Dusseldorf The more women hold a board position in European, listed companies, the smaller the chance for other women to be appointed. Two women make it to the executive floor at most, after that it’s usually over. This is the result of a study by the Leibniz Center for European Economic Research (ZEW), which is available exclusively to the Handelsblatt.
This trend is also confirmed for corporations in the Dax, MDax and SDax, as a report published by the Allbright Foundation in October 2022 shows. Every year, the foundation counts how many women are appointed to executive and supervisory boards. Their balance sheet for an invisible upper limit for the proportion of women on the boards of German companies is sometimes even bleaker.
The Handelsblatt spoke to a ZEW study author, the managing director of the Allbright Foundation and representatives of DAX companies about the influence of the statutory quota for women when it comes to appointments to the board of directors – and what role the public plays in this.
With their study, the authors have for the first time empirically demonstrated a “saturation effect” on the topic of diversity in European listed corporations. The basis for this is a sample of over 27,000 observations in more than 3,300 listed companies from 17 countries in the period from 2002 to 2019. Allbright Managing Director Wiebke Ankersen is surprised: “We assume that in Germany it is usually after a woman There’s kind of a saturation effect,” she says.
Another finding is that the corporations usually do not fall behind their quotas. When a woman leaves a board, it is more likely that a woman will be appointed again. “When a man leaves the board, it is less common for a woman to follow,” observes ZEW study author Hanna Hottenrott, adding: “This is proof of an early saturation effect with diversity on the board.”
The real estate group Vonovia, for example, increased its board of directors to five members at the beginning of 2022 due to the takeover of Deutsche Wohnen – with one man. At the same time, Helene von Roeder, CFO for many years, switched to a newly created position for digitization and innovation. New board member Philip Grosse took over as chief financial officer. “We fill management positions primarily based on professional and social qualifications,” writes a Vonovia spokesman on request.
>> Read here: Parity only in 42 years – five reasons why board members in the Dax family are mostly men
Although an average of 25 percent of supervisory boards are now women, only around eleven percent of executive directors are women. On average, there is still less than one woman on the board of listed European companies. Allbright Managing Director Ankersen says: “The dynamics depend heavily on the mindset of the chairman of the board. If he doesn’t want a real transformation, it usually doesn’t happen.”
As a rule, up to four women are appointed to the supervisory boards of large European corporations. Four of the twelve members of the Vonovia Dax group are female. At Siemens, the proportion of women is even 45 percent. However, there is still only one woman on the executive board of Siemens. At the Annual General Meeting in May 2023, Vonovia plans to make Clara-Christina Streit Chair of the Supervisory Board. It is uncertain whether more women will then be appointed to the Vonovia Management Board.
Public pressure makes corporations more diverse
What experts agree on: Public pressure has made it easier for women to get into board positions. “Alibi or real equality: That’s where we see the gaps in the German economy widening,” says Ankersen.
Studies show that diverse teams make more profitable decisions. “It makes business sense to appoint as many women as men,” says the Allbright CEO. Even corporations that only have one woman on the board say that they are convinced of diversity, such as Siemens: “We are fundamentally of the opinion that quotas can only be a means to an end,” writes the group.
>> Read here: The proportion of women in tech jobs in Europe could continue to decline
But the author of the study, Hottenrott, has empirically proven that there are limits to this conviction: “Once a legal women’s quota has been reached, for example, it is much less likely that a woman will be appointed again.” Quotas would contribute to women being appointed at all. But the economist also says: “Cultural change must come from the companies themselves.”
The companies BMW, Siemens and Vonovia asked by the Handelsblatt meet the legal quota, but the number of women on the board has been one for three years. The ZEW study came to the conclusion that “although quotas raise awareness of the gender issue, they can also lead to symbolic appointments”. The requested companies deny this indirectly.
More recent data show higher proportions of women in Dax companies
The Allbright Foundation report shows that an average of 20.2 percent of board members in DAX companies are female. The ratio of Dax, MDax and SDax companies together is now 14.2 percent, because MDax and SDax companies had on average only 11.3 and 10.4 percent board members in 2022.
This puts the proportion of women on the executive boards of Dax, MDax and SDax companies together (14.2 percent) above that of European listed companies. According to the ZEW study, the rate there was around eleven percent. This may have something to do with the fact that the study’s data set only contains observations up to the end of 2019. However, this is the most recent random sample of this magnitude, since the Europe-wide collection has been greatly delayed due to the reading in of annual business reports from over 3,300 corporations.
The proportion of women at Allianz, Beiersdorf, Telekom and Mercedes is increasing
In Germany, four companies stand out where the saturation effect has not set in after the second woman on the board: Allianz, Beiersdorf, Deutsche Telekom and Mercedes-Benz. With four men and three women (42 percent), Beiersdorf has almost reached parity. However, Ankersen points out: “Companies that already have two or more women on the board are the absolute exception in Germany.”
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