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Women as senior managers, let alone board members, are a scarce commodity in German companies. A planned quota by one of the country's largest blue-chip companies could signal change.
Deutsche Telekom wants more women to climb to the top of the telecoms company
German telecommunications giant Deutsche Telekom will introduce a quota for female managers, aiming to fill 30 percent of middle and upper management jobs with women by the end of 2015, the Bonn-based company said Monday. It will be the first on Germany's 30-member-strong DAX index of blue-chip stocks to launch such a quota.
Previous efforts by Deutsche Telekom to increase the number of women in management positions were “well-intended but not overly successful,” a spokesman said. Of the 130,000 people employed by the company in Germany, only 32 percent are women and just 13 percent of jobs in middle and upper management are held by women.
Hiring women to achieve a competitive edge
By setting a quota and reporting on progress, the company aims to create momentum – and pressure – internally to boost the overall number of female managers, according to the spokesman. “This is not about hiring women just for the sake of hiring women but about achieving a competitive edge by tapping into talent,” he said, pointing to the growing number of women graduating from German universities, now at 60 percent of the total.
Experts agree. “If you're not hiring women these days, you're really focusing on only half the talent that's out there,” said Candace Johnson, who helped launch the SES/Astra satellite group and the Europe Online venture, and is the founder of the Global Telecom Women's Network.
Deutsche Telekom CEO Rene Obermann hopes to tap more women for more talent
But is Deutsche Telekom's voluntary move to introduce a quota enough? A debate has been raging across Europe on whether self-regulation or legislation is the way to go to bring more women into the top echelons of European companies.
Self-regulation or legislation
“As an economist, I'm for self-regulation and creating voluntary incentives for companies to hire women,” Elke Holst, from the German Institute for Economic Research (DIW), told Deutsche Welle. “But, personally, I feel too little has happened and stronger action, such as legislation, may be necessary.”
According to DIW, only 2.5 percent of all executive board members in Germany's 200 largest companies (excluding the financial sector) are women, and only 10 percent of all seats on supervisory boards are occupied by women.
In the financial sector, the situation is similar: In the largest 100 banks, 2.6 percent of all executive board members are women, and in the 62 largest insurance companies, 2.8 percent of executive board members are women. Their presence on supervisory boards, however, is slightly higher than in the top 200 companies: 16.8 percent in banks and 12.4 percent in insurance companies.
Overall progress in Europe has been slow, with the exception of Norway. In 2008, the Nordic country introduced a law mandating a 40 percent representation of women in boardrooms, with penalties for those companies that fall short of the quota.
According to a study conducted by the European Professional Women's Network (EPWN), the percentage of women on boards in Europe's 300 largest companies was 9.7 percent at the end of 2008, up from 8.5 percent in 2006 and 8 percent in 2004. Without Norway, the percentage dropped to 9.1 percent.
“We conduct the study only every two years because, as you can see, there has been very little progress,” said current EPWN president Monica Pesce, who is also president of the Professional Women's Association in Italy.
Trend toward 'soft targets'
Some women executives believe legislation is needed to kick-start the process of moving more women into management jobs and boardrooms. “The trend across Europe has been for what I call ‘soft targets,' which are voluntary efforts not driven by law,” said Mirella Visser, a supervisory board member of Royal Swets & Zeitlinger in the Netherlands and former EPWN president. “The problem with these targets is that if companies don't meet them, they don't need to explain why not.”
Minister Kristina Schroeder prefers self-regulation over legislation
The German association Women on Supervisory Boards (Fidar) is demanding binding laws that "bite" if women's quotas aren't met. In addition to Norway, the association points to a number of European countries with quota legislation in the works, including Finland, Sweden and France. On Monday, Fidar held a conference in Berlin on the topic of women on supervisory boards.
Not all agree on way forward
While many women view laws as the only way to jar boardroom doors open for female colleagues, others see them as the last resort. Kristina Schroeder, Federal Minister for Family Affairs, Senior Citizens, Women and Youth, said in a statement that efforts to advance women “must gain the business world's support and not fight against it.” The minister referred to Deutsche Telekom's announced quota as a “fine example.”
But not all women agree that quotas are the ideal solution. “Quotas can guarantee equality but not necessarily merit,” EPWN president Pesce said. “There's a big discussion about this across Europe. Personally, I believe we should support talented women and make them more visible. And that's exactly what we're trying to do in our Italian arm of the European Professional Women's Network.”
Author: John Blau
Editor: Susan Houlton