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Germany's record for women executives is no accident

Kristie Pladson
Kristie Pladson
January 7, 2022

The number of women on the executive boards of German companies has hit a record high. This kind of change doesn't happen on its own, says DW's Kristie Pladson.

A stock photo showing the silhouettes of a male and female business professional
The number of female executives in Germany want up after a new law was introducedImage: Felix Jason/imago images

Germans can feel proud today. The number of women on the executive boards of Germany's largest companies has jumped to an all-time high. It's a triumph of a political will for change over inertia and archaic worldviews that are keeping the country stuck in the past.

Don't get me wrong. The situation is still utterly embarrassing. New data from EY, a professional services network, shows that the share of women on these executive boards has jumped to an all-time high of 13.4%, up 2.4% from last year.

A headshot of DW Business Report Kristie Pladson
DW business reporter Kristie PladsonImage: Kristie Pladson

This is after years of lagging behind countries like the United States, France and Sweden, where in 2020 women accounted for at least a quarter of executive board members of the top 30 publicly traded companies in each country.

German business' growing taste for girl power might — just maybe — have something to do with a law passed last summer that penalizes big and publicly traded German companies with no women on their executive boards.

This new record shows that quotas and other political interventions are the right tools for getting women (and other disenfranchised groups) their fair share of opportunities. And they should be used to attack gender inequality along the whole human resource supply chain.

Many problems to solve

For example, while on paper Germany has a progressive and equitable parental leave policy, in practice, old-fashioned attitudes about gender roles and the pay gap discourage women from pursuing a career like their husbands and partners do. Requiring (and compensating) a father to stay home longer following the birth of his child would remove the cultural and financial pressure for him to return to work, and would even the playing field for when working mothers return.

There's also the problem of Germany's income tax regime. As it currently stands, if one partner in a marriage earns significantly less than the other, the law strongly disincentivizes them from working. With women in Germany earning on average around 18% below what men do, in heterosexual relationships this almost always applies to the woman.

Feeding the pipeline

Germany is known for its manufacturing and engineering prowess, fields traditionally dominated by men. The pool of female talent qualified for an executive role isn't large enough, is the argument that quickly follows.

Today, targeted efforts on the part of universities and the state have led to increased gender parity in fields of study favored by men, like science, technology, engineering and mathematics (STEM). In 2019, 24% of mechanical engineering students in Germany were women, according to the National Pact for Women in STEM Careers. Imagine the dynamic pools of talent we'd build if these degree programs were required to train a certain number of women. Women-dominated fields, like education and nursing, would also benefit from similar quotas for men.

As chart showing share of women on the boards of large companies

A business case for equality?

Some probably feel these measures aren't necessary to begin with, and that it's a distraction from the day-to-day business of making cars or machines or chemicals. That's always a cue for the other side to trot out those studies showing how diverse teams result in improved economic performance. This might convince the greedy cynics among us. It clearly hasn't convinced German business leaders, who only with looming threats of duress have started to hire women executives.

The economic argument isn't only ineffective. It's also beside the point. In a democratic society, the professional opportunities available to me shouldn't be tied to how profitable my gender, race, religion or sexual orientation is to my employer.

Germany is an unusually consensus-oriented country and oftentimes slow to change. This new crop of women executives shows, however, that a will for progress can break through.

Edited by: Rob Mudge

Equal rights? Equal opportunities?

Kristie Pladson
Kristie Pladson Business reporter, editor and moderator with a focus on technology and German economy.@bizzyjourno