Women on Corporate Boards in Germany and the Law on the Equal Participation of Women and Men in Leadership Positions - Improving Career Opportunities for a Few or Removing Vertical Segregation?

Until the mid-1990s, vertical segregation of the labour market and the underrepresentation of women in decision-making positions were not on the German political agenda. While gender equality laws for the public service were introduced at federal level in 1993 and at federal level in 1994 and 2001, legislation for the private sector and particularly quotas for women on boards was for a long time a contested issue characterized by a lack of legal instruments. The 1998 coalition between the Socialdemocratic Party (SPD) and the Green Party originally planned a quota law for private economy: a plan which was later turned into a “Voluntary Agreement” without positive effects: The share of women on boards and top positions stagnated. In 2008, women’s organizations across all parties and societal groups formed a broad alliance and signed the “Nuremberg Resolution” pledging for a 40%-quota law for corporate boards similar to the Norwegian example. The public debate around the issue revived and a few companies adopted internal quotas. In 2013, the grand coalition of CDU and SPD agreed upon introducing a quota for women on boards. The law on the equal participation of women and men in leadership positions in the private economy and the public service was adopted in December 2014 and came into force in May 2015. Current studies show that DAX-30 companies management boards are almost 30% female - but the share of women in executive boards is still less than 10%. Furthermore, the difference between the share of women among all employees and in senior management positions varies considerably across different sectors and vertical segregation remains a major problem. Against this background the paper discusses the effects of recent legislation and asks whether it needs further policy strategies to tackle the overall problem of vertical segregation.