Hermes EOS, the investor adviser, is giving German companies a “final warning” to have at least three women out of every ten top executives within five years and is promising to vote against any supervisory boards that fall short.
On average, German companies would have to more than triple the share of female management board members to comply with Hermes EOS’ call.
The move reflects an intensifying push by European fund managers to improve gender diversity at the top of companies. Most of their efforts have focused on company boards, but several have started to take a closer look at the senior management layers below the board.
London-based Hermes EOS is representing and advising clients holding €523bn in assets globally. It does not disclose how many of them are linked to German firms. Its new corporate governance principles for Germany, updated in late May urge companies “to set out plans to reach the 30 per cent target within a reasonable timeframe” , usually between three to five years.
Two-thirds of the companies still don’t have any female board member. Bayer, the German aspirin-to-fertiliser group that recently suffered an unprecedented vote of no confidence against its leadership, has no women among its seven management board members. Deutsche Bank has only one woman out of nine top executives, while Daimler has two women among nine senior managers.
“With regard to diversity on the management board and below, Germany is still lagging very much behind internationally,” said Mr Hirt, adding that a significant number of German companies have not stated the ambition to change this.
“To them, this is our final warning shot,” said Mr Hirt, adding that Hermes EOS wants to see “decisive action” and otherwise will use “the ultimate sanction” of voting against the re-election of any supervisory board member.
Since 2015, listed German companies have been required by law to lift the share of female supervisory board members to at least 30 per cent.
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