Women on Supervisory Boards

Jeju Korea, May 2014

Henrike von Platen

President BPW Germany member of FidAR e.V.

Source: EuropeanPWN Board Women Monitor

European Overview

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10

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30

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2004200620082010(%)

• Norway leads with 37,9%

11,7%11,7%

Front Runners Above Average Club

Below Average Club

Laggards

Status Quo Germany

In 2013 only 17,2% of the supervisory boards of the major listed companies in Germany are women (281 positions out of 1631) – from the shareholder side there are only 7,97%

The situation in family-owned companies is not much better and in state-owned companies it is not better either

This is where Germany stands 12 years after the agreement between the government and the leading business associations to promote equal opportunities for women and men in business on a voluntary basis

The situation has barely changed over the last 20 years

The strenght of cooperation

Initiated by commited women from business, science and politics

BPW and FidAR – a relationship in 5 Conferences since 2009

BERLINER ERKLÄRUNG 2011 (6 NGOs 6 Parlamentariens)www.berlinererklaerung.de

Focus of activities:

Lobbying key players in politics, business and the media

Women-on-Board (WoB) Index (since 2011)

Public WoB-Index (since 2013)

10 female presidents questioned the 5 top candidates for german elections, one of each party in one day

The action was accompanied the whole day by tv stations•Ursula von der Leyen represents Merkel (CDU)•Peer Steinbrück (SPD)•Katrin Göring Eckardt (Grüne)•Wagenknecht (Linke)•Kolb (FDP)

www.spitzenfrauen-fragen.de

WoB-Index 01/2014

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WoB Index: Key Findings 2011

WoB Index: Study of 160 companies listed in the major German stock indices (DAX, MDAX,SDAX and TecDAX)

Only 11,6% of supervisory and executive board members are women (320 out of 2283 positions are held by women)

17,2% of the members of the supervisory boards are women (281 out of 1631 positions)

BUT: approx. 9,26% of female supervisory board members are employee representatives and due to the German particularity of co-determination

On the shareholder side only approx. 7,97 % of supervisory board members are women

36 of the 160 companies (22,5 %) don’t have a single women neither in their supervisory nor in their executive board

A balanced representation of women on boards is a question of equality and fairness

A larger representation of women on boards also has clear economic advantages:

Supervisory boards select executive board members and can effectuate long-term cultural changes

Critical mass: In order to have an impact in a board you need at least three women

Why the status quo has to be changed

Why Quotas?

• Fundamental Assumption: The female candidate has the same qualifications and is equally suited for the position

• Instrument to overcome the similarity principle

• Instrument to make selection processes more rational

• Instrument to increase visibility of suitable women

• Instrument to speed up

• Critical mass: it takes 30% to effectively change a culture – „Token Women“ are not effective

• Voluntary measures have failed

• In Germany, quotas in politicial parties have been very successful

Obstacles for female careers

Male Managers: the predominant group of leading managers are male, heterosexual, white, able-bodied, belong to an educated social class, grew up with christian values, are married and have children and they are „in the best years“

Socalled „old boys networks“ are defined as groups that only form according to the principle of similarity

Women or homosexual men are excluded

Obstacles for female careers

• Excellent individual performance is a precondition but is not necessarily the decisive factor for a career

• Enterprises are organisations that work according to the rules of male work life

• Men are trained on hierarchies and orders right from the beginning

• Women get to know the internal ground rules of companies much later and harder and the unwritten rules are even worse to get to know

Common Myths

Difficulty to combine family responsibilities

with a career

Women make the wrong career choices

Women don‘t want to have a career

Women quite often receive special support but are at the

same time not necessarily promoted for a better position

De-Mystification

Is the family really the problem?

– Women in leadership positions disagree

– A third of university trained women in Germany are childless

– „Board Age“ people rarely have small children

Do women make wrong career choices?

– 50% of students of business and law and 20% of engineering students are women

– Studies show: Women have the necessary leadership abilities

– More than 50% of Supervisory and Executive Board members have law or business degrees

Of course, women want to make a career, but they want to be appreciated!

Challenges for women in leadership

• Act as a role model for young women also in public

• Deliver more support for women in general

• Promote talents and especially (promote) women to the right

positions

Challenges for young women

Have a clear vision of your career

Seek financial independence

Improve self-positioning

Expand leadership competences

Demand leadership positions

Use networks activly and check the selected company carefully, language, organisation – structure

The Quota Debate in Germany: Positions

Except for the Free Democrats, ALL parties are in favor of some legislative action

SPD, Greens and Left Party: Statutory quota (≥40%) for supervisory boards and executive boards

CDU/CSU: Statutory „flexible“ quota for supervisory boards with a target of 30% to be reached by 2020. Fixed quota from 2020 for supervisory boards

Women business associations: statutory fixed quota between 30 and 40 % with reasonable transition periods

Business associations: Voluntary measures and corp. gov. Code will do the job – no law!

Quotas in Europe

Statutory quotas (examples):

Norway: 2008 - quota of min. 40% women on all corporate boards has been achieved within four years of enactment (strict sanctions)

France: 2011 - 20% quota within 3 years (40% within 6 years) for the 650 listed companies - corporate sanctions

Netherlands: 2011 - 30 % on board and senior management

Spain: 2007 - quota of 40% within 8 years – no sanctions or enforcement mechanism

Italy: 2011 - quota - 20 % by 2012 and 33% by 2015

Austria: 2011 - quota of 25% by 2013 and 30% by 2018,but only for state owned companies

Resolution of the coalition negotiations in 2013:Women in Leadership Position

Starting in 2016 a genderquota of 30% for all newly incoming board positions

Sactions! > If they don´t fullfil the quota, the seat stays empty

Starting in 2015 the companies have to publizise targets for quotas in their board and executive and have to explain if they don´t fullfil their own goals

Guidelines 25.03.2014for the legislative procedure

From 2016: gender quota of 30% for replacement of board members in 108 listed companies

Penalties: failure to realize such quota means the place remains unfilled

As of 2015, legally binding targets for 3500 listed and co-determined companies to increase the proportion of women in the board, the Executive Board and in the top management levels which have to be published and non-attainment must be justified.

Sanctions, if necessary, non-discharge of the Supervisory Board and the Management

EU Commission

The EU Commission Directive of November 2013 :

Gender quota of 40% for private listed companies by 2020, gender quota of 40% for public listed companies by 2018

Small and medium-sized enterprises (<250 employees and annual turnover of up to € 50 million) and non-listed companies are excluded from the scheme

"I do not like quotas. But I like very much what they do. We need to encourage women to achieve that, what they are capable, "said EU Commissioner Viviane Reding.

Women on Board

The Right Choice

www.bpw-germany.dewww.fidar.de