Thursday, November 27, 2014

Germany passes law to increase women on corporate boards

Germany's coalition government passed a law yesterday that will require large corporations to ensure that at least 30% of supervisory positions on the Board of Directors are held by women by 2016.  The law is expected to be approved by Angela Merkel's cabinet on Dec. 11.  Currently, between 80-85% of corporate board positions in Germany are held by men.  The law is expected to affect approximately 100 publicly listed companies.  In the future, another 3,500 companies will be required to adopt gender equity targets.  Similar measures are  being considered in the Netherlands, Norway and Italy.

Women also lag behind men in positions on corporate boards in the United States. According to Catalyst, women occupy approximately 16.9% of board positions in the United States. However, it may be difficult for a similar measure to pass constitutional muster in the U.S.  The U.S. Supreme Court typically examines gender-based discrimination using intermediate scrutiny, which begins with a presumption that the law is invalid.  To overcome the presumption, the proponent of the law must demonstrate that the gender quota is substantially related to an important government interest.  


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