Wanted: More women in German boardrooms

By Helen Livingstone Oct 16, 2011, 5:01 GMT

Berlin - 'But what am I supposed to do with all the men?' asked Dieter Zetsche, the head of Daimler, one of Germany's biggest carmakers, in response to government proposals to introduce a 30-per-cent quota for women in management positions.

His words echo the widespread lack of enthusiasm among German companies towards the idea, proposed by Labour Minister Ursula von der Leyen at the beginning of the year and due to be discussed by business leaders and cabinet ministers on Monday.

Germany would not be the first to introduce such a system. In 2003, Norway passed a law which obliged publicly listed firms to give 40 per cent of boardroom seats to women by 2008. Spain followed suit with a similar law in 2007 and France did earlier this year.

Many say that, with a female contingent of just 2.2 per cent on the executive boards of Germany's top 30 DAX-listed companies in 2010, women sorely need a helping hand. A voluntary arrangement set up ten years ago - agreed to by companies anxious to avoid a law - failed to achieve any progress.

'Non-binding, self-imposed quotas have lost credibility in view of the numbers,' argued Elke Holst and Julia Schmieta in a paper for the German Institute of Economic Research (DIW) earlier this year.

But a quota for women would be discriminatory, says Juergen Schupp, also of the DIW.

'Especially when you have, for example, a situation in which a woman is less qualified than a man,' he says. 'If the company can be punished by law for choosing the man, that's a problem.'

Since clever companies are taking notice of research that shows mixed management teams are more successful, the situation is changing anyway, Schupp argues.

Both sexes reacted with hostility to the quota when it was first introduced in Norway, says Marit Hoel, director of the Centre for Corporate Diversity, commissioned by the Norwegian government to monitor the quota's progress.

'The main argument was that it would lower the level of competency and skills,' she says.

A 2010 study by the University of Michigan showed that the average company stock price dropped by 2.6 per cent in the three days following the announcement of Norway's quota law, with the study's authors blaming fears over the newcomers' competency.

But, says Hoel, while many women appointed to boards were younger and therefore less experienced, 'the statistics bureau of Norway showed they typically had a much higher level of academic qualification than those they replaced and more international experience, so they raised overall skills.'

'The question of (female) competency is no longer an issue in Norway,' she concludes. As to a company's value, 'that just reflects immediate trust isues of the market. It felt insecure when boards were changing, but three year's later, it's relaxing.'

And Norway was the first country to recover from the global financial crisis, she adds.

Women have long made up a higher proportion of university graduates than men, but are still failing to make it to the top.

While a quota would be a positive step, says 35-year-old mother-of-one Sarah Hildenbrand, a bereavement counsellor from Berlin, what is really needed is a change in society.

As long as women continue to shoulder the burden of childcare, they will always be at a disadvantage in the workplace, she says.

In a country which even has a term for mothers deemed uncaring - 'Rabenmutter' (literally 'raven mother') - only 23 per cent of children aged 3 or younger go to nursery school.

A government plan to guarantee a nursery place from 2013 for every child aged one and above is a start, says Hildenbrand, but what she would like is for working hours and conditions to become more family friendly.

'Dropping your child off at 8 in the morning and picking it up at 6 in the evening is not family life,' she says.

If childcare facilities were more integrated with the workplace, she says, that would be a great attraction for women - as well as for modern men who want to see more of their children.

Employers in Germany - where businesses are constantly complaining of a lack of skilled workers - ought to consider that, she says.

The fight for the brightest minds, says Deutsche Telekom spokesman Christian Schwolow, is exactly what the telecommunications giant was preparing for last year, when it introduced a self-imposed target of 30-per-cent women in management positions by the end of 2015.

It has since invested 8 million euros in childcare facilities at its offices, is encouraging more flexible working hours and has instituted a policy of not contacting employees at weekends or after working hours.

'A quota for women is good for our reputation and increases our attractiveness in the talent market,' says Scholow. 'Diversity is the future.'