December 22, 2014

Germany to adopt boardroom gender quotas

Germany has passed legislation requiring at least 30% of seats on the boards of public companies to be held by women.

The legislation, which will come into force in 2016, will apply to companies that have employee representatives on their boards. It is expected to affect around 100 large firms.

Currently 80% of Germany’s boardroom positions are held by men, and the gender pay gap stands at 22%, compared to an EU average of 16%. Other European countries, including Norway, France, and the Netherlands, have adopted similar quota legislation in recent years.

The “Frauenquote” law has proved controversial in Germany, and has faced resistance among both the center-right CDU party and business leaders. Ulrich Grillo, head of the BDI industry association, said “We absolutely do not need any kind of legal quotas”.

Writing in the New York Times, Carrie Lukas, head of the Independent Women’s Forum, wrote that “A distraction at best, [quotas] may undo women’s historic gains by suggesting that we cannot succeed on our own”.

Nina Smith has written about board gender quotas for IZA World of Labor. She argues that “Current research does not justify gender quotas on grounds of economic efficiency”, and that politicians might do better to “change the focus from quotas at the top of the organization to the much broader task of getting a more equal gender division of careers within the family.”

Meanwhile, Ghazala Azmat writes that gender diversity policies may have some negative impact in the short term, but “this does not necessarily reflect the potential positive long-term influence on gender equality and better representation of women’s preferences”.

Read more here.