The Widdershins

Activist Monday: The 30% Solution Hits German Corporations

Posted on: December 15, 2014

Hello Widdershins! Ah, the drama of funding the American government. Never have so many public servants done so much for so few, as the latest budget passed the House and Senate with unprecedented perks for the .0001%. Let’s take a break from the United States’ depressing and corrupt governmental dysfunction, and wander over to the cold and gloomy shores of Germany for some more inspiring news.

German Chancellor Angela Merkel’s Cabinet has approved legislation that will require leading companies to have at least 30 percent women on their supervisory boards from 2016.

Manuela Schwesig, the minister for families and women, on Thursday called the bill “a milestone on the way to more equality.”

Women hold just 22 percent of positions on the supervisory boards of companies listed in Germany’s benchmark DAX index, according to Economy Ministry figures.

The plan will affect 100 listed companies starting 2016. Companies failing to recruit enough female directors will be barred from giving vacant seats to men [emphasis mine].

To me, that last part is key. Without having this provision in the legislation, it would be far too tempting for these corporations to claim that they could not find any qualified women, and hire men instead, keeping the current representation either the same, or perhaps worse.

Do I really think this would happen? After almost four years of working as lower-to-middle management in the corporate world full-time, I’m afraid the answer is “hell, yes.” In my experience and in my research, I’ve seen a huge, invisible bias against women in corporate America, and without big steps like this at the federal level, I truly don’t see it changing. It’s tough enough to convince people that they aren’t giving qualified women a fair chance at upper-level leadership roles, trust me. I’ve had some very discouraging conversations on this topic with men, one of whom asked whether I would rather have unqualified women instead of qualified men. Yeah, that’s likely to happen…as Bella Abzug said,

Our struggle today is not to have a female Einstein get appointed as an assistant professor. It is for a woman schlemiel to get as quickly promoted as a male schlemiel.

Sing it, sister!

Still, it does seem to be true that it is not easy to determine whether these quota systems are approaching the problem the right way, or even whether they have been good, bad or indifferent for business. To be clear: The quotas themselves are being evaluated here, not the question of whether it is beneficial to have more women leaders in your company. That question has already been answered in the affirmative. Catalyst.org is just one of the groups which have conducted research that proves it’s good business to hire more women directors. By the numbers, Catalyst found that:

  • Return on Equity: On average, companies with the highest percentages of women board directors outperformed those with the least by 53 percent.
  • Return on Sales: On average, companies with the highest percentages of women board directors outperformed those with the least by 42 percent
  • Return on Invested Capital: On average, companies with the highest percentages of women board directors outperformed those with the least by 66 percent.

I think it will be very interesting to see how the quotas affect business in Germany and other countries with similar legislation. In the meantime, it’s great to see how this awareness of the 30% minimum representation figure continues to rise in the more civilized countries. Perhaps in time, it will even sink into our thick Murican skulls.

This is an open thread.

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12 Responses to "Activist Monday: The 30% Solution Hits German Corporations"

Excellent and definitely heartening post. Wow. Dare we dream?

I’ve been working for corporations for forever too and see the same shit over and over. Corporations really don’t know what to do with women. I guess they figure if they keep the number of women low, the culture stays male-oriented and all the thinking and behavior stays that way as well.

Most of the women-owned funds did rather well during the financial meltdown. It turns out that their risk-averse nature save their bottom line. It’s true though that when times were good, their earnings paled compared to the male-dominated firms.

I wish I had a ton of money and could buy a corporation. I would hire a mix of men and women AND run the place to profit from both kinds of thinking/processing/implementing. We’d blow everyone else away.

Oops, sorry–I missed the click to “read the rest of this entry” and didn’t notice that you had all that data! Thanks!

You’ve come a long way baby.

It was that damned Myrtle that started all the problems!

SophieCT – No worries! Glad to see you, and I couldn’t agree with you more. We need men and women in equal proportions in order to get the best out of our businesses and governments.

Fredster – I love those old YouTubes. Super-scary and yet, not all that different from today in many respects.

Excellent post and just to drop a scintilla of positivity — there are companies that “get it” — far too few, but the number is growing. As ironic as this is, it will take more men realizing that women are better at business than they are and then acting appropriately. The more progressive corporations are learning the lesson. Sadly, they aren’t doing it because it’s the right thing to do, they are doing it for higher returns and greater market share. The battle won’t be won until they start doing it because it is the right thing to do as well.

MB@6: And sadly, really not that long ago.

The battle of the 5 and 8 teams and the Saints win. Meh.

I’m a little concerned for our friend annie. Hope she’s not having trouble with the rains and mudslides in cali.

Fredster, we are fine, thanks for worrying about us! Just super busy this week!

MB, love your post! I want to work for Sophie when she gets her own business going!

annie@11: Glad to hear it. I just see so many areas that were scarred by the brush fires earlier and now with the rain, you know they are going to have slides

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