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

| Text and photo: Björn Lindahl

Eight years after Norway introduced the law on gender equality in boardrooms, there are zero female CEOs in the country’s 60 largest companies. Mari Teigen and other researchers have written a book about why the boardroom quota system has had such a small “contagious” 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.

Mari TeigenBut 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: 

Svein Rennemo“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 (%)

 Graph, women in boardrooms

 

 

The discussion continued

after the launch of ‘The female quota’s effect on Norwegian business’. Mari Teigen (left in the picture above) is the book’s editor. Svein Rennemo is chair of the board at Statoil, while Turid Solvang heads the Institute of Directors.

Some results from the book:

The researchers are busting some myths created by the Norwegian quota legislation, including that only a few women got all the board seats. There are fewer so-called golden skirts (experienced executive women who after the legislation were in high demand) now.

In 2008 women had no more than ten board seats each, while no men had more than seven. In 2013 that number had fallen to six seats for women and five for men. 

In 2013 women had 2.46 board seats on average, while men had 2.25.

Since 2008 the number of board seats covered by the quota law has fallen dramatically. When the law was introduced there were 452 public limited companies (ASA). In 2013 there were only 257, since many companies had changed their company type. The number of board seats dropped from 2,366 in 2008 to 1,423 in 2013.

Managing the work-life balance is a greater challenge for female bosses than for male ones. 88 percent of male bosses say they have a partner with a less demanding job, compared to 60 percent of the female respondents.

 

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The book is published by Gyldendal Akademisk.

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