Germany Hails ‘Milestone’ Accord on Board Seats for Women

German lawmakers said women will have more say in running the country’s biggest companies after negotiators within Chancellor Angela Merkel’s coalition struck a deal on quotas on management boards.

“Today we have reached a milestone for the equal participation of women and men in management positions,” said Nadine Schoen, a member of Merkel’s Christian Union-led bloc, in an emailed statement. “Having women at the decisive control points in large companies will ensure that women will also move up on other management floors in the future.”

A coalition committee agreed late Friday that management boards of listed companies and firms with more than 2,000 employees, where labor unions have supervisory board seats, will be subject to gender quotas. Companies with more than three management board seats will have to allocate one to a woman. Companies with no female board members will face sanctions unless they provide a reason, Schoen said.

“More women on boards means fewer glass ceilings and better income and career opportunities for all women,” said Katja Mast, a deputy caucus chief for the Social Democrats, Merkel’s coalition partner, by email. “This step is historic.”

Coalition heads still need to sign off on the agreement next week. A cabinet decision will be made once ministries have drafted a bill and the federal states and social partners have been heard. Merkel’s bloc and the SPD had agreed on improvements to the law on women in executive positions in their coalition agreement after the 2017 federal election.

Former Siemens AG board member Janina Kugel said the agreement is a historical breakthrough and yet doesn’t go far enough. The lawmakers’ failure to set a percentage quota means that even on a ten-member board, one female member would be enough to comply with the regulation.

“There is room for improvement,” Kugel said in an interview in the Frankfurter Allgemeine Sonntagszeitung. “Our fight isn’t over yet,” she said.

“A women’s quota for board members in larger companies is an important step on the way to equality and equal opportunities in Germany,” Marcel Fratzscher, head of the Berlin-based DIW economic institute, told Handelsblatt. “Companies will also benefit from it in the end, because many studies show that diverse board members can be more successful, especially in advancing the important transformation of the German economy.”

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