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Women's quotas

Nina Haase, BrusselsSeptember 3, 2012

The European Commission is increasing pressure on big companies to elevate more women to top positions. Forty percent of supervisory board members are to be women by 2020, according to EU Commissioner Viviane Reding.

Image: dapd

Commissioner Reding has been lobbying to boost the share of women in leadership positions of big companies for a while. Her patience has been running thin lately, with many EU countries - Germany, in particular - failing to improve workplace inequality.

On Monday, Reding's office presented a draft for an EU directive to the other Commission departments, with the goal of getting the directive underway as soon as this autumn, a spokesperson told DW. If it passes, the directive will force all 27 EU member states to introduce laws for a binding gender quota in companies listed on the stock markets by January 1, 2020.

At least two out of fiveDetails from the draft have emerged in the German daily Welt am Sonntag and the online edition of Süddeutsche Zeitung. According to the draft, 40 percent of all supervisory board members would have to be female by 2020. A male candidate would not be given the job in case the list of job applicants included a woman with the same qualifications. "It's important to note that what we're planning is not positive discrimination," the Commission spokesperson told DW. Women would only be chosen for the job over their male competitors if both candidates are equally suited for the position and have the same level of competence and professional performance.

Deutschland Gleichberechtigung Frauenquoten-Konzepte in der Diskussion
In German companies, few women make it to the topImage: picture-alliance/dpa

The rule would not apply to boards of directors as yet. And: small and medium sized enterprises could also continue as usual, even if they are listed on the stock market, i.e. firms with fewer than 250 employees and with an annual sales volume of less than 50 million euros.

Companies that fail to reach the goal would face fines, or their subsidies could be slashed. But it would be up to the member states to decide on which sanctions would apply and when. The European Parliament and a qualified majority of member states in the European Council still have to agree to the proposals.

Problem child Germany

Germany, in particular, has been lagging behind in terms of equal opportunities. EU Commissioner Viviane Reding has expressed her dissatisfaction with Germany's embarrassing state of gender equality in the professional world on several occasions. According to statistics released by the Organization for Economic Cooperation and Development in May, the discrepancy between the salaries of men and women remains largest in Germany.

Women who work full time on average earn about a fifth less than their male colleagues. The OECD figures also showed that Germany ranks very low when it comes to women in the boardroom. German boards of directors are almost exclusively male, with women representing a mere three percent of members. The share is slightly higher on supervisory boards, but a share of only ten to fifteen percent of women is still a far cry from the Commission's goals.

Voluntary scheme is criticizedIn 2011, Family Minister Kristina Schröder, a member of Chancellor Angela Merkel's conservative Christian Democrats, helped companies avert a mandatory gender quota and instead opted for a voluntary scheme. This was met with harsh criticism by the opposition. Politicians in Berlin have since had fierce debates over the possibility of a legally binding quota - even within the ruling coalition of Liberals and Conservatives.

Deutschland Gleichberechtigung Frauenquoten-Konzepte in der Diskussion
Quota or no quota? Schröder, von der Leyen and Merkel are dividedImage: picture-alliance/dpa

In May 2012, Viviane Reding added to pressure, saying she was considering pan-European legislation. "I'm not a fan of quotas. But I do like the results they achieve," Reding told German daily Die Welt at the time.

In Germany, Reding gets support from the country's Labor Minister, Ursula von der Leyen, who welcomed Reding's proposals and told Welt am Sonntag: "If Europe's countries want to remain competitive they need women in the top ranks."

'Not fast enough'

But Europe is not improving gender equality fast enough, say others, like Kerstin Westphal, a European parliamentarian for the Social Democrats. In a press statement, she welcomed Reding's proposals in theory, but added that while Viviane Reding had promised to act for a long time, "The proposals that have now emerged go in the right direction - but they don't go far enough." One of Westphal's biggest points of criticism was that the directive wants to see the quota in action as late as 2020.

The majority of Germany's 30 biggest companies listed on the stock exchange will have to work hard to reach the goal of 40 percent over the next seven years. Today, a mere 19.4 percent of supervisory board members are female. Deutsche Bank is the only one that has already fulfilled the goal proposed by Brussels.

Energy giant RWE's supervisory board consists of 24 people, a mere three of them are women. The company told DW that they support women through diversity management schemes. This includes transparent human resources processes, targeted coaching measures, and a mentoring program. In addition, RWE also supports the network of women in leadership positions and talented young professionals.

But while these measures may help boost the share of women in a company overall, it seems it takes state intervention for top positions to be distributed more equally. France introduced a gender quota in early 2011, and the share of women in leadership positions immediately rose by 10 percent.