Bundestag resolution: law brings more women to board members

Decision of the Bundestag
Law brings more women to boards

So that more women occupy top positions in the economy, the Bundestag passes the “second management positions law”. It regulates a minimum number of female executives on board members. The law has met with approval, but it has also been heavily criticized.

In future, large companies in Germany will have to give more consideration to women when filling positions at the highest management level. The Bundestag passed the “second executive positions law”. The plan of the grand coalition stipulates that in future at least one woman must sit on the board of companies with more than 2000 employees and more than three board members.

This must be taken into account when filling new posts. “An appointment of a board member in violation of this participation requirement is void,” says the law. “This is a very important signal to women: Everything is open to you,” said Federal Family Minister Christine Lambrecht in the debate. AfD and FDP voted against the law, the left and the Greens abstained.

The AfD spoke of a “feminist planned economy”. Women’s quotas produced quota women, said MP Mariana Harder-Kühnel. For the left and the Greens, however, the plans do not go far enough. They only affect a few dozen board members nationwide, said Left MP Doris Achelwilm. The Green politician Ulle Schauws criticized the fact that there is no quota for women, but only the minimum requirement that the board must be occupied by a woman, no matter how big the board is.

In the event of a violation, there is a risk of fines

The law also changes the rules for other listed or co-determined companies that do not fall below the minimum requirement: In future, they will have to justify if they plan for their board of directors without women – that is, if they state a “target value zero” in their reports . If this does not happen, there is a risk of fines. The reporting requirements for companies will be tightened accordingly.

The economy had criticized the entire project as an interference with the corporate structure. Employers point out that a development that is socially and also desired by companies cannot be enforced by law if appropriate candidates are not available or are not willing to take on a corresponding position. According to the organization Fidar (women on supervisory boards), which has been campaigning for the topic for years and constantly monitors the development of the filling of supervisory board and executive board positions, 66 listed companies with equal co-determination fall under the new requirement for a minimum proportion of women in the Board. 24 of them have not yet had a woman on the top management floor.

Something is happening on boards

But there is already a reaction: Since the legislative plans became known, seven large companies have appointed female board members, according to Fidar. Adidas, Bayer, Eon, Fielmann, Infineon, Knorr-Bremse and Südzucker are named. The new rules for board members complement the existing requirements for supervisory boards. With the “First Management Positions Act” of 2015, companies of a certain size – usually from 2000 employees – were obliged to fill vacant positions on the supervisory body with women until at least 30 percent was reached. Where this quota applies, the proportion of women is now more than 35 percent.

In order to strengthen the participation of women in management positions as a whole, role models are needed – also on the executive board, according to the explanatory memorandum. “It takes women at the control points of the company in order to achieve a broad impact and to show young women development opportunities.” More women in boardrooms would mean more women at all management levels in companies. After the Bundestag decision, the law now has to be passed by the Bundesrat. According to information from the SPD parliamentary group, approval is not required there.