Women not embarrassed by quota law

By Siri Lindstad

Siri Fürst works as a strategy and business development specialist at the company Considium Consulting Group Ltd. In addition, she is one of the still small, but steadily growing number of women who serve on the boards of public joint stock companies.

And she is a supporter of the law which since 1 January 2008 stipulates that all public joint stock companies must have a board consisting of at least 40 per cent of each gender.

“If the law hadn’t been introduced, we would never have reached the targets that all agree are important to reach,” says Fürst. She has long and varied experience from both small and large companies, as manager and board member. At the moment, she is on the board of, among others, Pronova BioPharma ASA.

Produces more qualified candidates

Her most important argument for the benefit of there being more women on corporate boards is that this will result in many more qualified candidates to choose among.

The fact is that women might be on the boards of Norwegian companies based on the quota law, but they are not in the least embarrassed by it. On the contrary.

“Almost all the women I have spoken to, regardless of when they have been appointed board members, answer that they think they have been chosen to fill the quota. This is true also of those with long board experience, reaching back to the 1970s and 1980s. They think the company has considered it a positive thing for their profile to have a female board member. Many of those who have been appointed during the last two years think that they wouldn’t have been invited if the law hadn’t been in place. Of course, they themselves know that they are qualified,” says Vibeke Heidenreich. She is a postgraduate student at the Institute for Social Research in Oslo within the project Gender Quotas on Boards of Large Joint Stock Companies: Democracy vs. Inclusion? The project is headed by Mari Teigen and Fredrik Engelstad and runs for the period 2008–2011. For her part of the project, Vibeke Heidenreich interviews women who serve on the boards of public joint stock companies; both those who already were on a board before the law came into force, and those who were probably appointed as a consequence of it.

Nobody is exempt

One day the Norwegian public joint stock companies woke up to a new law requiring there to be a proportion of at least 40 per cent of each gender on their boards. Actually, the law had been in the making for some time and had been introduced gradually in the wake of a long political debate in the country. But nevertheless there were companies who started to prepare for action only in the autumn of 2007; from 1 January 2008 nobody was exempt. Women were now required to enter onto the boards.

This did indeed happen, and obviously without any major difficulties. Female board member candidates proved not to be that scarce; they had just not previously been in the field of vision of the recruiters.
“I have a hypothesis that the appointment committees now work much more systematically in finding board members, and this includes finding both men and women. Therefore I expect there to be a continued positive impact in that the entire process will become more systematic and professionalised,” says Heidenreich.

She describes the women she has interviewed as “very qualified”.
 “They are recruited in the same way as men, through professional networks, and only in exceptional cases by head hunting firms.”

Missing numbers

Mari Teigen thinks that the law will contribute to changing a field that has been extremely male dominated.
 “It’s very exciting to gradually explore in more detail what the effects of the law will be when it comes to the understanding within the world of business as to who handles power and who is to participate in decision making within this sector. When the debate on women in business started in the late 1990s, there weren’t even statistics available. And when the numbers appeared, they showed that women only formed some few per cent of the board members, and they were often female owners or partners in large family-owned companies.”

It must now be pointed out that the number of public joint stock companies has decreased since the law came into force.
 “At the beginning of the 21st century, there were over 600 public joint stock companies in Norway. Now, the number is just over 400. One can therefore speculate whether some of the companies who are not that interested in having women on their boards have reorganised as limited companies,” Vibeke Heidenreich points out.

The introduction of the quota law coincided with an amendment of the law on trading with financial instruments. Earlier, many companies who traded on stock markets had to be public joint stock companies. But when the Financial Supervisory Authority of Norway changed this rule, it also became possible for these companies to change into limited companies.

“The net effect is that many have re-registered. It is also possible that some new companies that previously would have established themselves as a public joint stock company, now choose the limited form, at least until they start planning a listing on the stock exchange,” says Heidenreich.

Large and important companies

400 companies might sound like a small number, compared to the over 200,000 limited companies that there are in Norway, and that are not affected by the quota law.
“But even if we’re not talking about that many companies, these public joint stock companies are the largest and most important within Norwegian trade and industry. In addition, the law covers all state, inter-municipal and municipal companies, and it recently came to also include cooperative companies,” Mari Teigen explai

Siri Fürst

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The women who already served on corporate boards when the law came into force, on the whole find that the law was a good thing, as it gives more competent women the opportunity they themselves have been given.

“But they don’t necessarily think that women contribute something else or something better than men, or that things would change for them when more women enter the board. Many of these women are used to operating in a male dominated environment and perhaps don’t think that much about gender issues in their everyday activities,” Vibeke Heidenreich says.

Siri Fürst, however, thinks that one advantage of having more women on the company board is that she is thus no longer categorised as the representative of a minority. Besides, it is simply nicer that there are more women.

“But otherwise women show as many internal differences as men do,” she emphasizes.

Better to be chair

So far, however, few corporate boards are chaired by women.

“I haven't explicitly asked the female board members whether they would like to be chair of the board. But there was one who said that once she was on a board, she might as well be the chair, since then she herself could set some of the premises for the work of the board. Things simply became more suitable for her,” Vibeke Heidenreich explains.

Siri Fürst, for her part, has declined many offers to serve on other boards than the ones she is currently a member of. The reason is that she feels that she has a better chance to influence the work of smaller companies.

“The work on the board is more rewarding when I feel that I have more power and influence. If a company has several thousand highly qualified employees, the board members will, in a way, never be able to exceed the sum of their competence. In small joint stock or limited companies, on the other hand, I feel that I get to use my own competencies much more actively.”

Siri Lindstad is a free lance journalist specilising in gender and gender policies.

The article was first published in NIKK magasin 3.2009 ©  NIKK