Gender Diversity Stagnates on DAX 40 Management Boards

Every year, Russell Reynolds Associates analyzes the composition of management boards in the DAX 40. Our 2023 analysis reveals some sobering trends, including:

• After years of steep increases, women’s representation on DAX 40 management boards is stagnating.
• Women management board members are leaving office much sooner than their male counterparts.
• Management board hiring is reverting to old patterns of “women roles”.

After years of steep increases, women’s representation on DAX 40 management boards is stagnating

For the first time, women management board members in the DAX 40 left their positions at the same rate as new women were appointed in 2023. In consequence, the overall share of women on these boards has stagnated at 23%, after seeing historic increases in prior years to meet the requirements of the 2022 Second Leadership Positions Act (FüPoG II). The act requires the management boards with four or more members in listed companies with a mandatory equal workers’ co-determination to include at least one member of the opposite gender.

Proportions of DAX female board members

^{Source: Russell Reynolds Associates Analysis 2024. Based on company communication and publicly available information | The DAX 30 was expanded into DAX 40 in 2021.}

The data suggests that, now that the FüPoG II Act requirements have been fulfilled, fewer women are being appointed into management board roles. In the six months prior to the act coming into force in August 2022, 33% of new DAX board positions went to women. In the following six months, this increased to an impressive 64%. During that period, for the first time ever, more women than men were appointed to management boards. However, in 2023, new women appointments dropped significantly to just 22%.

Gender proportions of newly appointed members of the management board during the study period

^{Source: Russell Reynolds Associates Analysis 2024. Based on company communication and publicly available information.}

Women management board members are leaving office much sooner than their male counterparts

In 2023, women were five times more likely than men to resign from DAX 40 management boards within the first three years of their term of office. Remarkably, 80% of women who resigned last year had been in their position for three years or less, compared to only 15% of men. While women board members had tenures of less than three years on average, the men who left their roles in 2023 had served for an average of eight years—a difference of more than five years.

The proportion of women who leave after a few years is much higher than that of men.

Dax 40 and MDAX: Length of stay of departing board members by gender in 2023.

^{Source: Russell Reynolds Associates Analysis 2024. Based on company communication and publicly available information.}

35% of the men resigning from boards did so for age considerations. Conversely, none of the women board members who left in 2023 did so for age considerations. They were, on average, six years younger than their male counterparts.

We are observing the same trend in management boards that we had seen before in supervisory boards: once companies have fulfilled new regulatory diversity requirements, fewer women are being appointed into board roles. The fact that seven of the nine departing women board members had only been in office for less than three years is also a significant setback.”

Jens-Thomas Pietralla,
Head of the European Board & CEO Advisory Partners at Russell Reynolds Associates

Management board hiring is reverting to old hiring patterns of “women roles”

In 2023, DAX 40 companies have also fallen back into old patterns when it comes to the distribution of management board roles. In the preceding years, we had seen more women being appointed to positions that included P&L responsibility, and fewer being appointed to previously women-dominated roles, such as HR. However, over half of the women newly appointed in 2023 were once again placed into HR roles.

Shares of roles in the executive boards of the indices by gender as of 1 January 2024

^{Source: Russell Reynolds Associates Analysis 2024. Based on company communication and publicly available information.}

For many women, a role in human resources, finance, or legal is their route to the management board. This often means they won’t have gained the operational experience managing a region or business unit with P&L responsibility which is typically needed to qualify for the role of CEO. Hence, the female talent pool for CEO roles remains limited. To break these patterns, companies need to invest more upfront and better prepare their future women leaders, particularly in P&L responsibilities.”

Dr Thomas Tomkos,
Head of the German Board & CEO Advisory Partners at Russell Reynolds Associates

Authors

Jens-Thomas Pietralla leads the firm's Board & CEO Advisory Partners in Europe and serves as Global Head of the Industrial & Natural Resources Sector. In this capacity, he leads the firm's business with clients in aerospace & defense, automotive, capital and electrical goods, chemicals, energy, and industrial services. Jens-Thomas helps companies build superior boards and advises his clients on leadership matters, succession planning, and strategy. Recent work includes searches for a number of CEO, CFO, and other CxO positions, as well as assignments for chairmen and non-executive directors at listed and private equity-owned companies around the globe.

Dr. Thomas Tomkos leads the German efforts for the Board & CEO Advisory Partners as well as the European CFO Practice. He is also involved in coordinating the firm's European family-owned companies activities and the European Aviation, Aerospace and Defense Practice. Thomas previously headed the firm's German operations and helped position Russell Reynolds Associates as a top leadership advisory firm in the country. He works closely with clients from various industries to recruit candidates for roles on executive, supervisory and advisory boards. Thomas specializes in a number of industrial areas, including the energy industry and renewable energies, transportation and infrastructure. He also works on management and executive audits and assessments and focuses on evaluating the effectiveness of supervisory and advisory boards. He is based in Hamburg.

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