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German cabinet approves female boardroom quota legislation

December 11, 2014

The German cabinet has approved a plan to introduce a 30 percent quota for women in the country's boardrooms. Small businesses are also to be required to take steps to improve workplace equality.

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Image: picture-alliance/dpa

Chancellor Angela Merkel's cabinet, made up of her Christian Democrats (CDU) and their coalition partners, the Social Democrats (SPD), approved a draft law for a female boardroom quota on Thursday.

"This legislation is the start of a process which will change the leadership and business culture in our country," the minister of family affairs, Manuela Schwesig, said following the meeting in Berlin. She described the quota as a "milestone on the path to equality."

The law will make it compulsory for the non-executive boards of at least 108 German companies listed on the stock market to be made up of at least 30 percent women. From 2016, these companies could be penalized if they do not comply with this quota.

The female boardroom quota is to be introduced on a sliding scale in terms of the size of businesses. Smaller companies and public services will also be required to increase the number of women in leadership positions and, starting in 2017, to report regularly on their progress in doing so. However, they will not be subject to penalties if they do not meet their quota.

Government offices will have to set out clear goals for increasing the numbers of women or men in higher positions.

The minister of justice, Heiko Maas, of the SPD, which put forward the draft law, rejected the argument of some opponents of the move, who say that there are not enough qualified women to make the quota work.

"Women have never been as well educated as they are today," Maas said.

The proposal has been a bone of contention among some members of Merkel's grand coalition. The Christian Social Union (CDU), the Bavarian sister party of Merkel's CDU, was among the biggest critics of the female boardroom quota. The CSU had called for the implementation of the quota to be postponed, as well as exceptions for certain companies built into the legislation, fearing that it could damage Germany's economy.

lvw/pfd (dpa / AFP)