On the one hand, this Act binds the private sector, meaning market-listed companies and companies with co-determination duties, and on the other hand, it binds the public sector.

Despite several appeals, calls, and companies’ voluntary agreements to increase the number of women in leadership positions, this number has stagnated throughout years, even though the percentage of qualified women in Germany has steadily increased in past years. Consequently, the Federal Government took the responsibility of regulating and improving upon this issue through this Act. This Act was passed with the purpose of significantly increasing the proportion of women in leadership positions.