Women’s quota – Legal definition and comprehensive overview
The so-called women’s quota is a legal instrument intended to promote equal opportunities, equality, and diversity in various societal spheres, particularly in professional life. This article examines the women’s quota from a legal perspective, explains its fundamental principles, and presents the key legal foundations, court rulings, developments, and controversies in the context of national and European regulations.
Legal foundations of the women’s quota in Germany
Statutory provisions
The women’s quota is anchored in various laws in Germany, particularly regarding the filling of leadership positions in companies and public institutions. The central legal foundations include:
- Act on the equal participation of women and men in leadership positions in the private and public sector (FüPoG and FüPoG II)
Since 2015 (FüPoG) and in the revised version since 2021 (FüPoG II), the Act obliges large companies and groups to set minimum requirements for the proportion of women on supervisory boards and, in part, executive boards.
- General Equal Treatment Act (AGG)
The AGG prevents discrimination on the basis of gender and serves as a framework for equality measures, which also supports quota regulations.
- Federal Gender Equality Act (BGleiG) and State Gender Equality Acts
For federal and state institutions, the BGleiG or the respective state laws define objectives and measures to increase the proportion of women in the public sector. This may also include the introduction of quota regulations.
Objectives and scope
Quota regulations predominantly apply to large, publicly listed companies and companies with mandatory co-determination. For smaller businesses and companies outside of publicly listed structures, binding quotas generally do not apply, but there are reporting and justification requirements if voluntarily set targets are not met.
Configuration of women’s quotas
Distinction: Minimum quota and target quota
- Minimum quota:
A binding legal requirement prescribing a certain proportion of women (in percent) in a body or institution (e.g., 30% women on the supervisory board of large companies).
- Target quota / Flexi quota:
Companies or organizations set their own target levels for the proportion of women in leadership positions. Achieving these targets is not compulsory but failure to meet them must be documented and justified.
Implementation in companies
Companies subject to the legal requirements must regularly report how they meet the quotas and what measures they take to increase the proportion of women. Non-compliance may result in restrictions, such as in the appointment of supervisory board positions.
Women’s quota in the German public sector
In the public sector – in addition to the Federal Gender Equality Act – there are specific provisions that give priority to hiring or promoting women with equal qualifications if they are underrepresented in the respective area (so-called ‘positive measures’ according to Art. 3 Basic Law). The arrangements range from fixed quotas to promotion plans and reporting obligations.
European legal framework
EU-level directives and developments
The European Union has promoted gender equality in several directives. Particularly noteworthy is Directive (EU) 2022/2381 to strengthen gender balance on the boards of listed companies, which requires a Europe-wide minimum quota of 40% for underrepresented genders on supervisory boards by 2026.
Relationship to national law
Member states are required to implement European specifications into national law. Germany’s FüPoG II is a response to the trend towards European harmonization and, in some aspects, exceeds the EU minimum requirements.
Legal aspects and controversies
Constitutionality and prohibition of discrimination
The introduction of women’s quotas touches on the prohibition of discrimination (Article 3 Sections 2 and 3 of the Basic Law). However, the courts have recognized that quotas may be justified as long as they are necessary to offset existing disadvantages and are appropriate and proportionate.
Effects on individual rights
Quota regulations affect the rights of candidates to access and be selected for leadership positions. Positive measures in favor of women are allowed, as long as there is no automatic precedence solely based on gender; an individual assessment of suitability remains mandatory (see judgment of the European Court of Justice C-407/98 “Graduates case”).
Sanctions and enforcement
Violations of minimum quotas regularly result in the invalidity of appointments to board positions. Sanctions in the case of target quota violations consist mainly of transparency and reporting obligations and public scrutiny through disclosure in the Federal Gazette.
Women’s quota in international comparison
Many European countries have introduced women’s quotas, for example Norway, France, and Spain. The regulations and quota levels vary considerably. National laws are often based on recommendations from the European Commission and international organizations. However, implementation and enforcement take place at the national level, leading to differing outcomes regarding actual equality.
Recent developments and outlook
The trend towards binding quotas and reporting obligations is increasing both in Germany and within the European Union. With implementation of the new EU Directive, further harmonization and tightening of requirements is expected in coming years. Companies and public institutions will thus face growing obligations to take concrete measures to increase the proportion of women in leadership positions in order to sustainably promote equality.
Literature and sources
- Act on the equal participation of women and men in leadership positions in the private and public sector (FüPoG, Federal Law Gazette I p. 642)
- Federal Gender Equality Act (BGleiG)
- General Equal Treatment Act (AGG)
- Directive (EU) 2022/2381
- Judgment of the European Court of Justice C-407/98
- Federal Ministry for Family Affairs, Senior Citizens, Women and Youth: Gender Equality Topic Portal
Note: This article exclusively explains the legal aspects of the women’s quota. Further sociological, economic, or ethical discussions are not addressed.
Frequently asked questions
What legal regulations on the women’s quota currently exist in Germany?
The legal regulations on the women’s quota in Germany are mainly derived from the Act on the equal participation of women and men in leadership positions in the private and public sector (FüPoG) and its further developments (FüPoG II). Since 2016, publicly listed and co-determined companies are required to set targets for the proportion of women on supervisory boards, executive boards, and the top two management levels below the executive board, and to report publicly on their progress. For supervisory boards of certain companies – especially stock corporations, partnerships limited by shares, and limited liability companies that are both publicly listed and co-determined – a binding gender quota of at least 30 percent for new appointments applies. Since FüPoG II came into force in 2021, large companies with four or more executive board members must have at least one woman on their executive board. Corresponding requirements apply for the public sector, for example through the Federal Gender Equality Act, which contains specific targets and measures to promote women.
For which companies is the women’s quota legally binding?
The legally binding minimum quota in Germany applies to companies that are both publicly listed and subject to parity co-determination – currently around 100 companies. These companies are required to raise the proportion of women on the supervisory board to at least 30 percent for new elections, provided there are vacancies. If the quota is violated, the affected supervisory board seat remains unfilled (the ‘empty chair’ rule). For executive board positions, at least one woman must be appointed, but only for companies that are publicly listed and have more than three board members. For all other companies, such as smaller enterprises or those without listed status, there is no legally binding quota, but only self-imposed target regulations.
What are the legal consequences of violating the women’s quota?
A violation of the legally prescribed women’s quota on the supervisory board has the immediate legal consequence that the respective supervisory board seat is considered unfilled (the ’empty chair’ in accordance with § 96 section 2 AktG). This means the company in violation cannot fill the position otherwise, as long as the minimum quota is not met. However, there are no criminal or fine regulations. In the case of target quota requirements, for example for executive board members or the two management levels below the executive board, the law only provides for disclosure obligations and potentially reputation-damaging publications (‘naming and shaming’), but no immediate sanctions or coercive fines if the targets are not met.
Are there differences regarding the women’s quota between the private sector and the public sector?
There are sometimes significant differences in the legal requirements for the women’s quota between the private and public sectors. In the private sector, FüPoG and FüPoG II primarily apply, while in the public sector, the Federal Gender Equality Act (BGleiG) and the Federal Bodies Appointment Act (BGremBG) are relevant. For the federal government, these stipulate a fixed quota of at least 30 percent women for the appointment of bodies. For leadership positions in the public service, there are targets, measures, and reporting requirements to continuously increase the proportion of women, but without rigid statutory quotas as found in supervisory boards in the private sector.
How is the women’s quota regulated in European and international legal comparisons?
In Europe, there are different legal regulations regarding the women’s quota. Norway was the first country in 2003 to introduce a binding 40-percent quota for supervisory boards of publicly listed companies. Other countries such as France, Belgium, Italy, and Spain followed with similar regulations, often accompanied by sanctions such as fines or refusals to register executive appointments in the event of violations. At the EU level, the directive to improve the gender balance in corporate boards of publicly listed companies entered into force in 2022, obliging member states to implement at least a 40 percent quota in supervisory boards by 2026. Implementation into national legislation is mandatory, so regulations in Germany may also be subject to further adjustment. Internationally, legal systems differ considerably – for example, in the USA, there are no nationwide binding quota regulations.
What legal exemptions and transitional periods exist?
The FüPoG and FüPoG II foresee various exemptions and transitional arrangements. The 30-percent quota for supervisory boards, for example, only applies to new appointments and not to current mandates. The transitional periods vary; for example, the initial entry into force of the 30-percent rule on 1 January 2016 came with a transitional period for ongoing mandates. The minimum participation in the executive board only applies when a company has more than three members on the board and only for future appointments. Smaller companies, those not publicly listed or not subject to co-determination, are completely exempt from statutory quotas, but may be subject to voluntary commitments or corporate reporting requirements.
What reporting and disclosure requirements apply regarding the women’s quota?
Companies subject to the FüPoG or FüPoG II are required to report annually, as part of their non-financial reporting or in their corporate governance report, on the targets set, the progress made, and, if targets have not been met, the reasons for this (§ 289f HGB, § 315d HGB). These details must be published in the Federal Gazette as well as on the company website. Failure to comply with these obligations may result in administrative fines according to § 335 HGB. Public sector entities are also subject to reporting obligations, for example under § 21 BGleiG, in the context of the regular gender equality report. Compliance with and publication of these reports is monitored by the responsible supervisory body (e.g., the Federal Office of Justice).
