The threat of quotas

Governments in both Finland and in Sweden are pushing businesses to increase the number of women in their boardrooms, threatening to introduce quotas if nothing happens.    

One reason why women are so well represented in listed companies in Finland and Sweden is that the countries’ governments have decided there must be gender equality in state-owned companies - many of which are listed. This also increases pressure on other companies which have to answer to the public.

“The state can argue it has managed to find competent women, why haven’t you?,” says the Finnish Ombudsman for Equality Pirkko Mäkinen.

The Finnish Chamber of Commerce has also identified gender equality as a strategic goal. This summer the government will evaluate how successful the listed companies have been at finding women for their boards. Gender quotas will also be on the table.

Legislation if companies don’t change their attitude

The Swedish government has encouraged boardroom nomination committees at listed companies to go an extra mile this spring in order to find women. The Minister for Finance, Anders Borg (Conservatives) recently told Swedish Radio that he would introduce boardroom quota legislation within a couple of years if businesses didn’t show “a considerable change in attitude”.

Norway has led the way with quotas, and now all of the EU is heading that way too. In November the European Parliament approved the Commission’s bill to introduce 40 percent quotas for listed companies by 2020, but the bill must be approved by member countries. Last year only 17 percent of board members were women and only four percent of board directors.

The ball is now in Germany’s court and when Angela Merkel’s new government has agreed to quotas, the rest of the EU will find it hard to resist. Germany has decided the share of women in the country’s 120 companies with more than 2000 employees must be 30 percent by 2016. Other companies must identify binding goals to increase the number of women in top positions and on boards.

If enough member countries, two thirds, back the bill before the European elections in May, the quota bill will pass into law.

Sceptical Danes

The Danish government is against quotas and is also sceptical to the EU Commission’s bill. It has chosen to present its own model where 1,100 of the country’s largest companies themselves will identify goals for boardroom gender distribution. Sweden also protested against the Commission’s bill last year, but now the tide seems to have turned.

The UK has also been opposed to quotas, despite the fact that the British government has already decided women must make up at least 25 percent of boardrooms in the country’s 100 largest companies. Labour has now said it will introduce 30 percent quotas if they win the elections next year. Some businesses have jumped on the bandwagon, and recently Lloyds Bank decided women should fill at least 40 percent of the bank’s top positions by 2020.

According to the EU Commission’s database of men and women in decision making in Europe, Iceland and Norway top the list while Denmark is worst off among the Nordic countries, and finds itself near the middle of the EU statistics. The information is also available in a Commission report on gender and leadership.