More women attain management roles in companies

In August 2012, new data on the composition of management teams in German companies was released. The data showed the share of female managers rose from 22% in 2001 to 30% in 2010. The trend may be positive, but the figures also show that women generally hold lower and middle management jobs, and rarely make it right to the top. Social partners continue to debate the idea of a statutory quota for female board members, and how family-friendly measures could help women in management roles.

Background

In summer 2012, the German Institute for Economic Research (DIW Berlin) released the results of a new study (in German, 2.8Mb PDF) on the number of women in managerial positions in German companies and government administrations. The 2012 report came out at the same time as the latest proposal by EU Justice Commissioner and Vice President Viviane Reding calling for the introduction of a statutory quota for female board members.

Study results

Using data from the German Socio-Economic Panel Study (SOEP), the DIW has continuously monitored the composition of supervisory company boards since 2001. The latest report shows that more women are reaching management positions. In 2001 only 22% of executives in the German private sector were female, and by 2010 this share had risen to 30%. However, female managers are likely to hold lower and mid-level managerial positions and rarely make it into top management positions. As the DIW report highlights, in 2011 only 3% of board members in the 200 largest companies in Germany were women.

These figures can to some extent be explained by gender-specific occupational choices. The effects of working time constraints and family arrangements on individual career paths are also not to be underestimated.

Results show managers of both sexes to be well-educated, with 64% of women and 66% of men holding a university degree in 2010. However, male managers have, on average, four years more professional experience compared with their female colleagues. Men are also more likely than women to work for the same company for a long period of time. Both these factors favour increased prospects of career advancement for men.

Working time and family issues

The DIW report also analyses the great importance of working time issues. Long working hours are usually expected from managers and executives. This means that women seeking higher positions are also expected to work full time or longer hours. The DIW data shows that, on average, female managers worked a 45-hour week in 2010. Male managers worked two hours longer. The DIW also notes that part-time work is usually not compatible with management positions.

This situation, however, contrasts strongly with family-life patterns prevalent in Germany. Women are more likely to take on greater responsibilities for their families, taking parental and dependant-care leave, spending more time with the children and doing household tasks. This also has a significant influence on career development for women.

As the report shows, the share of female managers aged 35 to 54 years was much lower, at 29%, in 2010 than that of female managers aged 18 to 34 years (39%). This is attributed to the fact that family responsibilities are most pressing for women in the 35 to 54 age group.

Reaction from social partners

While the DIW report describes the latest developments in the composition of Germany’s managerial level, social partners continue to debate the idea of a statutory quota for female board members. EU Justice Commissioner and Vice President Viviane Reding has been a strong supporter of putting this type of initiative into EU legislation.

The Confederation of German Trade Unions (DGB) agrees that too few women reach top positions in Germany, and firmly supports the idea of helping more women into the boardroom by means of a statutory quota (in German). The union confederation maintains that a quota would not only support gender equality on boards, but might also initiate changes in working conditions which are currently oriented towards male norms – for example full-time work and longer hours. The DGB also insists that only by introducing legally binding rules can changes be brought about and effective control and sanction mechanisms be established for those companies not managing to fulfil the quota.

The German Confederation of Employers’ Associations (BDA), on the other hand, is opposed to a statutory quota for female managers. The BDA acknowledges in a press release (in German, 15Kb PDF) that too few women make it into management positions, but calls for company-specific solutions rather than a quota.

The BDA argues that the gender of an applicant cannot be the central criterion for filling a management position. Instead of a national law, it says companies need to define their own goals and strategies to raise the proportion of women managers. The BDA suggests the introduction of family-friendly measures and more kindergartens in order to assist employees achieve a work-life balance and support career development.

Commentary

From an economic perspective, the introduction of a statutory quota for female board members does not seem to be a solution. A company’s staffing of managerial and executive positions is driven by a search for the appropriate skills, qualifications and commitment to performing a certain task. As the DIW data shows, the total hours worked is a major factor in career advancement. It follows, then, that measures to increase the number of women in management positions should concentrate on enabling them to work full-time. Improving child care facilities is a prerequisite for this goal.

Sandra Vogel, Cologne Institute for Economic Research (IW Köln)

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