[Asia Economy Reporter Park Byung-hee] Large publicly traded companies in Germany have recently been competitively appointing female executives. This is due to the law mandating female executives.
According to major foreign media on the 8th (local time), under the law mandating female executives, 67 listed companies must have at least one female executive.
Accordingly, in the past few weeks, energy company E.ON, semiconductor company Infineon, and sportswear company Adidas have appointed female executives to their boards. Pharmaceutical company Bayer announced that it will balance its currently all-male board to an equal number of men and women by 2030.
Among the 67 companies, 26 still have no female executives, so announcements of female executive appointments are expected to continue.
The proportion of women in German corporate management is relatively low.
According to the German female directors' organization FidAR, the proportion of women in the management of major companies included in the German DAX index is only 17%. The proportion of women in companies listed on the UK FTSE 100 index is 33%, and in US S&P 500 index companies, it is 30%.
According to a survey by consulting firm Ernst & Young, 60% of major German companies included in the DAX, MDAX, and SDAX have no women at all in their management. Among 681 directors, only 78 are women. This is an increase of 13 compared to one year ago.
In Germany, a law was enacted in 2016 requiring the proportion of women in management positions to be at least 30%. The German government expected that increasing the number of women in management would naturally lead to more female participation on boards.
However, this did not happen. Hiltrud Werner, a director at Volkswagen, pointed out that policymakers overlooked the fact that there are not many women on the nomination committees for directors.
In the business community, there are complaints about the difficulty of finding suitable female executive candidates.
The Federation of German Industries (BDI) conveyed to the government that due to frequent career interruptions, women often have shorter careers and thus there are not many female executive candidates. Despite companies' desperate efforts, it is difficult to find qualified female executive candidates.
Professor Anja Kirsch of Freie Universit?t Berlin argued that increasing women's participation on boards strengthens internal oversight and can reduce problems occurring within companies. She said that a survey of 75 companies confirmed that women ask more questions and demand more information, enabling stronger supervision.
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