By Anne Winsnes Rødland
The former leader of the Norwegian Christian Democratic Party (Kristelig Folkeparti, KrF) was one of the most avid advocates for introducing the law on gender representation on the boards of public joint stock companies. In April 2008 she participated in a seminar on this theme at the Institute for Social Research in Oslo.
“I am proud of having participated in the creation of this law, particularly since I have been the leader of a party that once voted against the Gender Equality Act,” says Valgerd Svarstad Haugland, who is currently Church Warden in Oslo.
The law stipulating that the boards of all public limited companies must have at least a 40 per cent representation of both sexes was accepted by the Norwegian Parliament, Stortinget, in 2003. In 2002, the proportion of women on corporate boards amounted to only 6 per cent, but today all have reached 40 per cent.
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| Valgerd Svarstad Haugland. Photo: Håkon Mosvold Larsen/Scanpix |
Valgerd Svarstad Haugland emphasizes that quotas are simply a means to an end, not an end in themselves.
“Ruling techniques are still commonly used in many environments, and there are many ways of squeezing women out if they are in a minority,” she points out.
Finn Bergesen, Administrative Director of the Confederation of Norwegian Enterprise (NHO), also participated in the seminar. Even though he maintains a very positive attitude to women on company boards, he is not that pleased with the stipulations of the legislation.
“There are two basic things that are wrong with quotas. Firstly, people will ask whether the women are there because of their gender or because of their competence. Secondly, it’s not right to make decisions on behalf of the owners as to who they are to appoint to their board,” he thinks. Svarstad Haugland does not agree.
Controversial law
“We, who have been the subjects of quotas, are so because we are competent women, and we provide diversity. I would never have been elected party leader unless I had also had other qualities in addition to being a woman. Besides, such a high female representation on corporate boards would never have been achieved unless we had introduced this law. There are always competent men who get the jobs because they know somebody. Women possess a great deal of competence and education, which is lost to society unless it is actively taken into use. Since the business world failed to increase the proportion of women on the boards sufficiently by means of their own initiative, despite honeyed promises, we needed to employ more effective methods,” says Valgerd Svarstad Haugland. She does, however, underline that she hopes the law will become unnecessary in the long run.
The issue of a possible quota act was first raised many years ago. Such a law was, for example, suggested in connection with a hearing in 1999 on a revision of the Gender Equality Act. The suggestion for the current legislation was, however, presented by the Minister of Trade and Industry, Ansgar Gabrielsen (of the conservative party, Høyre), and the Minister of Gender Equality, Laila Dåvøy (Christian Democrats), at a press conference in 2002.
“A hundred Norwegian top managers were present at the conference, and there were many strong reactions to the suggestion. The sceptical ones – who formed a majority – clearly protested that this would entail extensive, negative consequences for the Oslo Stock Exchange and for the willingness of international capital to invest in Norway at all,” recalls researcher Marit Hoel. She is Director of the Center for Corporate Diversity and has closely followed the process towards achieving a proportion of 40 per cent of women on company boards. Each year she has published overviews of the situation on the boards and in the management structures of companies. From 2000 to 2003 she studied the 250 largest companies, but since then she has monitored all public limited companies.
Slow process
What was special about the parliamentary decision in 2003 was that it passed something as unusual as a conditional law. It would come into force on 1 January 2006, but only if the public limited companies had not managed to achieve a 40 per cent gender representation on their own.
“There was great resistance to such a law within the world of business, and they were strongly opposed to the threat of forced dissolution attached to it. Therefore one might have believed that the companies would have recruited women in time to avoid the law coming into force. Nevertheless, the annual development of the companies showed that progress was very slow. When the gender composition of the boards was calculated, as agreed, in the autumn 2005, the proportion of women amounted to only 17.8 per cent. Thus the matter was clear, and the Government had to put the law into force from the beginning of the following year,” Hoel recalls.
“Today, many business managers say that it would have been best if the companies had been able to increase the proportion of women on a voluntary basis, without the enforcement of the law. So it’s strange that the efforts weren’t greater during the years when they had the opportunity to prevent the law from coming into force,” Marit Hoel thinks.
Important measure
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| Photo: Berit Roald/Scanpix |
Bjørg Ven is a private lawyer and partner in the law firm Haavind Vislie. She has extensive experience of being on corporate boards, for example in Dagbladet, Norsk Vekst, Telenor, Orkla and Vital. She is also member of the elective committee for Yara.
“I don’t know whether there is any obvious difference between women and men on company boards, but I think having women present can contribute to a positive tone. And I don’t disagree with the idea that gender might have an influence on the market insight in smaller consumer-oriented companies,” says Ven.
“Regardless of this, I think the most important feature of this board reform was that we got greater diversity and more people to choose from. In addition, we now have a public debate and greater awareness of the demands on board members and what kind of competencies we want on the boards,” she adds.
As a female board member she has experienced a great deal of international interest in the Norwegian development.
“A Japanese female reporter visited me, and she was awestruck by how far we have come. The German, French and Dutch press have also shown great interest,” she says.
Enough women?
Bjørg Ven does not agree with those who claim that it is difficult to find enough competent women.
“Even if there are perhaps not that many, there are enough. I’ve also heard it being said that the new law opens the doors on the boards for young women with less experience and competence than that traditionally needed by men in order to become board members. So what? is my reaction to this. It forces these women to prove themselves and show that they can fill the role they have been offered. If they don’t manage that, they are simply replaced,” she points out.
Finn Bergesen, however, sees a risk in the recruitment of women:
“The Old Boys’ Network has to a certain extent been replaced by the Winning Women’s Club, and I think it’s impossible to do
a good job with a seat on 10 different boards,” he says.
“There are still many more men than women who are wholesalers in the board business. We should concern ourselves with that,” replies Svarstad Haugland.
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| Mari Teigen. Photo: Anne Winsnes Rødland |
Researcher Mari Teigen from the Institute for Social Research (ISF) finds it interesting how easy it was, after all, to find women for the boards.
“They just had to look for them in slightly different ways than those they were used to,” she says, referring to a recently finished master’s thesis by Aslak Hetland.
Teigen is director for the research group Gender and Society at ISF, and is also engaged in the new research project “Gender Quotas in Boards of Large Joint Stock Companies. Democracy vs. Inclusion?”, which is a joint project with the Department of Sociology at the University of Bergen and the Department of Economics at the Aarhus School of Business. It is divided into four sub-projects. One focuses on the recruitment to company boards and ways into the boards. Another sub-project analyses overlapping directorships, and the third one looks at the effects of the gender relations in board rooms. The fourth sub-project explores the connection between the composition of the board and the company’s profitability.
Unorthodox intervention
“Personally, I have been quite preoccupied by this issue, since I think it’s a very special question concerning gender equality policy. The government has introduced regulation into areas that earlier would have been unthinkable. I think it’s very interesting that there are no legislated quotas for Norwegian political parties, even if several of them have initiated quotas themselves. These same politicians have introduced legal restrictions on businesses, which they wouldn’t want for themselves,” Teigen points out.
She finds it exciting that this law has given gender researchers an entry into studying processes in business life.
“We now have access to an institutional culture towards which we have directed very little interest in the past. It will, for example, be fascinating to study mechanisms of inclusion and exclusion. Is the fact that there are so few women in top positions within the private sector in Norway due to women choosing other routes, or are they excluded? Studies show that women in leading positions in the private sector disappear into the public sector when they have children. Why is this the case?
Marit Hoel is working on an analysis of, among other things, the effects of the legal reform so far on the joint stock companies since it came into force in 2003. Before the analysis is finished, she finds it difficult to say anything on the consequences of the law for gender equality in Norway. She does, however, think that much depends on the choices the new women on the boards make and their strategies of “standing out/sticking together” or “blending in”.
Positive side effects?
“They must make some choices in respect of what they stand for and how clear they want to make it that they are on the board because of the interest of politicians. I think they hold various views on this. Some will want to focus on issues connected to the company’s gender equality policies, its accountability in the area and so on. Others will avoid this, not wanting it to seem that they are on the board partly because of their gender,” Hoel thinks.
Valgerd Svarstad Haugland hopes the law on gender representation on corporate boards will function as a lighthouse for smaller companies, and in general make way for alternative ways of thinking, so that changes will also happen in those firms not covered by the law.
“We must give women the self-confidence to dare take on both commissions of trust and top jobs. These things do not happen overnight,” she stresses.
Gender representation
- The legal stipulation that all public joint stock companies must have a representation of at least 40 per cent of each gender
on their boards came into force on 1 January 2006.
- The law was passed by the Stortinget as a conditional law in December 2003. This meant that the law would come into force
in case the public joint stock companies did not manage to reach the target of a 40 per cent gender representation by themselves
by the autumn of 2005.
- According to the law, all companies established and registered before 1 January 2006 must, within two years, have a board composed corresponding to the law. Companies established after the law entered into force, must have a legally composed board from the start.
- 395 public companies fulfilled the requirement at the time of counting in January 2008. 77 companies did not fulfil the demands,
and got their first warning for forced dissolution. In the end, all adjusted to the law, and no companies were forced to dissolve.
Anne Winsnes Rødland is a journalist and former Information Officer at NIKK.
This article has been published in NIKK magasin 1 2009 © NIKK
