It’s Easier for a Woman to Become Chancellor Than CEO in Germany
Critics say it lacks both ambition and teeth.
Germany’s proposed bill to set quotas for women on executive boards is touted by its backers as a breakthrough for the country’s gender-equality push. Its detractors, however, point out that it will still leave Europe’s biggest economy with among the most male-dominated corporate suites in the developed world.
Germany, whose Chancellor Angela Merkel is the longest-serving female head of state in the world, has one of the poorest records for promoting women in business in Europe. The quota bill -- asking companies to have at least one woman on their management boards -- will bump up the share of female executives to about 15%, taking Germany’s ranking to about 17 from 24 in the 27-member European Union, according to Boston Consulting Group.
“I don’t believe it’s going to create the impact you’re wanting,” Maria Ferraro, chief financial officer of Siemens Energy and among the few high-profile women in corporate Germany, said in an interview. “One individual who is different doesn’t do the trick, though it is progress.”
The bill, to be presented to cabinet in coming days, requires boards with four or more members to have at least one woman. But since it demands nothing from boards with fewer than four members or those that already have a female executive, it would only affect about 30 of the country’s top 107 companies.
The proportion of women on executive boards at Germany’s 30 biggest listed companies fell 1.9 percentage points this year to 12.8%, compared with 28.6% in the U.S., according to the Allbright Foundation, which promotes diversity in management. About a third of Germany’s top 100 companies have no women on their management boards.
The failure to add women comes in the face of evidence that of the 100 largest listed companies, the 30 with the most gender diversity outperformed the benchmark DAX index by more than two percentage points. Also, if corporate Germany doesn’t buy into management diversity more fully, it risks blunting its competitive edge, cautions Ferraro.
“Everybody loves that stamp of ‘engineered in Germany,’ but how is a homogenous pool of individuals going to be able to solve the world’s problems if they can’t understand the world’s problems and talk the language?” she asks.