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Germany: Gender Quotas for Large Companies and for Federal Bodies

(Mar. 17, 2015) Germany’s Parliament has adopted a law aimed at increasing the number of women in leadership positions in the private and public sectors. The Bundestag, the lower house of Germany’s Parliament, passed the law on March 6, 2015. (Colleen Mallick, German Parliament Approves Gender Quota Legislation for Large Companies, PAPER CHASE (Mar. 6, 2015); Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungspositionen in der Privatwirtschaft und im öffentlichen Dienst [Law for the Equal Participation of Women and Men in Leadership Positions in the Private Sector and the Public Sector], Deutscher Bundestag Dokumentations-und Informationssystems (DIP) website, ID: 18-64384 (last visited Mar. 12, 2015) (in German).) 

The law was formulated jointly by the Federal Ministry for Family, Senior Citizens, Women and Youth (BFMSFJ) and the Federal Ministry of Justice and Consumer Protection (BMJV). (See, for example, BFMSFJ & BMJV, Fragen und Antworten zu dem Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungspositionen in der Privatwirtschaft und im öffentlichen Dienst [Questions and Answers About the Law for the Equal Participation of Women and Men in Leadership Positions in the Private Sector and the Public Sector] (Mar. 5, 2015), BFMSFJ website.)

Features of the New Law

Under the legislation, more than 100 companies that are listed and that have co-determination (i.e., employee representation on their supervisory boards) will be required to set aside at least 30% of the new board seats for women from 2016. As of 2018, the proportion of women must be increased to 50%. (Caroline Copley, German Parliament Approves Legal Quotas for Women on Company Boards, REUTERS (Mar. 6, 2015); Bundestagsbeschlüsse am 5. und 6. März: Frauenquote für Führungspositionen beschlossen [Bundestag Decisions on 5 and 6 March: Quota for Women in Leadership Positions Decided on], Bundestag website (last visited Mar. 12, 2015).)

About 3,500 medium-sized companies that are either listed or co-determinant would be required to set their own targets to increase the proportion of women on their supervisory boards and boards of directors and at the top management levels. If the quota is not met, the companies will be required to fill any vacant positions with women or leave them empty. (Copley, supra; Bundestag beschließt Gesetz zur Quote [Bundestag Passes Quota Law], Federal Ministry for Family, Senior Citizens, Women, and Youth website (Mar. 6, 2015).)

In accordance with the new law, the Federal Equal Opportunities Act and the Federal Act on Appointment to Federal Bodies will be amended to increase the proportion of women in management positions in government service. (Gesetz zur Gleichstellung von Frauen und Männern in der Bundesverwaltung und in den Gerichten des Bundes(Bundesgleichstellungsgesetz – BgleiG) [Act on Equality Between Women and Men in the Federal Administration and the Federal Courts (Federal Equal Opportunities Act – BGleiG)] (Nov. 30, 2001, as amended Feb. 5, 2009), JURIS [online legal database on the Federal Ministry of Justice and Consumer Protection website]; Gesetz über die Berufung und Entsendung von Frauen und Männern in Gremien im Einflußbereich des Bundes (Bundesgremienbesetzungsgesetz – BGremBG) [Law on Appointment and Posting of Women and Men in Federal Bodies] (June 24, 1994), JURIS; see also GLEICHSTELLUNG VON FRAUEN UND MÄNNERN IN DER BUNDESVERWALTUNG UND IN DEN GERICHTEN DAS BUNDES [GENDER EQUALITY IN THE FEDERAL ADMINISTRATION AND IN THE FEDERAL COURTS] [brochure with the texts of the relevant laws and commentary] (May 2014).) From 2016, a quota of at least 30% for all new appointments will apply to positions in supervisory bodies where at least three seats are available to the Federal Government. (Bundestag beschließt Gesetz zur Quote, supra.)

Current Position of Women in Companies

According to a recent survey cited by Reuters, women “remain grossly under-represented in business life” in Germany, and “there is not a single female chief executive among the 30 largest firms on Germany’s blue-chip DAX index.” (Copley, supra.) Furthermore, in DAX companies, “women occupy only 7 percent of executive board seats and barely 25 percent of non-executive board seats, … although that is above the 20 percent European average for women, according to EU data.” Moreover, “59 percent of mid-size companies in Germany did not have a single woman in a leadership position, compared to the European Union average of 36 percent.” (Id.)

The Reuters article notes that Norway was the first country, in 2003, to implement a gender quota, of a minimum 40%, for women on the boards of the country’s public limited companies. France, Spain, and the Netherlands also now have such quotas, and the United Kingdom is deliberating a bill on the subject. (Id.)