It’s been three months since the law that made a certain quota of women on the boards of directors of large companies went into effect. We already covered the details of the law in a different article in this blog. Now the Federation of German Industry (BDI) did a first survey of the current situation. At least for those familiar with the subject the results are not very surprising.

 

The 30 largest DAX companies, on average, have nearly reached the quota of 30%. About 27% of the seats are held by women. These companies have two years to fully reach and preferably surpass the 30%. If they don’t, those seats have to remain empty. The latter scenario is unlikely for those companies, though. The damage to the company reputation should they get accused of sexism is something they cannot afford, especially since many of them are running advertising campaigns for women in leadership positions.

 

“That those great strides toward gender equality happened already without any law only proves that it doesn’t take a strict quota. The change is in the companies’ own interest.” Chief Executive Markus Kerber of the Federation of German Industry (BDI) said during the presentation of the study. How much of that improvement until spring 2015 was due to the impeding law is hard to tell, though. Advocates of the quota suspect the companies were merely trying to keep up the appearance that the change would happen without any law.

 

A look at less prominent and smaller countries reveals a different situation, though. The main M-Dax and Tec-Dax still need to do their homework. There are some good examples, but overall women hold only 17% of board seats. We are talking about 100 companies for which the 30% rule is mandatory.

 

4000 more companies are affected by the more flexible rules; they need to set themselves a specific goal for increasing the number of women on the board of directors. The goal then needs to be reached by July 2017. Only those companies with the fixed 30% quota need to fear repercussions if they fail to reach that number.

 

The Federation of German Industry warned the ministry not to further tighten the still fairly new law. They are also trying to lower expectations of the quotas, mainly because of the short time limit before the law went into effect, warning that that might make it look like the initial goals were less ambitious than they are. Hence, many small companies with up to three seats on the board are likely to choose the goal quota “0”, the BDI Managing Director said. “The companies expect that policy makers will respect this solution, which is specifically mentioned in the law.” Before, the Minister of Women’s Affairs Ms. Schwesig had threatened a general mandatory quota of 30% should the smaller companies de facto boycott the law. The federal government plans to only revisit the law in early 2018, though, when the transitional period is over, and take a look at the situation then. It’s possible that some company owners and managers hope that in the upcoming federal election in late 2017, the political situation might have changed.

 

Finally, the BDI could present a positive surprise: In contrast to the boards of directors, which generally only serve as supervisors, the percentage of women on Executive Boards actually saw a slight increase since 2013.

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