Where women man the boards

by on November 24, 2008  •  In Uncategorized
The Guardian

…[A] controversial 2003 act requir[ed] Norwegian firms to increase the proportion of women on their boards to 44.2% by last January. The aim was to boost the number of women in top business jobs. The penalty for failure was drastic: if a company did not comply, it would be shut down.

The legislation has affected nearly 500 public limited companies, including 175 firms listed on the Oslo stock exchange. It unleashed an uproar in the Norwegian business community, with many protesting it was ridiculous to shut down a company just because it lacked a woman on the board. Others argued that the law infringed on the rights of shareholders to decide who they want as directors. But the threat worked, and company owners duly complied.

[As a result,] Norway boasts the highest proportion of women on boards anywhere in the world, up from 6% in 2001 to 44%. By comparison, in the UK 11.5% of FTSE 100 directors were female in 2007; the proportion among the US's Fortune 500 firms is 14.8%. Last week, an annual survey of gender equality around the world put Norway at the top of the list. The UK fell from 11th place to 13th.

The immediate impact of the law change in Norway has been a wealth of opportunities opening up for women, with company owners leading a frantic hunt to find suitable female candidates. "Since the law came, I have frequently been contacted by headhunters," says Mari Thjømøe, a 45-year-old executive who serves on six boards, four of them since 2006. "I've had five or six invitations to join boards [in 2007] and one or two the year before. I have definitely had a lot more opportunities and they have happened quicker, with the pressure [created by the law]."…

Thjømøe and Elka Sætersmoen agree that fresh blood makes for more competent boards. "Decisions are made in the room and not in pre-discussions among people who know each other privately," says Thjømøe, "and that is key because the board has a legal and financial responsibility."

She adds: "Selection committees have become more professional and look wider to find candidates. They are not just selecting the man sitting next to them, who looks exactly like them." But she also points out that this was already happening with the increased focus on corporate governance in recent years.

"The pool to choose candidates from is larger, so there are more opportunities to find good candidates," says Sætersmoen, adding that it is understandable why women had difficulties getting board positions. "When you pick a board member, you want someone you know and trust, so it has to be a person from your network. But for many, their networks don't include a lot of women."

Sætersmoen said the quota has enabled boards to monitor management more closely. "You are getting more independence as you are recruiting from a larger pool. It makes it easier for directors to ask the difficult questions that are necessary in critical situations."

The act prompted a raft of initiatives to boost female participation in business. The Confederation of Norwegian Enterprise set up a programme called Female Future, putting female candidates in touch with company owners and organising classes in board work.

"I wanted to learn how to be a board member," says one participant, Anne Cecilie Guneriussen, a 41-year-old business coordinator. "I see the law as an opportunity, perhaps the only way to get more women on boards. But at the beginning I was against it. Why should I get a position on a board just because I am a woman?"

Critics have argued that, as the recruitment was gender-driven, the law could prevent the most competent candidates from getting the jobs. Sætersmoen acknowledges this has happened in some cases. "Some companies have waited a very long time before doing something, instead of starting early and seeing it as an opportunity to look for the best possible talents," she says. "There are women who should not be on the boards, as there were men who should not have been on boards," she says. "But I think it will normalise over the long term."

Paradoxically, lack of experience has been an asset in some cases, according to Thjømøe. "New members have been preoccupied with doing things by the book and being very precise in their requirements and demands, not just trusting that everything is OK," she says. "Before, it was quite common for some directors to show up without preparing properly. That's over now."

Overall, the law has increased discussions on gender equality in business. The Norwegian press runs an annual top 100 of the most powerful women and now focuses more on gender equality issues, such as why there are only three female chief executives heading the country's listed companies.

"These initiatives have made women more visible and changed the views of women in business in general," Thjømøe says. "This law is taken for granted now."

But it has caused some unforeseen problems. "I serve on the board of the Oslo stock exchange and we've had difficulties in recruiting members recently," says Thjømøe with a smile. "We could not find enough men."

Women's place

Percentage of board seats held by women in 2008 in selected countries

Norway 44.2%

Sweden 26.9%

Finland 25.7%

Denmark 18.1%

United States (Fortune 500) 14.8%

Canada (FP500) 13%

The Netherlands 12.3%

United Kingdom 11.5%

Republic of Ireland 10.1%

Germany 7.8%

France 7.6%

Italy 2.1%

Portugal 0.8%

Sources: European Professional Women's Network, Catalyst

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