Statutory regulation of the male/female ratio
The law passed in March for the equal participation of women and men in management positions has polarised minds and discussions, and often provokes emotional debate. Having said this, the issue at the heart of the statutory regulations on the male/female ratio is that of equal opportunity, not of ‘token women’.
Scientific studies and numerous practical examples show that gender diversity is an important factor of business success in filling management positions in the enterprise. Women in management positions also offer many other benefits to the enterprise, in particular in terms of reputation with clients, and reputation as an employer in the competition for the best talent. There are thus sufficient incentives for companies to strive for reasonable consideration of women in top management.
The fact is that defining a mandatory minimum quota of 30 per cent on the supervisory board, executive board and the two management levels below the board will see many companies facing major challenges. Where needed, BDO supports your company with commitment and expertise in all phases – from determining whether or not you are affected through to discussing which policy options ensure responsible implementation of legal requirements. We engage in an intense exchange with our clients and are happy to contribute our experiences.
Overview of the gender quotas act
With the introduction of a mandatory percentage of women, politicians have increased the pressure on the supervisory boards and the boards of directors of many companies to effectively deal with this topic. This is reflected in the commitment to comply with a mandatory quota within a self-determined period. The government views the transparency requirement as leverage for responsible implementation.
This transparency is ensured by reporting requirements.
If the respective percentage of women is lower than 30 per cent, it is compulsory to report the figures. This reporting shows the need for action, reveals the planned staff development and makes changes measurable. For example, targets for the supervisory board, executive board and management levels had to be defined no later than 30 September 2015. Reporting on the original basis, planned increases and those achieved later must be included in the progress report, the statement on corporate governance or in a separate statement.
This provision must be taken into account by listed companies or companies subject to co-determination (>500 employees). In other words, more companies than one might think are affected.
Listed companies, which are thus fully subject to co-determination at the same time, are also required to implement the required quota of at least 30 per cent women on the supervisory board at every opportunity. This applies to elections and secondments of supervisory boards from 2016 and/or electoral processes that are completed after 2015.
The fact is that the Gesetz über die Sicherung von Tariftreue und Sozialstandards sowie fairen Wettbewerb bei der Vergabe öffentlicher Aufträge (TVgG NRW) (Law on securing tariff-compliance and social standards and fair competition in the award of public contracts) became effective on 1 May 2012. Awarding of public contracts to companies will be made conditional on these companies demonstrating measures for the advancement of women. This condition also applies for their suppliers. Berlin has long had a Frauenförderverordnung (FVV) (Ordinance for the advancement of women), which provides for similar arrangements for awarding of public contracts.
It remains to be seen whether, and possibly how, the reporting of targets will affect public procurement in future. Again one can observe a lively discussion that varies between opinions such as ‘inadmissible criteria alien to procurement’ and ‘a permissible control instrument for social objectives’.
The implementation of the CSR policy, which came into force on 6 December 2014 also remains to be seen. This concerns Directive 2014/95/CE of the European Parliament and Council dated 22 October 2014 and the amendment of Directive 2013/34/EC with regard to the disclosure of non-financial information and information concerning diversity by certain large enterprises and groups. The deadline for implementing this directive is 6 December 2016.
Enterprises can benefit from a high proportion of women in several ways. The consensus is that no company can afford to forego the potential of highly qualified personnel. This applies equally to women and men.