Earlier this week, Amanda Rajkumar announced that she was leaving her position as head of Global Human Resources at Adidas AG after just two and a half years on the job.
In making the move, she joined a long list of women who have stepped back from leadership roles at German companies. Thyssenkrupp AG chief executive officer Martina Merz and Hamburger Hafen und Logistik AG CFO Tanja Dreilich both resigned in June, around the same time that Christiana Riley departed Deutsche Bank AG’s investment arm – leaving the company with only one woman on its nine-person management board. She followed ETF executive Fiona Bassett, who said goodbye to the bank several weeks prior.
These departures reflect the difficulties that German companies have had in hiring and retaining female talent. The numbers are stark: at the end of 2022, women held less than 16% of seats on the management boards of the 160 companies listed in the German benchmark DAX, MDAX and SDAX indexes. That’s up slightly more than two percentage points from the year before. Since January, almost 23% of executives who decided to leave the management boards of these firms are female, according to data compiled by Bloomberg.
Women are also spending less time in top roles than their male peers. While men stay on average more than five and a half years in a C-suite job, women who have resigned from German management boards or announced their departure since the beginning of this year had spent on average less than three years in their position.
Many companies have been slow to address these issues. Since 2016, the largest listed companies have been required to appoint women to at least 30% of newly-assigned supervisory board seats. While mandatory gender quotas for executive boards had been hotly contested for years, in 2021 the ruling coalition finally agreed that some listed companies should have at least one woman in their top management ranks. Yet the rule has so many exemptions that it currently applies to fewer than 70 firms.
Outdated ideas about work/life balance and domestic obligations are one reason why women are underrepresented in upper management. Women in Germany are frequently expected to pursue their careers while running a household and raising children. Moreover, “mothers working long hours are often perceived as uncaring and neglectful,” said Lena Hipp, research professor at the WZB Berlin Social Science Center. This is true even of women in leadership roles.
Antiquated workplace assumptions are another contributing factor. Olga Mordvinova, a software engineer who most recently held a management position at ProSiebenSat1.Media SE before leaving to focus on her own company, knows from experience that women in Germany can struggle to be seen as equals to their male colleagues. “I had clients or suppliers confusing me with an assistant, asking me to get them a coffee,” she said, adding that people rarely picture a young woman when they think of corporate executives.
When it comes to finding women for top jobs, firms often look elsewhere rather than cultivate their own employees. “Poaching rates are much higher for women in leadership roles,” said Christian Boehnke, managing partner at Hunting/Her, a recruiting firm for female executives. He added that some companies don’t bother to address the issue at all. “Women also face companies that don’t practice what they preach in terms of fostering gender diversity,” he said.
Almost two-thirds of female board members at Germany’s largest listed companies are outside hires, a recent study found, which can put them at a disadvantage in understanding company culture. “Men who have already worked at lower levels in a company benefit from networks that are often not available to women,” said Regina Lindner, managing partner at Hunting/Her.
Odds of success for female leaders are even lower when a company is in crisis. When German dialysis specialist Fresenius Medical Care AG brought in CEO Carla Kriwet in 2022 to rein in the company’s runaway costs, she famously quit after just two months. This so-called “glass cliff” phenomenon, in which women are hired for leadership roles in high-risk environments, also contributes to high rates of departure.
There are ways to reverse these dynamics, however, such as fostering female talent at lower management levels. This is especially true in industries where women are still considerably outnumbered by men. “A large majority of new hires in the tech industry are still men,” said Mordvinova. “That’s why female CTOs are still so few and far between.”
When companies have invested in their own pipelines of female talent, the payoff has been noticeable. Take Beiersdorf AG, for example: The Nivea maker set its own gender quotas for top management levels more than a decade ago, and has linked executive board bonuses with hitting those goals. It also offers part-time leadership roles to employees with small children — who are able to attend the company’s on-site Kindergarten.
The results are clear. With three women and four men, its executive board has one of the highest level of gender parity across all 40 Dax companies.
