percent in Britain, and 22.2 percent in France. It comes as no surprise then that thousands of women from business, civil society, academia, and the arts took part in a coordinated campaign to push for the new quota policy, especially through social media using the hashtag #jetztreichts and #ichwill, meaning "Enough is Enough" and "I Want". Nonetheless, this is only one small step forward. Allmendinger asserted, "Despite our success, we still have a lot to do. The gender issue is just one important dimension."



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