Corporate Governance

German parliament legislation to improve gender parity in boardrooms

The River Spree and Alexanderplatz in Berlin.

The law will be introduced summer 2021. Image: Unsplash/ Stefan Widua

Holger Hansen
Writer , Reuters
Share:
Our Impact
What's the World Economic Forum doing to accelerate action on Corporate Governance?
The Big Picture
Explore and monitor how Corporate Governance is affecting economies, industries and global issues
A hand holding a looking glass by a lake
Crowdsource Innovation
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:

Corporate Governance

  • 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.

Have you read?

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.

Discover

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

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.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

Sign up for free

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Corporate GovernanceGender Inequality
Share:
World Economic Forum logo
Global Agenda

The Agenda Weekly

A weekly update of the most important issues driving the global agenda

Subscribe today

You can unsubscribe at any time using the link in our emails. For more details, review our privacy policy.

How true strategic foresight can help companies survive and thrive

Amy Webb

January 31, 2024

About Us

Events

Media

Partners & Members

  • Join Us

Language Editions

Privacy Policy & Terms of Service

© 2024 World Economic Forum