Quota call Women still shut out of German boards

With a study showing Germany still far behind its main rivals in putting more women into senior management roles, particularly in finance, calls are growing for more stringent mandatory quotas.
No place for a lady in Germany.

When Germany announced in 2015 that it would be introducing a law enshrining a 30 percent minimum quota of women on the boards of big listed companies, the country’s glass ceiling wobbled.

But since the law was enacted in 2016, it seems it’s been as rock solid as ever. According to a new study by the Berlin-based German Institute for Economic Research (DIW), the country still lags behind other top economies when it comes to supporting female entrepreneurs – especially in the financial sector.

The institute analyzed the proportion of women in management and non-executive supervisory boards between 2006 and 2017 and came up with what it called a Female Managers Barometer. Handelsblatt has obtained exclusive excerpts.

The study shows that there’s been virtually no progress. “The 10-percent level still hasn’t been cracked in the financial sector — or put differently, men still occupy more than 90 percent of management board seats,” wrote the authors.

It would take a further 70 years before both sexes are equally represented in the management boards of banks and insurers. Elke Holst, DIW Research Director

A key problem is that the quota law only applies to seats on supervisory boards at 100 big listed companies. There’s no mandatory quota for management board seats, only voluntary targets.

German Family Affairs Minister Katarina Barley of the center-left Social Democrats said this was not good enough. “A women’s share of less than 10 percent in the management boards of the big German banks is unacceptable,” she told Handelsblatt. “We need clear rules where self-imposed targets don’t work. Otherwise, there will be no change in the male-dominated boardrooms.”

DIW registered what it called “weak momentum” for change in management posts. For example, at the end of 2017, 32 of Germany’s 100 biggest banks had at least one woman on the management board — just two more than the previous year.

The proportion of women on bank management boards amounted to just under 9 percent — a rise of just half a percent on 2016. Five women were chief executives, one more than in 2016.

The problem is more than familiar in Germany. An international study published in mid 2015, the Dell Global Women Entrepreneur Leaders Scorecard, showed Germany coming off particularly badly by comparison with other countries, reaching just 61 of 100 possible points, far behind the United States, Canada, Australia and Sweden.

DIW did at least register a small improvement in the supervisory boards of German banks, with the proportion of women in board seats rising by one percentage point to just under 23 percent. But only six banks had a supervisory board chairwoman in 2017, one fewer than in 2016.

At Germany’s 60 biggest insurers, the share of women even fell, both in management and supervisory boards, to 9 percent and 22 percent respectively. Some 83 percent had at least one woman on their supervisory boards, and only three companies had a woman as supervisory board chief.

DIW gave a gloomy outlook. “Based on a simple linear continuation of the development since 2006 it would take a further 70 years before both sexes are equally represented in the management boards of banks and insurers,” Research Director Elke Holst told Handelsblatt.

Women’s groups have been calling for legislation to expand the mandatory quota to management boards. Voluntary agreements between the government and private sector have blocked progress for years, said Mona Küppers, chairwoman of the National Council of German Women’s Organizations.

A quota for supervisory boards had led to swift and clear improvement, she said, calling for a 30-percent minimum for management boards and the two executive management tiers below them. The quotas, she stressed, should be enforced with effective sanctions. “Then it definitely won’t take 70 more years before both sexes are equally represented,” she said.

Family Affairs Minister Ms. Barley said the German economy can’t afford to let the potential of highly qualified women go untapped. The Social Democrats pledged a firm quota of 50 percent in their manifesto for last year’s election. They are currently in talks to form a new government with Chancellor Angela Merkel’s conservatives.

Ms. Holst said one solution was for companies to attract women by modernizing their culture, allowing greater job flexibility and part-time arrangements for women with families, and making sure that their careers don’t suffer if they use those options. “If nothing happens, the public pressure will definitely increase,” she said.

Dietmar Neuerer covers domestic politics for Handelsblatt from Berlin. Dana Heide is a political correspondent for Handelsblatt in Berlin. To contact the authors: [email protected], [email protected]