German female executives quota ‘is a paper tiger’

Germany at the start of the year introduced a corporate “women’s quota” obliging its 100 biggest companies to fill at least 30 percent of their supervisory board seats with females.

German female executives quota 'is a paper tiger'

But for many, including several of the women executives themselves, the new legislation has so far proved something of a “paper tiger”.

“The law is addressing the tip of the iceberg and we need to make sure that we change more than that,” said Belen Garijo, board member at pharmaceuticals specialist Merck KGaA.

The 55-year-old Spaniard is the first woman to hold such a position at the world’s oldest pharmaceuticals maker, based in Darmstadt.

But for her, what counts are the competence and skills required for the job rather than quotas like the one Germany introduced on January 1st.

“If someone were to tell me, ‘you sit on the board because you’re a female’, that would reduce me to tears,” she said.

Claudia Nemat, a board member at Deutsche Telekom, also said that such “legislation makes no real difference”.

“Companies must understand that diversity — both on the executive and supervisory boards — gives them a competitive advantage,” she said.

“We need men and women with international experience, both young and old.”

The German drugs and telecoms giants can be viewed as pioneers in a country where the glass ceiling for women is still very much a reality.

Both groups have female executive board members and more women on their supervisory boards than the 30-percent minimum required by the new law, which came at the insistence of the junior partner in the ruling coalition, the Social Democrats.

Under the law, if women cannot be found to fill 30 percent of supervisory board seats, then those seats must remain empty.

By fixing a quota, Germany is following in the footsteps of Norway, a pioneer in gender equality, and European neighbours such as France, Spain and the Netherlands.

Big companies, and 3,500 small and medium-sized enterprises, must also fix their own voluntary goals for women on their management boards and provide regular updates on the progress they make.

The new legislation “marks some progress, but let’s hope things aren’t going to proceed at the same snail’s pace” as in the past, said Elke Holst, research chief at the economic think tank DIW.

The institute has been monitoring the number of female top executives in Germany’s 200 biggest companies for more than 10 years, and the results aren’t good.

At the end of 2015, just six percent of the firms had female executive board members, and just under 20 percent had women on their supervisory boards.

“The situation has improved slightly, but not very much with regard to the executive board positions,” Holst said.

There were no women at all on the management boards of groups such as Volkswagen, Commerzbank or Beiersdorf, maker of Nivea products.

On Germany’s current trends, gender parity won’t be attained before 2040 on supervisory boards, and not until next century on executive boards, the expert has calculated.

Holst said that without real sanctions for corporate laggards, the new legislation would remain a “paper tiger.”

Yet many women executives fear that penalising companies that don’t promote enough females to board positions could be counter-productive.

-more at The Local



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