• Germany's government have moved forward plans to improve gender parity in the workforce.
  • Legislation is expected to be passed this summer, and will affect around 70 large companies in Germany.
  • The legislation will mean boards that have more than three members need to include at least one woman.

Germany's conservatives have dropped their resistance to new legislation aimed at increasing gender equality on management boards after an agreement to give companies more time to adapt and to guarantee female executives maternity leave.

The legislation, which the cabinet approved in January, could now be passed in June after the coalition government's parliamentary groups reached the agreement.

"Highly qualified women still come up against glass ceilings far too often," Justice Minister Christine Lambrecht said.

"There are still pure men's clubs on the boards of directors who like to keep to themselves. This will come to an end in the future."

The new law affects around 70 companies and will force larger listed firms whose management boards have more than three members to include at least one woman.

Firms will be required to report on whether and how they aim to meet the quota. They risk a fine for failing to give a good reason for not setting a target to include any women on their management boards.

The legislation also sets out stricter gender equality rules for government-controlled companies, where boards with more than two members will have to include at least one woman.

Elke Hannack from the German Federation of Trade Unions said the regulation was "a long overdue step" but said it should apply to more companies.

Baby on board?

The legislation also creates a legal right for board members to take up to three months of parental leave and time off to care for family members without having to give up their mandate.

Companies will be given a one-year transition period to select candidates.

A study on Thursday showed the number of women in German boardrooms was only rising slowly and that many large listed firms had none on their management teams.

HeidelbergCement one of 30 firms on the DAX blue-chip index with no women currently on its board, said on Thursday it had created the new position of chief sustainability officer which would be filled by a woman.

What's the World Economic Forum doing about diversity, equity and inclusion?

The COVID-19 pandemic and recent social and political unrest have created a profound sense of urgency for companies to actively work to tackle inequity.

The Forum's work on Diversity, Equality, Inclusion and Social Justice is driven by the New Economy and Society Platform, which is focused on building prosperous, inclusive and just economies and societies. In addition to its work on economic growth, revival and transformation, work, wages and job creation, and education, skills and learning, the Platform takes an integrated and holistic approach to diversity, equity, inclusion and social justice, and aims to tackle exclusion, bias and discrimination related to race, gender, ability, sexual orientation and all other forms of human diversity.

European Commission President Ursula von der Leyen urged companies in March to promote more women to top posts, although efforts to introduce binding quotas for boards of European Union firms have stalled.

Women make up one third of executive boards in Europe's biggest companies but occupy only a small minority of leadership roles, a study showed last year. Norway ranked top for gender diversity, followed by France.