From 2016, women must hold 30 percent of corporate board positions in some of Germany's biggest listed companies. The agreement on a legal quota came after talks among Chancellor Angela Merkel's coalition parties.
Germany's three-party grand coalition agreed on Tuesday night to a compulsory gender quota in the non-executive boards of at least 108 listed German companies. A minimum of 30 percent of the positions in those boards must be held by women, from 2016.
The quota itself was negotiated almost exactly a year ago, but other issues have held up a formal accord among the parties. Chancellor Angela Merkel's conservative Christian Democrats (CDU) - and their Bavarian sister party the Christian Social Union (CSU) - have resisted legal quotas in the past.
The policy was championed by Merkel's junior coalition partners, the Social Democrats (SPD).
The law will apply to listed companies which have employee representation on their supervisory boards. Thousands of other medium-sized companies will be left to determine their own quota for executive and supervisory board positions.
The proportion of men in German boardrooms is still at over 80 percent, despite roughly 40 percent of the federal cabinet being female. According to the DIW economic think-tank, women occupy just 7 percent of executive board seats among the 30 largest companies on Germany's blue-chip DAX index.
A recent survey by the Women in Supervisory Boards (FidAR) found the proportion of women in non-listed supervisory board positions has declined over the past year. That figure is better in public companies, however, in which 18.9 percent of supervisory board positions are currently held by women. Three years ago, it was 10 percent.
Leading German business figures have joined right-wing conservative circles in criticizing the new legislation.
"We absolutely do not need any kind of legal quotas," said Ulrich Grillo, the head of the leading BDI industry association.
A statement from the German government said the law will be adopted next month.
jr/jm (Reuters, dpa)