Germany misses point on corporate gender quotas

The German chancellor, Angela Merkel, left, has shot down the proposal of Ursula von der Leyen, the labour minister, right, to introduce a mandatory minimum gender quota of 30 per cent for the managemShow more

The amount of tut-tutting that followed comments by the head of Deutsche Bank about women in key business roles has drowned out the silence of inaction on the issue

Josef Ackermann, the head of Deutsche Bank, has said that having more women in senior positions would make life "more colourful and also prettier".

Mr Ackermann, whose remark last week drew accusations of male chauvinism, has not been practising what he preaches because Germany's largest bank has an all-male executive board.

It is not an exception. Only 3.2 per cent of management board members at the 200 biggest companies in Germany are women. That puts Germany on a par with India and below Brazil, China and Russia, as the minister for labour and mother of seven Ursula von der Leyen has pointed out.

When it comes to gender equality there is a gaping chasm between business and politics in Germany.

The country has a woman leader, Angela Merkel, and five female ministers in a cabinet of 16.

Germany's most populous state, North Rhine-Westphalia, has a female governor in Hannelore Kraft, and 32.8 per cent of politicians in the Bundestag, the lower house of parliament, are women.

The reason for the lack of women in top business jobs is that Germany, despite all of the liberal values enshrined in its constitution, still has conservative attitudes towards family and gender roles.

So it is disappointing that Mrs Merkel has shot down Mrs von der Leyen's proposal to introduce a mandatory minimum gender quota of 30 per cent for the management and supervisory boards of all listed companies.

Mrs Merkel had little option but to quash the proposal because the pro-business Free Democratic Party, the junior partner in her centre-right government, categorically ruled out supporting what would be a radical government intervention in the free market.

She said she would prefer to give companies more time to honour their pledge, made a decade ago, to voluntarily improve career opportunities for women.

The problem is nothing has happened in the past decade. Boardrooms remain male bastions. Companies won't smash their glass ceilings unless the government forces them to, with strict and binding quotas.

Other European countries are leading the way. Norway, France and Spain already have gender quotas and the Netherlands is preparing one.

Not so long ago, such quotas were dismissed as feminist rhetoric. There remains a persistent mantra of arguments against them.

Critics say gender quotas damage the cause of women. They say the quotas can appear to: show women aren't being promoted on merit; discriminate against men; and cause problems for companies that don't have enough qualified female employees.

The critics add that quotas take the pressure off the government to implement the expensive and complex policies that would really help women, such as full-day schooling, reforming the labour market and providing more nurseries.

Some even point to studies that say the overwhelming majority of women don't want to climb the corporate ladder.

But it is untenable for an economy not to tap into the talent and skill of such a vast, highly educated part of its workforce. Some 51 per cent of university graduates are women.

Their lack of corporate influence in one of the world's largest economies is not only ridiculously outdated, it is also bad for business.

Surveys show management teams dominated by old boys' networks tend to be less creative, and hence less profitable, than mixed boardrooms because they are less diverse and have a narrower outlook.

Besides, Germany and many other developed economies with declining birth rates are destined to have worsening shortages of skilled labour in the coming decades. Enabling women to take a bigger role will become crucial to filling those gaps.

Quotas will speed up the pace of that necessary change. As captains of industry, women would exert more pressure on the government to reform education and the labour market. Such quotas need not be permanent.

There is some movement. The European Commission has threatened to introduce a gender quota if businesses don't come up with their own proposals by the end of this year.

The power company E.ON and the car makers BMW and Daimler are among a growing number of companies that have announced plans to introduce their own, albeit modest, quotas for women in the coming years.

But such voluntary measures haven't worked in the past. Without legislation, the necessary transition won't happen in the future either.