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BERLIN (Reuters) - Chancellor Angela Merkel's coalition parties agreed on Tuesday to a draft law that would force Germany's leading listed companies to allocate 30 percent of the seats on non-executive boards to women from 2016 onward.
Although Europe's biggest economy has a female leader and roughly 40 percent of the cabinet is female, women still are under-represented in business life.
Among the 30 largest companies on Germany's blue-chip DAX index, women occupied only 7 percent of executive board seats and barely 25 percent of supervisory board seats by the end of June, according to the DIW economic think-tank.
The draft law agreed late on Tuesday by senior members of Merkel's three-party "grand coalition" would apply to listed companies which have employee representation on their supervisory boards, affecting more than 100 firms.
A further 3,500 medium-sized companies would have to determine their own quota for executive and supervisory board seats, party officials said. The cabinet is expected to pass the gender law next month.
Although the issue is divisive among conservative voters, Merkel, who has in the past resisted legal quotas, now backs the idea that was pushed by the Social Democrats, her junior partner.
The move has sparked criticism not only from right-wing conservative circles, but also the leading BDI industry association. "We absolutely do not need any kind of legal quotas," BDI head Ulrich Grillo said.
In 2003, Norway became the first country in the world to impose a gender quota requiring at least 40 percent of public limited company board members to be women.
Other countries, including France, Spain and the Netherlands, have followed with similar requirements.
In Sweden, the new government wants to introduce quotas to bring more women onto company boards if businesses don't act themselves during the next two years.
Reporting by Michael Nienaber; Editing by Diane Craft