Germany’s new boardroom quota for women

A working group of Germany’s ruling coalition parties headed by Chancellor Angela Merkel agreed to impose a mandatory quota for the number of women working in senior management positions in the country’s listed firms.

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Key-Points

 A final decision on the key points of the legislation, called the Second Management Positions Act, will be made by the cabinet this week.

As per the agreed-upon provisions, in case executive boards of listed companies have more than three members, one of them must be a woman.

Further, companies in which the federal government has a stake will require a supervisory board quota of at least 30 per cent and minimum participation in executive boards.

Since 2015, Germany, which is Europe’s biggest economy, has had a voluntary quota of 30 per cent for women on supervisory boards.

However, various studies have indicated this did little to improve the proportion of senior executive positions held by women. The new provisions will build upon this already existing voluntary quota.