The new year has actually started well for women: Allianz has had four women on its board since January, more than in any other DAX company. With the new CFO Claire-Marie Coste-Lepoutre, the proportion of women in the top management of the traditional Munich group rose to 44 percent. And things are also happening in other companies when it comes to gender equality: The DAX giants Siemens Healthineers, Beiersdorf, Merck and Zalando have now almost equal representation on their boards.
Even the largest German union, whose members are 80 percent men, now has a female boss: Christiane Benner has been the first woman to lead the powerful IG Metall since October. It can be said that the leadership of the German economy has never been as female as it is today.
But that’s where the good news ends. The momentum in appointing women to the boards of German companies has recently slowed. Comes to this conclusion a study by the personnel consultancy Russell Reynolds Associates. Accordingly, the number of female board members who left the leading index of the 40 largest listed companies in Germany recently exceeded the number of new appointments. Nine top women left office in 2023, but only eight were appointed to senior leadership bodies. Even more frightening: According to the human resources consultants’ analysis, women are five times more likely than men to give up their positions within the first three years.
Four out of five women who left a DAX board in 2023 only held their position for three years or less. Of the men who were eliminated, this only applied to one in seven. While the board members had an average term of office of almost eight years, the female board members only managed an average of just under three years. One might think that while men stick to the executive chair, it becomes an ejector seat for women.
But the matter is not quite that clear, because the numbers are not really meaningful. On the one hand, it is a very small sample (only nine women and 31 men left DAX boards in 2023), which does not allow any representative conclusions to be drawn. In addition, the relatively short tenure of women can also be explained by the fact that top female managers are currently in high demand. Because companies want women on their boards, they can often choose the jobs. Some people may therefore be more willing to change positions if there is a better offer. Male managers are in comparatively less demand.
But one thing is certain: fluctuation on boards of directors – regardless of gender – was above average last year. That also proves it a study by the German-Swedish Allbright Foundation from autumn 2023: Accordingly, between September 2022 and September 2023, a total of 19 women and 106 men resigned from their board mandate for various reasons. This is an unusually high number and shows that overall length of stay in top jobs is falling.
The momentum in appointing women to top positions is decreasing
If you look at the average tenure of men and women over a longer period of time, you can see that women actually sit somewhat more securely in their executive chairs than their male colleagues. According to the Allbright study, over the past five years, on average only 14 percent of women, but 16 percent of men, have left the board in the course of a year.
There is no doubt that the momentum in appointing women to top positions has waned: after the historically largest increases in the proportion of women on DAX boards in 2021 and 2022, it recently leveled off at around 23 percent.
This also has to do with a law that has a cumbersome name – Second Management Positions Act – but pursues a simple goal: get more women on boards. It stipulates that listed companies with equal co-determination and four or more board members must bring at least one woman into the team. The law came into force in August 2022. In the previous six months, a third (33 percent) of all new board positions to be filled went to a woman. In the six months after it came into force, almost two thirds (64 percent) of all DAX board positions went to women. In 2023, however, the proportion of female new appointments has fallen to 22 percent.
“We are observing a similar development on the boards of directors as we saw on the supervisory boards at the time: When the quota is met, the positive trend comes to an end,” says Jens-Thomas Pietralla from Russell Reynolds Associates. He sees this as “a setback for efforts to achieve more diversity on boards of directors.” The prominent new additions of recent times are unlikely to change this.