Boardroom quota hardly changes balance of power
March 6, 2015
OK, it's great that starting in 2016 there will be more women on the supervisory boards of the some 100 major German companies listed on the stock exchange. By law at least 30 percent of board seats will have to be held by women.
Is it a major step towards a more gender balanced distribution of executive positions in the business world? Hardly.
Supervisory boards are not the real decision-makers in a company. They just have general oversight. Certainly, they also decide who is on the board of management. But these sort of personnel decisions require a majority – in most cases a two-thirds majority. And that requires some organization. Even if all the women on the supervisory board were in agreement (which is not something that can be taken for granted), there would still not be enough to push through a decision against a male majority. So the argument that women on supervisory boards will be able to promote their own into decision-making positions does not hold water in my opinion.
And another thing – if qualified women cannot be found to fill the necessary seats on the supervisory board, then those seats must be kept empty until the 30% quota has been reached. What on earth were the legislators thinking – an empty stool won't be a problem?
The introduction of a gender quota on supervisory boards ignores the real problem in my opinion. Women have to be represented on managing boards. That is where strategies are developed and the important decisions on investment and personnel are made. But a quota will not help more women hold managing board seats. First there must be a cultural change in the business world and in society. Salary structures must be made more transparent and the rules for promotion must be clearly communicated. And employers will have to implement more flexible working hours. In my eyes, a company's support for child-care is far more important then a quota.
The recently passed legislation is a half-baked idea that does not really fulfill its purpose.