Women's quota: More gender equality in the world of work

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Women's quota: More gender equality in the world of work

The women's quota has been in force in Germany since the beginning of 2016. What benefits has this law brought us since then? Is a set quota for hiring female people still necessary? We shed light on why it makes sense for both our society and companies to stick to the women's quota - and how to implement the law profitably.

Women's quota - what was that again exactly?

Everyone has probably heard the term "women's quota" once or twice in media reports. But getting the "Act for the Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector" passed in 2015 exactly one after the other is not at all uncomplicated.

The law, known briefly as the women's quota, states that in Germany at least 30 percent of positions on the supervisory boards of listed companies subject to full co-determination must be held by women. These companies are to set their own target quota for the executive board and management. In this context, a company subject to full co-determination means that it has at least 1,000 employees. If it has more than 500 employees, the company is deemed to be subject to co-determination.

Companies subject to co-determination are not bound by the 30 percent quota. Unlike companies subject to full co-determination, they also formulate the target quota for the supervisory board themselves.

Since 2021: FuPoG II

Under the conditions described above, it was long possible for a company to simply determine a 0 percent target for the quota of women in management positions. Since a change in the law in August 2021, this is no longer legal: Now companies with a board of at least three members must fill at least one position with a woman.

However, the overriding target for both companies subject to co-determination and those subject to full co-determination is still the 30 percent threshold for the supervisory board, executive board and Management. As long as this has not been achieved, the law obliges companies to take further action.

women quota germany

Women's Quota and Gender Pay Gap: What's the Difference?

In connection with gender equality in the workplace, the gender pay gap is often mentioned. This refers to the fact that women's gross earnings are on average lower than men's gross earnings. In 2021, for example, women's earnings were 18 percent lower than those of men.

Although the two terms do not mean the same thing, the women's quota and the gender pay gap are directly related. Because when few Women in management positions they also earn less than men on average. However, the gender pay gap is not only explained by this fact. Even if the difference in earnings is adjusted for general conditions, men receive more money for their work than women (i.e. for work in the same position).

Criticism of the women's quota

Ever since the law on women's quotas was passed by the Bundestag, there has been criticism from many sides. Some female politicians, for example, have complained that a mandatory quota would do little to bring about change in society. Rather, they say, it is the conditions that continue to exclude women from leadership positions, such as the inability to reconcile family and career. So these politicians are calling for structural conditions to improve first, rather than assigning positions according to a quota.

The women's quota is not without criticism from the feminist camp either. After all, a fixed quota implies that women will not make it into management positions without legal help. To claim that in itself is also discrimination - and a quota is anything but equal treatment for both sexes; after all, there is no quota for men either.

Another point of criticism is that the women's quota may bypass the interests of women. After all, who knows whether the lack of women in management positions is not simply due to the fact that female people are less interested in achieving positions of power? If so, the excess of men in these positions would not be due to discrimination against female applicants, but simply to the fact that both sexes are different and realize their professional potential in different ways. And then a women's quota would be completely unnecessary.

5 Benefits for society and the company

1. Despite all the criticism: Since the introduction of the women's quota the number of female Supervisory Board members is increasing. This is also the case in companies that are not actually affected by the statutory regulations. So it seems that there are indeed female applicants for management positions - and that the women's quota has had a positive effect.

2. An Another advantage of the women's quota also lies in breaking through the so-called "Thomas effect". This effect describes the phenomenon that people in management positions usually hire applicants who are as similar and familiar to them as possible. That's understandable, since a similar person gives you the feeling that you know what you're getting into and what the other person can do. However, Thomas then usually hires a different Thomas - and female applicants don't even find their way into management. This cycle can hardly be broken without a legal quota.

3. Social advantages in a more equal distribution of roles are manifold. If the women's quota takes effect and ultimately leads to a change in the distribution of roles and a rethinking in society, this also means that men have more time for their families and children, for example. If women are no longer the ones in the couple who earn less money, fewer families will inevitably end up in the classic role model. This would, for example, ease the burden on pension funds and send fewer women into old-age poverty, produce fathers with greater parenting skills, and open up the benefits of additional, more masculine approaches to raising children.

4. Also Companies benefit demonstrably from a higher number of women in leadership positions. Some studies have shown that female leadership positions often have a better Relationship to their employees and thus ultimately also improve the quality of work in the company. Researchers attribute this circumstance to the fact that female Executives not think so much in hierarchies, can communicate better and empathize with their employees.

5. Another advantage for companies with female leadership is the better economic performance. Various studies have already shown that companies with mixed management teams, i.e. in which both genders are equally represented, come through problematic episodes better. This is attributed to the fact that female managers are less willing to take risks and are more competitive. When the genders are mixed in a leadership group, more masculine attributed characteristics such as assertiveness or profit orientation can mix with more feminine ones such as Communication skills and social thinking and deliver better results.

Norway: Example of the enforcement of a women's quota

In 2003, Norway became the first European country to introduce a women's quota - a mandatory 40 percent quota for senior management positions in listed companies. When the law was introduced, the proportion of female executives was around 20 percent. In 2019, this had already risen to over 41 percent.

Norway is therefore often cited as evidence that a women's quota is necessary to change structures. Researchers also note that strict sanctions are needed to enforce a women's quota, such as in Norway, France or Belgium. In the absence of sanctions (such as in Germany or the Netherlands), the proportion of female managers increases only moderately.

Conclusion: Why a women's quota is an important step towards equality for women

The most important argument in favor of a women's quota is probably that without a legal requirement, unfortunately little will change in the existing structures. The years before the introduction of the quota showed this: although the problem had been known and obvious for a long time, nothing changed in the male-populated executive floors. With a quota, on the other hand, the number of female executives increases - and not only in Germany, but also in other countries after the law was introduced. Thus, despite justified criticisms, the women's quota makes an important contribution to structural change and thus to a little more gender equality in professional life.

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