Social Matters in Germany

There are still far fewer women than men in management positions in German companies. Why? And how will it change? Marion Weckes, economist in the Department of Co-determination at the Hans Böckler Foundation, tells us more.

“Women are still the exception to the rule in corporate executive committees and supervisory boards, and their rise to leadership roles is often obstructed by male managers,” says one study. So how can women make it to the top?

It’s true, women are rarely found in the top echelons of management. Our studies show that they make up just one percent of executive committees and 10 percent of supervisory boards (as of March 2009). Selections for executive committee positions are often made by second-tier management, or when the committee members of another company woo the candidate into their own ranks. In either case (in certain industries in particular) virtually no women are taken into consideration because they aren’t in those positions in the first place. This means that it has to become easier in general for women to break through to the third and second management levels. Still, supervisory boards have to at least make an effort to find a female candidate and document those efforts in the company’s annual report. This would at least bring the subject to the table. The supervisory board itself is another thing altogether, however. There are plenty of women available for those positions, and a targeted search would certainly provide results. A figure of 40 percent women, as is the case in supervisory boards in publicly traded companies in Norway, for example, would be easy to achieve in Germany as well.

Are the prejudices against female managers just a German phenomenon or does it happen in other European countries as well?

I’m not sure we can necessarily call it prejudice as such. Often times it doesn’t even occur to men to look for a woman. It just doesn’t fit into the established process. There just seems to be a lack of initiators who bring the subject to the table. But Germany is no exception. Other countries have similarly low numbers of women in management positions, but some are clearly better. Norway has a legally stipulated quota, for example, and the Netherlands and Belgium are working on drafts for laws to regulate it as well.“”

Even in universities, women are far less frequently given higher positions compared with men. Female professionals are beginning to demand quotas, financial incentives and penalties as well as more transparency in the selection process. Do you think these types of demands would be workable in the business sector?

Without any doubt, yes. The question is whether it is politically desirable. We could set up legal quotas for occupancy in supervisory boards, like in Norway, or even threaten companies with their removal from the stock market if the quota is not fulfilled. It is doable. A law for executive committees is also conceivable, according to which the supervisory board would have to prove that it made an effort to find a female candidate.

“Between 2001 and 2006 there was no significant increase in female managers,” says your study. Were the measures taken insufficient or were they not implemented?

The measures taken up to now consisted of a voluntary obligation in the private sector. That didn’t work. 80 percent of the women in the supervisory board are employee representatives. If you consider the fact that among the companies in the study, only 65 percent of the supervisory boards even contain employee representatives (one-third or half), it shows there is a great need for employers to improve the balance. A first step would be to implement diversity as a fundamental component of the German Corporate Governance Codex. But that probably won’t suffice.

According to a McKinsey study, a higher percentage of women in management leads to better wages and higher stock prices at a company. A Swiss bank even developed a special fund for companies led by women. Could that be a model for the future?

Others will have to make that call. As a woman I would feel discriminated against if a special fund for companies led by men was created. I think some men are feeling that way, in fact. Perhaps banks should put the best-performing and most sustainable companies into a fund. If the theory turns out to be true, then the companies in the fund would be disproportionately managed by women anyway.

The critique of the low numbers of women in management is mostly directed at men, or at least at the social structures that create those numbers. What can women themselves do to increase their chances of getting into management positions?

Network, network and keep networking. At the same time, help each other out, just like men have been doing for decades. The old-boy network should be replaced by the new-woman network.