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Germany introduces board quotas

02 December 2014

Germany introduces board quotas - Read more

Germany has introduced quotas for board positions to promote gender diversity and bring up number of women in the country’s largest companies.

In order to comply with the gender requirement, 30% of board positions will need to be filled by women, or else, the positions will have to be left empty.

The new requirement will affect 100 of the country’s largest companies, while another 3500 will have to publish gender equality targets.

The German cabinet is set to approve the quota bill on 11 December 2014. This is a long standing and much debated issue, which has seen the European Commission (EC) also become involved. In November 2012, the EC first proposed introducing a quota of 40% female representation as supervisory board members for large listed companies.

Rachel Suff - Public Policy Adviser (Europe), CIPD told G+C that: ‘the evidence shows that quota systems for diversity can result in an increase in the number of women on boards. They can therefore speed up the process of encouraging greater female representation at a senior level.

‘However, a more sustainable approach is needed to foster longer-term change throughout the organisation. This means putting in place measures to encourage the development and career progression of women at all levels of the organisation to ensure an ongoing supply of female talent ready to fill top positions. This includes fair recruitment practices, good performance management systems and inclusive succession planning.’

Speaking to G+C, Shellye Archambeau, CEO of MetricStream commented: ‘While it is a positive sign that more and more entities are realising that the dearth of women on corporate boards is a significant problem, I don’t agree that establishing government quotas is the best way to resolve the issue. I believe in setting hiring goals and then tracking and reporting on those goals. When companies are off track on their goals, shareholders and stakeholders can apply pressure, help and focus.’

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