Do we need a quota for women in Germany?
Women on management boards are still rare in Germany.
Is a statutory quota for women therefore useful? We take a look at the pros and cons.
The debate about the quota for women has been rekindled in Germany. A current draft law stipulates that at least one woman will have to sit on the boards of listed companies with more than three members in the future. But does this new regulation actually lead to more diversity in German companies? We have collected reasons for this and against.
Pro: Why a quota for women can make sense
Women are still barely represented on boards and management positions of German companies. In 2019, for example, only about 30 percent were occupied by women. Other European countries are more diverse. Latvia climbed to the top of Europe with a female share of 46 percent. Meanwhile, Germany is even falling below the European average of 34 percent.
What is the reason for this? Shouldn’t companies have an interest in bringing women to the executive boards as well. Recent studies show that various teams are more productive. A problem can best be solved if it is viewed from different perspectives. This also has a financial impact. A McKinsey study found that ebit (earnings before interest and taxes) is up 3.5 percentage points as many as 10 percent more women on the management team.
However, as drastic changes are still to come, legislation seems inevitable.
The Supervisory Board quota introduced in 2016, for example, gives reason for hope. It brought about positive changes in German supervisory boards. Just one year after its introduction, the proportion of women exceeded the 30 percent threshold. In November 2020, it was 35.2 percent. In comparison, the proportion of women on boards was much less positive.
Contra: Why we are against a quota for women?
It is undisputed that Germany needs more diversity in management positions. But critics say women’s quotas fear that a law could lead to stigma. After all, women in management positions do not want to be regarded as “quota women”, but want recognition for their achievements.
There is also the question of whether a statutory quota for women can actually lead to the desired goal. A recent analysis by McKinsey shows that the new law could currently only help nearly 90 women into a board position. Of 311 listed or joint companies, only 203 companies have more than three board positions to fill. As a result, the female quota reaches only a small number of enterprises.
Structural problems in our society are also putting obstacles in the way of women. Most companies still lack work-life balance. Flexible working hours and better care services could help women climb the career ladder. Here, too, change is progressing slowly.
Conclusion: Alternative solutions needed
It is difficult to predict whether a quota for women is the right way to increase the number of women on board. The fact is, however, that legislation alone will not be enough to improve career opportunities for women. What is also needed is a rethink on the part of the companies. A family-friendly working environment, better care facilities and flexible working hours, on the other hand, could provide a new boost and benefit businesses in the long term.