Medium- and large-sized family companies are the backbone of the German economy but, according to a new study, they are continuing to fall behind international companies when it comes to gender diversity, with potentially serious consequences. 

Two-thirds of family businesses don’t have a single female board member

According to the non-profit Allbright Foundation, at the beginning of March 2022, just 8,3 percent of executive board members in Germany's top 100 family businesses were female, compared to 14,3 percent in the 160 DAX-listed companies. More than two-thirds of family businesses in Germany do not have a single female member on their board.

Even more crucially, however, while the larger international companies - which are more in the public eye and subject to strict transparency requirements - have made progress in increasing the proportion of female board members over the past few years, family-owned companies are not apparently making such an effort. 

The proportion of women on family business management boards has barely moved in recent years: two years ago, the value was around 7 percent. For businesses completely owned by one family, the proportion has remained unchanged at 4,8 percent since March 2020. 

Larger German companies focus on diversity in recruitment 

The Allbright Foundation argues that these different developments are purely down to different approaches to recruitment: when vacancies come up in stock exchange companies, they systematically recruit women, whereas family companies tend to almost always hire men. 

This conclusion is backed up by the data: since March 1, 2020, 38 percent of new workers hired by 40 DAX companies have been female, while for the 70 completely family-owned companies it was only 6 percent. Almost 90 percent of newly-appointed executives in family businesses are West German men. 

“Diversity attracts top talent”

“Family businesses risk becoming second-choice employers in the competition for the brightest minds,” said the managing directors of the Allbright Foundation, Wiebke Ankersen and Christian Berg. “Diversity attracts top talent, an outdated understanding of leadership does not… You shouldn’t underestimate diversity and equal opportunities as a zeitgeist topic.” 

In a concluding remark for the study, Federal Minister of Economics Robert Habeck wrote: “Successful transformation is unthinkable without diversity, without the equal integration of women into the economy.”