File photo of German Chancellor Angela Merkel. (Associated Press)
Germany's biggest companies will have to fill 30 per cent of supervisory board positions with women candidates from 2016 under a law agreed late Tuesday by the country's ruling parties.
Enterprises that fail to find suitable female candidates for their board of directors will have to leave them vacant under a so-called "empty chair sanction".
"I'm sure that in the end no chair will remain empty because there are enough women who are qualified to do these very important jobs," Women's Affairs Minister Manuela Schwesig told public radio today.
"This law is an important step for equality because it will initiate cultural change in the workplace."
Chancellor Angela Merkel, who had initially opposed the reform, told parliament today: "It has been decided and it is coming. We can't afford to do without the skills of women."
The rule would apply to about 100 listed companies with employee representatives on the non-executive supervisory board, while another 3,500 enterprises will have to publish their gender-equality targets in coming years.
German Industries Federation chief Ulrich Grillo said businesses wanted more women in leadership positions but called a legal quota "counter-productive", adding: "I continue to prefer voluntary solutions".
Justice Minister Heiko Maas called the agreement a "historic decision" that would "make Germany a more modern country".
"The story that there aren't enough qualified women is for people who are mentally stuck in the past century," he said.
The quota for women was approved in principle last year by the two big parties in Germany's "grand coalition" government, Merkel's conservative Christian Democrats (CDU) and the centre-left Social Democrats (SPD).
However, they were only able to agree on all the details after late-night discussions involving Merkel and Vice Chancellor Sigmar Gabriel, whose SPD had made the women's quota one of its top priorities.
Several CDU lawmakers had long complained of excessive burdens on business and called for some sectors to be exempt.
Merkel's cabinet is due to sign off on the bill on December 11, after which parliamentary passage would be a formality given the grand coalition's overwhelming majority.