Around five years after the so-called First Leadership Positions Act (“FüPoG I”) came into force, the German government has evaluated the progress on the subject of equal participation of women and men in leadership positions in the private sector. Since women are still heavily underrepresented on management boards in particular, there was still a need for action. The current draft legislation on the Second Leadership Positions Act (“FüPoG II”) intends to realign the legal framework.
In addition to the fixed 30% quota on supervisory boards under FüPoG I, listed companies that are also subject to parity codetermination will be subject under FüPoG II to a minimum participation requirement at the management board level of at least one woman (and at least one man), if the board consists of more than three members. The flexible quotas (so-called target sizes) for supervisory boards, management bodies and the top two management levels of publicly listed or co-determined companies will remain in place. In this respect, however, extended reporting and justification requirements will apply, in particular, in cases of determination of a zero target. By embedding the obligation to justify in the system of sanctions under commercial law, it would be possible to prosecute violations as administrative offenses. In this respect, companies could face severe fines in the future.
The bill has remained virtually unchanged until the current reading in the German Federal Parliament (Bundestag). Nevertheless, its final implementation remains to be seen. If it comes into force, it will also be interesting to see how stringently any violations of the extended reporting requirements are monitored and sanctioned.