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Boardroom shake-up

October 17, 2011

Germany's top 30 businesses have presented their plans to get more women into the top ranks - and have rejected mandatory quotas. But Chancellor Angela Merkel's government can't agree on their own solution.

A woman stands in front of a presentation showing bar graphs
Merkel, von der Leyen and Schröder want women in powerImage: picture-alliance/dpa

Germany's 30 largest companies on Monday announced their individual goals to increase the number of women in corporate leadership, in the hopes of muting calls by some politicians to legislate gender ratios in the boardroom.

The 30 blue-chip companies which make up the DAX stock index each presented their own specific plans, and they did not have a common definition for what constitutes a leadership position. But European Union Justice Commissioner Viviane Reding said the proposals were "a first step in the right direction."

Reding, who has threatened to impose gender quotas in all 27 EU countries if self-regulation does not make a big enough change by March 2012, added that "the biggest companies in Europe's biggest economy appear to have seen the sign of the times. More women in leadership positions are good for operational results."

These goals come as the German government debates the best way to reduce the gender disparity in the upper-level management of German companies. Some in the governing coalition think a form of quotas is the answer, while others are not convinced.

'Enough lip service'

Businesswoman making presentation
Different corporations have very different ideas on how many women they want on their boardsImage: BilderBox

Critics say forcing gender quotas on corporations would mean pumping "token women" into top management - but Simone Denzler of Business and Professional Women (BPW) Germany argues that Germany's 98-percent male management boards are evidence that there already is a gender quota.

"What man is afraid of being labeled the token man?" she asked, answering her own question: "All of them are quota-filling men."

Denzler - like some of Germany's top-ranking women politicians - wants to see legislation dictating women's rise in corporate ranks. "Up until now voluntary regulation hasn't worked," she said.

Kristina Schröder, Germany's Minister for Family, Seniors, Women and Youth, and Labor Minister Ursula von der Leyen see the matter similarly. Ahead of Monday's summit of corporations, Schröder said she wants to introduce a fine for companies lacking female leadership.

"If still nothing changes at the top levels of the DAX corporations, we will need a law," von der Leyen told the Sunday newspaper Frankfurter Allgemeine Sonntagszeitung. "That's my strong belief."

Schröder is also in favor of a law - but only one that would require companies to follow through on their own self-imposed goals.

"The flexible quotas that I envision for executive and supervisory boards would allow companies complete freedom in decision-making and design, while at the same time achieving the greatest degree of legal obligation," Schröder told the business weekly WirtschaftsWoche.

Ursula von der Leyen
Von der Leyen says having women at the top will be a signal of cultural changeImage: dapd

Corporate discrepancies

A report by the Munich-based paper Süddeutsche Zeitung said Germany's companies are resistant to taking orders on the makeup of their executive and supervisory boards - even if they are willing to make changes.

Companies differ on both the number of women they want in top positions and their proposed timelines. Sporting goods maker Adidas gave itself the most ambitious goal, seeking to fill between 32 and 35 percent of its leadership positions with women by 2015.

Insurance company Allianz, pharmaceutical company Bayer, banking giant Commerzbank and telecommunications company Deutsche Telekom said they want to have 30 percent female leadership by 2015.

Other DAX companies like BMW and Daimler were less ambitious, with quotas of 20 percent and longer timelines. Meanwhile, health care company Fresenius said it would continue to consider "qualifications and not gender or other personal characteristics in employment decisions."

Trailblazers and sticks in the mud

Von der Leyen has not been deterred by the critics. She has said her ministry will examine the gender makeup of every single corporation.

"There are trailblazers and then there are sticks in the mud," she told the Frankfurter Allgemeine Sonntagszeitung. " A true cultural transformation must also be visible at the top. Otherwise it sends a signal to all talented women in Germany and abroad: 'You can work here, but to pursue a career you'd be better off somewhere else.'"

Philipp Rösler
Rösler says corporations don't need laws to encourage self-imposed goalsImage: dapd

Von der Leyen said a law was needed "that defines clear goals and a timeline - and what will occur if the goals aren't met." The labor minister would like to see such a law come into enforcement on July 1, 2012.

Before that can happen, German Chancellor Angela Merkel must be convinced the move is necessary. Earlier this year, von der Leyen's push for a gender quota met with opposition from Merkel, leading to an agreement that the companies should work toward goals to which they committed voluntarily.

Equal mediocrity?

Simone Denzler said she could live with either of the ministers' proposal, though she said she prefers the von der Leyen approach.

She said she is not concerned that a legalized gender quota could lead to underqualified female leadership. "There are so many mediocre men in top management. There won't be real equality until there are just as many mediocre women."

Economy Minister Philipp Rösler, a member of Merkel's coalition partner the Free Democrats, has rejected binding quotas. "Already today, anyone can voluntarily say what quota he wants to meet," Rösler told WirtschaftsWoche.

Disagreement over the issue continues within Merkel's governing Christian Democrats and with their coalition partner, meaning the possibility of gender quotas becoming law remains a slim one.

Author: Tobias Oelmaier / dl
Editor: Mark Hallam