Norway led the way back in 2003. Italy, France, Spain, Belgium, Iceland and even Dubai have since followed suit. Now it looks like Europe's largest economy is also going where British business fears to tread – imposing quotas on companies forcing them to increase the number of women in their boardrooms.

On Monday, the two parties most likely to form the next German government reached a compromise over the so-called Frauenquote, or women's quota. As of 2016, companies registered on the German stock exchange will be required to have at least 30% women on their supervisory boards. In addition, large firms will have to define and make public their plans for elevating more women into top executive roles.

Until recently, Angela Merkel's CDU party had successfully managed to swat away attempts to introduce a boardroom gender quota. In April this year and back in 2011, the Bundestag rejected proposals put forward by the Social Democrats and Greens. Even as recently as July, Germany joined Britain and seven other countries in voting against the European commission's proposal for a compulsory boardroom quota.

But with the Free Liberal party failing to get into parliament at the general elections in September, the political resistance against a mandatory quota system has largely collapsed and on Monday Manuela Schwesig, who has been leading the coalition talks on the issue, described the agreement as "an important signal to improve the chances of women in the workplace".

In its manifesto, Merkel's party had only called for a quota after 2020 but Annette Widmann-Mauz, the CDU negotiator, said the main reason for the change of heart had been a "culture shift within companies".

For German companies, meeting a 30% quota will involve nothing less than major management upheaval. Unlike Britain and the US, Germany has a two-tier board system, which distinguishes between non-executive supervisory boards – part-time outside advisers – and full-time executive boards, which manage the company day-to-day.

On the supervisory boards of German companies, 22% of supervisors at the 30 companies that make up the Dax 30 of German's biggest companies are female – compared with 24% of non-executive directors in Britain's FTSE 100.

But in terms of executive directors, Germany is well ahead of Britain. Nearly 12% of executive board positions are held by women, compared with just 6% in the UK.

Marion Weckes, of the Hans Böckler Foundation, hailed the outcome of the coalition's negotiations as a major step for equal opportunities. "If we want to get more women into top roles, we have to start somewhere. Introducing a quota for supervisory boards is as easy as it gets: for management, you'll need specialists, but for supervisory boards, you can recruit women from anywhere in society. It's a no-brainer".

Nonetheless, the business world has greeted the proposals with scepticism. Germany's car industry is leading the opposition. The bosses of the country's four biggest car manufacturers – Volkswagen, BMW, Daimler and Opel – have threatened to move production out of Germany if they are forced to introduce the quota.

In an interview with Bild am Sonntag, Daimler's chairman, Dieter Zetsche, suggested that being forced to bring in more women would be a dangerous step for the company: "If conditions in Germany deteriorate, we'll have to think about moving production elsewhere." Daimler, which owns the Mercedes-Benz marque, has been one of the slowest firms to appoint women to its eight-person board, appointing its first ever woman, a legal affairs specialist, in 2011.

The company, founded by Gottlieb Daimler in a small town near Stuttgart in 1890, has previously admitted it might be "too German" to succeed on the world stage and needed to hire more women and more foreigners.

The situation at Volkswagen illustrates the challenge a quota could pose for the car industry: with only three women currently on its supervisory board, it would have to at least double its number of female supervisors.

Wolfgang Schmitz of the employers' association said that "a quota merely treats the symptoms, not the causes of the low representation of women in leading roles".

"It should be up to the state, not businesses, to create the right conditions. Instead of wading in with statutory requirements, the government should concentrate on improving infrastructures: more nursery places and all-day schools. We need chances, not quotas."

But some German firms welcomed the quota proposal. Communications company Deutsche Telekom had already announced in 2010 that it would aim to achieve a 30% quota across senior and middle management by 2015. "The latest political developments show that no modern company can avoid addressing the quota issue," Telekom spokesman Christian Schwolow told the Guardian.

"But the risk of concentrating a quota solely on the boardroom risks making it a purely symbolical act. What is needed is systematic support for female workers even at junior recruitment level." Telekom's current percentage of female managers is 24%, up from 19% in 2010.