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Gender Diversity Benefits Supervisory Board Work of Many Companies

DIW Weekly Report 3/4 / 2021, S. 32-38

Anja Kirsch, Katharina Wrohlich

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Over the past years, the proportion of women on the supervisory boards of major companies in Germany has increased. As this second report in the DIW Women Executives Barometer 2021 shows, this has a meaningful, positive impact on the supervisory boards of many companies, and affects interactions between members, discussions, and decision-making. These findings are based on qualitative interviews with 60 supervisory board members who serve on the boards of a total of 75 listed companies in Germany. These directors emphasize changes in the general atmosphere, and discussions are described as more comprehensive and multi-faceted. Women also appear to be more likely to question the executive board’s proposals and decisions and to request additional information more often. Thus, gender diversity on supervisory boards can contribute to a board’s ability to more effectively monitor executive boards. The interviews do not confirm the idea that women on supervisory boards act in an especially risk averse, altruistic, or ethical manner. Considering the frequency of top executives committing fraud—such as in the current Wirecard scandal—improvement to supervisory boards’ discussions and decision-making is very important. In the same vein, it can be hoped that the minimum requirement for the participation of women on executive boards, a bill which was recently passed by the German Cabinet, will similarly have effects beyond providing momentum for greater gender equality.

Katharina Wrohlich

Head in the Gender Economics Department

JEL-Classification: D22;J16;J59;J78;L21;L32;M14;M51
Keywords: corporate boards, board composition, boards of directors, boarddiversity, Europe, women directors, gender equality, gender quota, Germany,management, private companies, public companies, supervisory boards, executiveboards, CEOs, women, finance industry, financial sector, private and public banks,insurance companies.

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