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In Europe, binding gender quotas are increasingly prevalent

9 January 2016

Germany’s statutory gender quota for supervisory boards took effect at the beginning of the year, yet the ratio of women to men is still alarmingly low. Many companies don’t even seem to realize that the new law applies to them. Major German companies will need to fill 30 per cent of non-executive board seats with women. Germany follows in the footsteps of other European countries such as Norway, Italy, France, and Spain in instituting such a policy.

Most people agree that there aren't enough women in corporate boardrooms, but there's little consensus on the best way to increase numbers and improve director diversity. Some countries use voluntary targets, while others employ tougher (often controversial) legislative measures such as binding quotas to tackle the problem.

Still, the 28 countries in the European Union are far from unanimous on how to get more women into boardrooms, and progress has been patchy. The EU attempt to speed up and unify change ran into opposition: The European Commission's proposal to raise the proportion of all types of female directors of publicly listed companies to 33 per cent by 2020 was watered down to 20 per cent after some member countries argued in favour of non-binding measures to boost female representation.

The U.K. has not gone down the quota route, but has instead favoured voluntary target setting and a corporate governance code. Although women hold fewer than 25 per cent of board jobs at FTSE 100 companies, that's up from 12.5 per cent in 2011, when a government commission review flagged the lack of female directors. The next step in the U.K. is to increase the number of executive directors, as most women on FTSE 100 boards hold non-executive positions.

Sources: Der Spiegel, Bloomberg Business