Norway’s female boardroom quotas: what has been the effect?

Boardroom gender quotas have been the subject of fierce debate in Norway in recent days. 

“You’d have thought it was the 8th of March [international women’s day],” said Minister of Children and Equality Solveig Horne from the Progress Party at the launch of the book  ‘The female quota’s effect on Norwegian business’, edited by Mari Teigen.

That was partly because the fact that no woman, not this time either, got the top job when some of Norway’s largest companies appointed new CEO’s — including Statoil, Telenor and Yara.

But it was also because many have strong views about the results which Mari Teigen and her colleagues have presented in their book. This is how Teigen explained the reasons why there are so few female bosses:

“Women tend to believe there is a problem with the industry. Men tend to think there is a problem with the women.”

The researches have sent a questionnaire to 127 companies and received answers from 404 top leaders, 114 women and 290 men. The difference in how they see the problem is not particularly big in any of the answers given.

71 percent of the female bosses believe the explanation is that not enough women apply for top jobs. 66 percent of the men think the same.

However, when asked whether recruitment to leadership positions happens through informal networks, in Norway known as the “Good Boy’s Club”, 54 percent of women answered yes, while only 26 percent of men did. 

The quota law’s limited effect could be explained by turning the causal connection on its head: board seats go to those who have operative experience from a company, not the other way around. 

But Svein Rennemo, chair of the board at Statoil, disagrees: 

“Stuffing boards with grumpy old CEOs is not a good model.”

Instead he highlighted another effect of the quota legislation: Choosing new boardroom members have become a more professional exercise. The quota legislation introduced stricter demands for the process of choosing boardroom members. 

“Norway should export the election committee model. These committees force through a professional process,” said Svein Rennemo.

Turid Solvang, Managing Director for the Norwegian Institute of Directors, had hoped to be able to discuss the actual work done by boards when the quota law had been well and truly introduced.

But the debate about the legislation, which says a minimum of 40 percent of each gender must be represented in public limited company boardrooms, as well as in state and municipal companies, has continued. Partly because it has become a model for so many other countries.

“Our starting point when we work with the composition of boards is not gender equality, but increased company profitability. It is obvious that you cannot measure the effect of the fact that there are more women in boardrooms,” she says.

The survey does however make it clear that a majority of women believe businesses would profit more if there was equality between the sexes both on boards and in company leadership positions. 58 percent of the women who answered agreed, but only 37 of the men did. 

The main result of the quota law is that there now is gender balance in at least some company boardrooms. The just over 200 public limited companies (ASA) are often big, but they are still only few. There are 250,000 private limited companies (AS) which the law does not cover in Norway. If you compare the development in boardrooms between the two different company models, one thing is very clear at least — with no legislation very little happens:

The number of women on boards in ASA and AS (%)