Germany, European Parliament separately back quotas for female board members

Quotas back on the agenda at listed European corporates

Party officials negotiating the formation of the new German government have already agreed on one key measure: a requirement that by 2016, at least 30% of board seats at listed German firms be held by women.
It comes as the European Parliament this week approved a draft measure that, if introduced, would set a similar quota at 40%.
Officials from Germany’s conservative CDU/CSU party and the Social Democratic Party (SPD), are holding talks in Berlin to form the next government by Christmas.
They have also agreed that from 2015, the country’s biggest companies must unveil binding plans for how they will raise the number of women in the boardroom and upper management. A minimum quota for female executives at big German firms, which the SPD ardently backs, was not agreed to.
Speaking after the agreement, Manuela Schwesig, the SPD’s head negotiator for labour and social issues, said the 30% quota for female board members was an important step towards “improving social mobility for women and ensuring more justice in the labour market.”
Annette Widmann-Mauz, Schwesig’s counterpart at the CDU/CSU, said she was pleased the SPD realised that a fixed quota for female executives was not workable and possibly unconstitutional. “That’s why I’m happy that we came to a compromise on the female executive question,” Widmann-Mauz added.
German shareholder group DSW said that while the quota would be effective in diversifying the boards oflisted German firms, those same firms would face difficulty in filling seats with women.
“We think the next government should give them more time to meet the quota, as most of the current board members were elected during the annual general meetings (AGMs) for this year,” said DSW spokesman Jürgen Kurz. Kurz also said that from the standpoint of shareholders, it was crucial that listed German firms appoint women who are qualified.
“What we don’t want to see is a mad scramble among the firms to fill the seats with just anyone.”
In 2001, when the SPD governed in a coalition with the Green Party, another firm supporter of female quotas, corporate Germany agreed to a voluntary inclusion of more women in their boards and upper management. Today, the share of female executives and board members stands at just under 12%.
In related news, the European Parliament this week approved a draft directive that would mandate listed companies to have at least 40% of their non-executive board members be women by 2020. Smaller firms would be exempt. The Parliament must now seek to agree the measure with heads of EU governments, nine of whom, according to press reports, reject a quota for female board members. The Parliament’s Women’s Rights Committee ‘co-rapporteur’ Rodi Kratsa-Tsagaropoulou said it was essential for companies to evolve so as to include highly skilled women in their decision-making processes.