German Parliament (Bundestag) adopted the Equal Participation of Women and Men Act (so-called women's quota (Frauenquote))
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1 16 March 2015 German Parliament (Bundestag) adopted the Equal Participation of Women and Men Act (so-called women's quota (Frauenquote)) On 6 March 2015, the German Bundestag adopted the Equal Participation of Women and Men in Leadership Positions in the Private and Public Sector Act. Material steps soon to be implemented are: Obligation to determine target figures and deadlines for compliance The act provides for an obligation of companies to determine target figures for the proportion of women. The act applies to all companies that are either publicly listed or (at least) subject to co-determination pursuant to the German One Third Participation Act (Drittelbeteiligungsgesetz). This primarily includes German stock corporations (Aktiengesellschaft; AG), European companies (Societas Europaea; SE) or German limited liability companies (Gesellschaft mit beschränkter Haftung; GmbH). These companies must determine target figures for the proportion of women on the supervisory board, the executive board or the management and the two executive levels below executive board or management level. In particular, the following measures are to be taken in a timely manner: The executive board or management will... define the two executive levels below executive board or management level on the basis of the actually established hierarchy levels in the company identify the status quo of the proportion of women on the two executive levels below executive board or management level as base figure for the target figures to be determined determine the target figures for the proportion of women on the two executive levels below executive board or management level for the first time by no later than 30 September 2015; should the existing proportion of women be below 30%, the target figures to be determined must not be lower than the status quo, section 76 (4) of the German Stock Corporation Act (draft bill) (Aktiengesetz-Entwurf; AktG-E) and section 36 of the German Limited Liability Companies Act (draft bill) (GmbH-Gesetz- Entwurf; GmbHG-E) determine, together with the target figures, deadlines for compliance these target figures; the deadlines first to be determined must not extend beyond 30 June
2 The supervisory board (AG) or the shareholders' meeting (GmbH) will... identify the status quo of the proportion of women on the executive board or the management and on the supervisory board as base figure for the target figure to be determined determine the target figures for the proportion of women on the supervisory board and the executive board; in the case of a GmbH which is subject to the German One Third Participation Act, the shareholders' meeting as a general rule will determine the target figures for the supervisory board and the management; the target figures must be determined by no later than 30 September 2015; should the existing proportion of women be below 30%, the target figure to be determined may not be lower than the status quo, section 111 (5) AktG-E and section 52 (2) GmbHG-E determine, together with the target figures, deadlines for compliance the target figures; the deadlines first to be determined must not extend beyond 30 June 2017 The determinations with regard to target figures and deadlines must be documented also in view of the statutory reporting obligations. Fixed gender quota of 30% on the supervisory board When new supervisory board members of publicly listed companies are appointed and the supervisory board is composed of an equal number of shareholder and employee representatives, a fixed gender quota of 30% must be observed as of 1 January 2016 and the quota of the under-represented gender gradually increased accordingly. This obligation applies to AGs, partnerships limited by shares (Kommanditgesellschaft auf Aktien; KGaA), SEs and companies formed by cross-border merger, section 69 (2) and (3) AktG-E and sections 17 (2), 24 (3) of the SE-AG-E. In the AGs and the KGaAs, the fixed quota is to be met by the supervisory board as a whole (joint compliance; Gesamterfüllung) unless the shareholder or employee representatives contest the joint compliance (in the case of SEs and companies formed by cross-border merger the law does not provide for a right to contest joint compliance). The following measures are to be taken already now to fulfil this fixed quota: calculation of the status quo of the quota of the under-represented gender in the event of a joint and a separate compliance (Gesamt- und Getrennterfüllung); figures are to be rounded up or down according to mathematical rules identification of the current terms of office of the individual supervisory board members and the scheduled end of the respective term of office active search for candidates of the under-represented gender in a timely manner due to the expected race for the best candidates talks between the shareholders' and employee representatives on the supervisory board in order to explore the willingness of the respective other group to declare a waiver of objection against joint compliance in order to better determine the required number of candidates of the under-represented gender precautionary search for potential candidates of the under-represented gender in the event of an early departure of a supervisory board member as the fixed gender quota must also be observed in the event of an appointment by the court 2
3 Publications Stüber, Katharina, [Gesetz zur Frauenquote in Kraft] DStR 2015 [in Vorbereitung] Stüber, Katharina, Regierungsentwurf zur sog. Frauenquote Eine Übersicht der Neuerungen, CCZ 2015, 38 Stüber, Katharina, Der Referentenentwurf zum Gesetz für die gleichberechtigte Teilhabe von Frauen und Männern an Führungspositionen in der Privatwirtschaft und im öffentlichen Dienst im Überblick, CCZ 2014,
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