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Germany plans legal quotas for women on non-executive boards

Source: Reuters - Tue, 25 Mar 2014 16:23 GMT
Author: Reuters
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* Plans for legal quotas to affect more than 100 big firms

* Some of Merkel's conservatives criticise plan as tokenism

* Britain, France, Netherlands score better on boardroom equality

By Madeline Chambers

BERLIN, March 25 (Reuters) - More than 100 listed German companies will be required to allocate 30 percent of seats on their non-executive boards to women, under planned new laws which were dismissed by critics as tokenism.

Although Europe's biggest economy has a female leader in Chancellor Angela Merkel, women are under-represented in business life.

Among the 30 largest companies on Germany's blue-chip DAX index, women occupied about 22 percent supervisory board seats and around 6 percent of executive board seats at the end of last year, according to the DIW economic think-tank.

The plans unveiled by centre-left ministers in Merkel's coalition government would apply to listed companies which have employee representation on their supervisory boards - affecting more than 100 firms.

They will be phased in from 2016 - rather than firms overhauling their supervisory boards, they will gradually work towards meeting the quota through filling vacancies that arise.

Companies not meeting the quota will be required to fill vacancies with women or else will have to leave the positions unfilled.

In addition, the plans require about 3,500 firms which are either listed or have employee representation on supervisory boards to set goals to raise the proportion of women on both executive and non-executive boards and in top management from 2015.

If they fail to meet their goals, the firms will have to explain why, under the plans, but no penalty was proposed.

Within the EU, women occupied on average 13.7 percent of corporate board seats of the largest listed companies as of January 2012, according to the European Commission. Germany trailed behind France, Britain and the Netherlands.

"GLOBAL TAIL END"

The German proposals were announced by the family and justice ministers - both from the Social Democrats (SPD) who share power with Merkel's conservatives. They will form the basis for a draft bill which will presented to parliament, and is likely to become law given the coalition's majority.

"We must end the systematic discrimination against women," Family Minister Manuela Schwesig, who aims to prepare the draft law this year, told a news conference. "We are globally at the tail end when it comes to women's quotas. We cannot afford to waste this talent."

Aware the issue is divisive in her Christian Democrat (CDU) party, Merkel has in the past resisted legal quotas.

Kurt Lauk, head of the CDU's pro-business wing, roundly criticised the plans, saying "gender cannot replace qualifications".

"A legal quota is to be seen more as tokenism politics than as a substantive measure," he told German radio, arguing that many supervisory boards had already taken steps to increase the number of women.

Last year Merkel averted a potentially embarrassing defeat in parliament when CDU rebels demanding more representation for women in business accepted a last-minute compromise to adopt in their election manifesto a pledge to make big firms aim to have 30 percent women on supervisory boards in 2020.

The SPD has long pushed for a legal quota and insisted on progress on the issue in its coalition deal with Merkel late last year. (Additional reporting by Holger Hansen; Editing by Stephen Brown and Pravin Char)

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