Von der Leyen wants to force companies to have more women on the supervisory board – economy

If there’s one thing that can be said about the legal women’s quota, it’s this: it didn’t collapse the German economy. All the quota opponents had ranted and warned: There simply weren’t enough qualified women out there for Germany’s supervisory boards. Then came the quota, the companies appointed one woman after the other to their supervisory bodies. And that didn’t detract from the quality of their work.

If there is anything else that can be said about the legal quota for women, it is also this: it has not led to a fundamental rethink. Although it turned out that the inspectors did a good job, very few companies hired more women than they were required by law to do. The number of female managers on the executive boards also increased only very slowly.

Ursula von der Leyen has learned from Germany and now wants to do something similar for the whole EU – and even more, which in turn would have consequences for German companies. The EU Commission President wants to see 40 percent women on European supervisory boards. “It is time to move this dossier forward,” she said. The background is a draft for an EU directive that was discussed ten years ago, she said, and immediately put political pressure on the new German government. Germany had always blocked the old advance. Von der Leyen now hopes that the new traffic light government will give up its previous resistance. Germany must catch up.

Federal Family Minister Anne Spiegel (Greens) welcomed the move. The proposed management positions directive could give equality between men and women Europe-wide a boost, said Spiegel on Thursday. “As Federal Minister for Women, I will work to ensure that Germany, together with other member states, promotes equality in Europe.”

France is the leader in the EU with the highest proportion of women on supervisory boards, 45 percent

According to the Allbright Foundation, which specializes in women in business, 32.9 percent of all supervisory boards of the 160 German stock exchange companies surveyed were women at the beginning of September. Since 2015, a quota of 30 percent has been prescribed for new supervisory board positions in listed companies that are subject to full co-determination. But since this 30 percent was reached, the proportion of women has stagnated just above the value, in the twelve months before the September census it had risen by just 0.8 percent. Von der Leyen is ready to work with France to push the directive forward during the government’s six-month EU presidency in Paris, she said. It should now be quick, one could “definitely” agree on 2022. France is the leader in the EU with the highest proportion of women on supervisory boards: 45 percent.

The EU has determined that women’s quotas work – and enormously. From a similar level in October 2011, when all were around 13 percent, the proportion of women in countries that have enacted legislation has increased significantly faster than in countries that have not enacted legislation and opted instead for insight of companies hoped. The proportion of women in countries with statutory quotas for supervisory boards is 36.4 percent, an increase of 23 percentage points. In the countries that have not acted so far, it has increased by just 2.8 percentage points to 16.6 percent, according to a previously unpublished survey by the European Institute for Gender Equality, published by the Süddeutsche Zeitung is present.

Under the then EU Justice Commissioner Viviane Reding, there was a corresponding push for a quota of 40 percent for large companies in 2012, which was rejected by the federal government under ex-Chancellor Angela Merkel. Von der Leyen was Minister of Labor and Social Affairs at the time. Countries like Denmark, the Netherlands, Poland and Sweden were also against Reding’s initiative. “I’ve learned that you need a legal framework that pushes companies in the right direction in order to reach a critical threshold of women on supervisory boards,” says von der Leyen today.

The coalition agreement between the SPD, Greens and FDP does not contain any provisions on the EU quota for women. In addition to the quota for supervisory board members, Germany has also had a rule for company executive boards since last summer: In large companies that are listed and have equal co-determination, there should be at least one woman on the executive board if there are four or more board members. However, the new law only affects very few German companies, which can also circumvent it by choosing the legal form of an SE, the European stock corporation.

Small and medium-sized companies are also excluded from the EU Commission’s proposal, which is now being discussed again. There should also be an opportunity for member countries to set a lower target of 33 percent female inspectors, which would apply to companies that have only one board of directors instead of the usual separate executive and supervisory boards, EU sources say. The same should be possible if the company has less than ten percent women in the workforce. The targets are to be achieved through transparent selection procedures. If there are equally qualified applicants of both sexes, preference should always be given to the female applicant. Incidentally, if there is a surplus of women in the workforce and management team, the rules would also apply to the participation of men. Sanctions for companies that do not comply with the quota are not planned. But they would have to explain why they are not able to fulfill them. In addition, EU countries could impose penalties at national level. If there is now a majority among the EU countries, the European Parliament has to agree.

A topic that is often forgotten in the debates is the payment of the inspectors and their respective positions of power within the committees. On average, female supervisory board members in Germany receive lower remuneration than supervisory board members because they chair the board less often and are less frequently represented on important committees such as the Presidential Committee. At the end of September, ten out of 160 German supervisory board chairmen were women – more than ever before, and still very few.

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