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Women executive barometer 2016: Percentage of women among major companies’ top-level positions hardly increases

Press Release of January 20, 2016

Researchers analyzed more than 500 companies – some are setting a good example, while others are lagging behind – vast majority of companies have yet to meet the 30-percent quota for women on supervisory boards

A balanced representation of women and men in Germany’s corporate leadership roles is still a long way off: At the end of 2015, the proportion of women on the executive boards of the 200 largest companies stood at just over six percent—an increase of less than one percentage point over the previous year. And even though nearly 20 percent of the positions on the supervisory board were held by women, the growth dynamic has weakened compared to the previous year. These are the results of the German Institute for Economic Research (DIW Berlin)’s latest “Women Executive Barometer,” published in DIW’s current Economic Bulletin. “The development is moving at a snail’s pace,” explains Elke Holst, Research Director for Gender Studies at DIW Berlin. “If the growth rate of the share of women continues to be as low as it is, it will be a long time before an equal participation of women and men has been achieved.” According to DIW’s calculations, if the growth rate of the past ten years were to continue, it would take the top 200 companies another 25 years before an equal number of men and women were serving on their supervisory boards, and another 86 years before an equal number of men and women were serving on their executive boards. “The executive boards in particular are where the share of women remains at such an extremely low level,” says Anja Kirsch, research fellow at the Chair of Labor Politics at Freie Universität Berlin.

German Institute for Economic Research (DIW Berlin)

The German Institute for Economic Research (DIW Berlin) is one of the leading economic research institutions in Germany. Its core mandates are applied economic research and economic policy advice as well as provision of research infrastructure. As an independent non-profit institution, DIW Berlin is committed to serving the common good. The institute was founded in 1925 as Institut für Konjunkturforschung (Institute for economic cycle research). Since 1982, the Research Infrastructure SOEP (German Socio-Economic Panel Study), a long-term study, is affiliated to DIW Berlin. The institute has been headquartered in Berlin since its founding. As a member of the Leibniz Society, DIW Berlin is predominantly publicly funded.

DAX 30 and  companies with government-owned shares have the highest proportion of women on supervisory boards

But not all companies can be tarred with the same brush with regard to this issue, according to the authors—because some are far more ambitious than others. In all of the groups of companies examined for this study (which included—in addition to the largest 200 companies outside the financial sector—the DAX 30, MDAX, SDAX, and TecDAX companies, as well as those with government-owned shares), a not insignificant proportion already has 30 percent or more women on their supervisory boards. Best in this regard are the DAX 30 companies as well as in the companies with government-owned shares: Nearly half of the companies of both groups have already reached the threshold. However, of the roughly 100 companies that, as of this year, need to adhere to the 30-percent women’s quota for new directors on their supervisory boards, only around 28 percent already fulfill the requirements; others still have a long way to go.

In the financial sector, for which DIW Berlin examined the 100 largest banks and 59 largest insurance companies, the increase in women’s representation over the past year was low. On the executive boards, the proportion rose by less than one percentage point to just under 8 percent among the banks, and roughly 9 percent among the insurance companies. Although the dynamic was slightly stronger on the supervisory boards, women were also significantly underrepresented, with roughly 21 and 19 percent for the banks and insurance companies, respectively—despite the fact that they make up the majority of employees in the financial sector. The proportion of women was particularly low on the supervisory boards of the cooperative banks, even though these institutions are based on a participatory business model. “Women’s limited promotion prospects also have an effect on the pay gap between women and men,” explains Kirsch. “Compared to all other industries, the so-called gender pay gap is largest in the financial sector.”

Tax and family policies are important starting points for getting more women onto boards

According to Holst and Kirsch, there is a strong need for further action. The quota system alone cannot fix the problem. Even though the law obliges roughly 3,500 companies to set targets for themselves regarding the percentage of women on supervisory and executive boards, as well as in managerial positions, “without any real penalties for non-compliance, the law could turn out to be a toothless tiger,” says Holst. The state should therefore try to improve the career prospects of women through supporting measures—for example, tax and family policy. One starting point could be the Ehegattensplitting (legal tax splitting between married couples): According to the authors, this tax law provision gives women little incentive for labor force participation, and thus cements the traditional division of responsibilities between men and women.