Germany has seen significant legal developments regarding diversity (including beyond gender) in the last few years.
In 2016, the German Bundestag (Parliament) adopted a law that requires 30% of supervisory board members of companies headquartered in Germany to be comprised of ‘the respectively underrepresented gender’. If, for any newly created or up-for-election position, no female candidate can be found, the seat needs to remain empty. By the end of the 2019 German AGM season, all DAX30 companies had 30% or more female supervisory board members. The top three firms leading in female representation at this level are Munich RE (45%), Deutsche Boerse (42.9%) and Fresenius Medical Care (40%).
Since 2017, companies have been required to set and publish targets for supervisory boards, management boards and upper/senior management in their annual reports. At the time of our engagement, 7 of the 30 companies had 0% gender diversity in their management boards, but 5 of them did have targets aiming for a change before 2022. Two companies have a 0% target for women within the board of management, namely Heidelberg Cement and RWE. We communicated clearly that this is unacceptable, and that their targets need to be readjusted.
Employee flexibility, crucial for retaining diverse talent, includes parental and adoption leave options that extend beyond women. While German parental paid leave is relatively generous – up to 14 months if both parents combine their leave – only one company, Merck, was in the process of establishing global paid, gender-neutral parental leave policies.
German companies with more than 20 employees are required by law to fill at least 5% of their workforce with “seriously disabled persons”. However, many companies disregard the quota and can pay an equalization levy instead5 . Not all DAX30 companies report the share of disabled people among their workforce. Conversations revealed that the numbers assessed have shifted in the last few years to also include mental disability or mental health issues more broadly. We encouraged further disclosure.
Since December 2018, Germany officially recognizes three genders: female, male, and “diverse”. The latter should cover intersex persons, as well as everyone who does not feel comfortable in one of the binary categories. Some employers have started issuing job adverts referring to “(w/m/d)” – weiblich, männlich, diverse (female, male, diverse)6.
Finally, in March 2019, the German Social Democratic Minister for Family, Youth, Women & the Elderly outlined plans for corporate fines if targets for women in senior management and executive boards are not established or met. The minister also highlighted her desire for executive board quotas.