According to recently published studies, the proportion of women on supervisory boards of the 160 companies listed in the German stock exchange (DAX, MDAX, SDAX and TecDAX) currently amounts to only 17.4%. Even lower is the number of women on the management boards of these companies: in September 2013, only 6.1% of the members of the management boards were female. This means Germany has one of the lowest levels of female corporate representation in the developed world. As a result, the subject of gender diversity in supervisory and management boards has been a topic of public interest in Germany for the last few years.
Under German law, there is currently no legally binding quota for women on supervisory and management boards. However, the coalition in its labour law agenda 2014-2017, published on 27 November 2013, agreed to introduce a legal quota for women on supervisory boards.
Supervisory boards of listed companies and companies which are subject to full co-determination and which will be newly appointed as of 2016, would have to prove a quota of female members of at least 30%; otherwise, the seats covered by this quota would remain vacant. The wording of the coalition agreement suggests that the female quota will apply only to equally co-determined companies and to listed stock corporations; the exact scope will have to be determined by legislation.
As the European Union is aiming to pass a directive to introduce gender quotas for women on supervisory boards, it is very likely that German law will provide for gender quotas in the future – not least in order to comply with European law.
With no legally binding quota for women on boards in Germany, companies are also not legally required to report on gender diversity on boards under German law. However, the German Corporate Governance Code, which applies to listed companies, contains some recommendations on gender diversity. The Code provides that the supervisory board must specify concrete objectives regarding its composition which shall, in particular, stipulate an appropriate degree of female representation. Furthermore, under the Code, the supervisory board must aim for an appropriate consideration of women when appointing the management board. As the German Corporate Governance Code is not binding law, compliance with its recommendations is not mandatory. However, if a German listed company does not comply with the recommendations of the Code, the non-compliance and the reasons for non-compliance must be disclosed annually by the management and supervisory board of the company. In addition to this, the coalition plans that, as of 2015, listed companies or co-determined companies will have to publish binding targets and explain how the percentage of women on supervisory boards, the executive board and the upper management should be increased.
As the presence of women in the leadership of a company is regarded as a question of good governance and reputation, many companies in Germany are willing to increase the ratio of women on management and supervisory boards – although not legally required to do so – by creating programmes to support women. Under the German General Equal Treatment Act, programmes like these are permissible (and thus not be considered unlawful discrimination against men), if suitable and appropriate measures are being taken to prevent or compensate for existing disadvantages resulting from, amongst other things, gender. Therefore, "affirmative action" can be taken to provide for increased recruitment or promotion of women. However, it must be noted that there is no legal obligation to do so and that taking affirmative action for promoting women may, on the other hand, lead to discrimination claims from male applicants.