German Liberals block women’s quota for Europe’s corporate boards

This investigation has been updated in the section below the text.

With the directive “on improving the gender balance among non-executive directors of companies listed on stock exchanges”, former EU Commissioner Vivian Reding wanted to oblige Europe’s big companies to increase the proportion of women on supervisory boards to 40% as early as 2012. This was met with broad approval in the EU Parliament. But in the Council of the EU, where national governments are also legislators in parallel to the parliament, this was fiercely opposed by a blocking minority of social conservatives, populists and EU sceptics from Eastern Europe, Scandinavia, along with Germany. Together these countries made up 36% of the EU population — enough to prevent any EU law from passing.

Without the Germans, this would not have been possible. But till the very end, the CDU/CSU majority in the Grand Coalition forced the former Minister for Women’s Affairs, Franziska Giffey (SPD), to oppose the text, based on “scrutiny reservation with regard to the legal basis” in the EU Council and to refuse approval, as Investigate Europe reported. 

This blocking alliance now seems to be at its end, with the departure of the conservatives from the German government. And with President Macron keen to put quotas back on the European agenda, the French presidency of the Council could reap the political benefits of a breakthrough. “This draft has been in limbo for years. I believe that we can finally bring it to a conclusion,” he said when presenting his ambitions for the French presidency. A new vote has been scheduled in the Council of Ministers for 14 March.

But Macron’s optimism was premature. As diplomats from several countries in Brussels confirmed to Investigate Europe there is still no agreement from Germany. The new Green Minister for Women’s Affairs, Anne Spiegel, assures IE that she “very much welcomes the fact that the French President wants to push for the adoption of the directive.” And the Social Democrats have not changed their positive stance either, confirms the responsible spokesperson of the parliamentary group, Leni Breymeier. 

But the liberal FDP has greater reservations. Her party has “always rejected women’s quotas as a state requirement,” confirms Nicole Schäfer, the Liberals’ women’s policy spokesperson in the Bundestag. It is, therefore, “unclear how we will proceed with the proposed EU directive.” She could not “make a statement on this yet.”

As a result, the German government is currently unable to speak on the matter. “We are not getting a clear signal from Berlin,” complains one of the diplomats involved. When asked, a German government spokesperson merely explained that the EU Commission’s proposal for a directive — which has been known for years — was “currently being examined among the ministries and a common position of the federal government is being brought about”. However, they did not want to say when exactly and who would determine the German position in the Council.

The liberals’ fears that the EU law could lead to a stranglehold on German companies are “unfounded”, says the Austrian Social Democrat Evelyn Regner, who, as rapporteur of the EU Parliament, has been fighting against the blockade in the Council for 10 years. After all, since 2016, Germany has had a statutory quota of 30% women on the supervisory boards of the 105 affected companies in the country. That has worked: currently, around 32% of non-executive board members in Germany’s big companies are women. And the EU Parliament has long since decided that countries that have made progress with a binding quota rule do not have to raise it to the 40% target. “Therefore, the adoption in the Council would not change anything for Germany,” Regner assures. What would change, however, would be the situation in the 20 countries that so far have no regulations. It has long been empirically proven that companies with more female managers are economically more successful, says Regner.  

The German stalemate has also become a battleground for the President of the EU Commission. Ursula von der Leyen was once herself involved in blocking the EU law as labour minister in the Merkel government. She now sees that as a mistake. “I have learnt that to have a critical threshold of women on boards, you need a legal [framework] nudging companies in the right direction,” said Von der Leyen to the Financial Times. “If we look at the EU overall . . . and at the challenges ahead of us, we need all the width of talents we have, and of course, for that, we need to open up for women in leadership positions,” she said. 

Against this background, it is questionable whether the German Liberals will actually maintain their opposition. If they were to stick to it, it would also be highly embarrassing for their party friends in the EU Parliament. There, the FDP members belong to the same group as those of “La Republique en Marche”, President Macron’s party. 

Update: Pressure from the French government and the intervention of former German Minister Ursula von der Leyen did have an effect in the end. The German liberals gave up their resistance. As a result, the German government decided on February 17 to give its approval to the EU directive “on improving the gender balance among non-executive directors of companies listed on stock exchanges”. Prior to this, the Danish and Dutch governments had also signaled that they were giving up their previous opposition. This means that the adoption of the EU directive, scheduled for March 14 in the Employment and Social Policy Council, is considered certain. “Finally, a qualified majority in the EU Council can be achieved,” said Anne Spiegel, Minister for Women’s Affairs of the Green Party. This will end the ten-year blockade against women’s equality in the management of listed companies pursued by the Merkel government and its allies in Eastern Europe, Scandinavia and the Netherlands.