Historical archive

Global Roundtable on Board Diversity

Historical archive

Published under: Stoltenberg's 2nd Government

Publisher Ministry of Children, Equality and Social Inclusion

An overview of the Gender quotation on company boards in Norway

Speach held 26th of March 2010. At International Finance Corporation (IFC), (Verdensbanken), Washington D.C., USA

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Mr/madam chair
Ladies and gentlemen

Thank you for the invitation to speak in your forum today. I have been encouraged to give an overview of the Gender quotation on company boards in Norway.

 

However; let me start with underlining the importance of gender equality as a prerequisite and key factor for economic growth!

My main point here today is that:

If we neglect the need to empower women;
We pay for that neglect by weakening our countries economic performance.

So simple, and yet so complex.

About a month ago, I participated at the UN Commission on the Status of Women (CSW) in NY. 

The UN facts and figures state it clearly: Countries which suppress - or doesn’t include girls and women - are lagging behind. These countries are slowing down their development. They will continue to do so until they unleash and support the talent and potential of girls and women - and back such policy change with adequate funding.

The cost of gender inequality for national economies is not only indecent and wrongful towards the girls and women of the world – it’s simply not smart economics!
 
Through improvement of health, access to education, absence of violence, and changed attitudes among boys and men, will girls and women all over the world have the opportunity to gain real economic rights.
We have strong indications showing that gender equality gives economic growth and prosperity. Women’s employment boosts the GDP.
I believe (one of) the most important political output we have developed in Norway is our welfare society. This is not only a question of having sufficient financial resources available. We became prosperous because we developed the welfare society.

The welfare society was crucial for women`s liberation and gender equality for two reasons: The welfare sector-jobs provided a lot of opportunities for women from the 1960`s and further on; moving women from the informal economy (home-making, agriculture etc) to the formal economy.
In addition public services made it possible for most women to combine labour market participation with family responsibilities.

This can only bee achieved if governments, in collaboration with the employer’s organisations and the employees organisations, agree upon designing enabling structures and reforms.

Structures which allow women - and men alike - to chose to have family and children combined with professional lives and incomes.

Norwegian politics since the fifties, have been to pave the way for making able women and girls visible in the labour market and to be eligible to high positions in the economy and decision-making processes.

Headwords are:
• Greatly extended and improved parental leave rules and benefits.
• Flexibility in work-life when having young children
• A rapid increase in kindergardens and day-care centers

Norway “invented” the father’s quota in 1993. Our parental leave scheme reserves today 10 weeks for the obligatory, nontransferable father’s quota. 90 per cent of the fathers make use of their right to the father’s quota, and the Cabinet intends to expand the father’s quota to 14 weeks.

These strategies have given very good results. Norway is today one of the front runners (no. 3 in the world) with regard to the level of equality between women and men. 80 per cent of all women aged 25 to 66 are in the labour force.

Most mothers are in the labour force; approximately 75 per cent with children below 3 years and 84 per cent with children 3-6 years. In the US this number is a little lower, but common for mothers in both countries is that about half of them have some kind of part-time arrangement.
Norway has one of the highest birthrates (1,98 child per women) among the  industrialized countries.
This did not come by itself!

Societal change has to be led by profound political will aiming at empowering women and giving them more equal opportunity.

This points to one of the major differences between our two countries, as the Norwegian government believes that the right to choose should be facilitated by public policies.

The key is redistribution of power, care and work - and about changing attitudes among both men and women!

Our experience is that targeted and affirmative action and legislation in the field of gender equality is needed and lead to change.

The use of quotas is not a new measure in Norwegian policymaking. In fact one important measure in the development of gender equality has been the use of quotas.

The use of quotas is simply a tool to display women’s competences!

It started in the 1970-ties when some political parties on voluntary basis adopted quotas on the electoral lists. Today the gender balance is complete with the 50 – 50 per cent representation.

The Gender Equality Act has since 1981 contained a clause of at least 40 per cent of each gender to be represented in publicly appointed committees etc.

This leads down to our legal regulation – quota – of 40 per cent of the underrepresented gender in 4 types of companies. The most famous being the large Public Limited Companies (PLCs), (which often are noted on the stock exchange).

Let me point out a rather striking picture in this regard:
In 2003 Public Limited Companies (PLC) recruited only 7 per cent women to their boardrooms. Competent women were not seen – not recruited. Today women have taken 40 per cent of the boardroom positions in the companies affected by the regulation.

This is the result of our law adopted by a large majority in the Parliament and introduced in 2003, making it mandatory for all State owned companies, (the inter-municipal companies) and the Public Limited Companies to have at least 40 per cent of both genders in company boards. That is companies with a broad spread of shares or are owned by the state or the municipalities.

The companies affected by the law are the largest companies. The law do not affect privately owned limited companies (SMEs). Most of these are small and medium sized family enterprises. 

Let me clarify that these rules do not deal with management positions in the sense of the daily run of the business. They regulate the appointment and assignment of representatives to company boards and as such they refer to the overall strategic decision-making of enterprises.


Thus these are appointments to positions of trust. In other words we do not have quotas for management positions or any positions.

We believe that talents are equally distributed between men and women. A majority of university graduates are women, and increasingly also from business schools. 

By introducing the quota-legislation, Norway was the first country in the world to demand gender balance on company boards.

We did this because we wanted a change in the numbers – and we took political decisions to make it happen. We did not shy away from measures interfering in the market. 
And mind you, this was proposed by a conservative cabinet – and endorsed by the opposition (which is now in Cabinet). It was truly bi-partisan!
The political deliberation of introducing the quota legislation was controversial and was heavily debated in the public. The Business Confederations strongly disagreed.
In fact; the enforcement of the law was postponed due to expectation that these companies would follow suit voluntarily, with the Parliamentary decision setting a norm, but not being legally binding.
Thus, the private business sector was given a time limit until 2005 to achieve the desired gender balance. However the figures stated that the development went to slow: thus the law came into full force in 2008, after a 2 years transition period for the PLCs.

No new laws regarding enforcement have been passed. The rules are enforced through the normal control routines and legal systems (since 1977). We have a National Business Register that investigates all companies as to how a board is set up.

A company will not be able to operate if its composition does not meet the requirements. In fact, it may be dissolved by the court – but this has not happened, yet.

The legislation is a forceful measure, but it has gone hand in hand with other instruments. Both the main business federation and the financial sector have developed programmes and networks to train and recruit talented women. And women’s competence has become more visible through databases and these networking platforms

Let me mention some arguments that have very often been used by the business community (in fact both by women and men):

• Are women actually elected to  boards in their professional capacity or simply just because they are women?  Of course they are elected on the basis of competence!

• Further; is it right to oblige company share-holders on whom they should recruit as board members? The system in Norway for PLCs is that the General Assembly (all share-holders) appoints a nomination committee that recruit good and able persons to a list that the General Assembly then can elect from.

The CEO of the PLC is not member of the board, but the board has to have members from the employees as well (legal since 30 years back).

• Are qualified women hard to find? Not if one looks further behind the old boy’s network.  The law has succeeded in forcing the nominating committees to cast their nets wider. Women were an untapped pool of talent!

• Will women take on such responsibilities? Of course; if one gives them the possibilities!

Today, the critics have gone silent and highly competent women have taken their righteous seats at the boardroom tables. International research shows that women in company boardrooms correlate with company performances.

Recent statistics also prove more women in management positions and in boards not covered by the law. Being on a board is a stamp of approval, they are visible and they have contacts - and as a result of this; offers of management position follows.

By this law gender equity in the business sector was put on the agenda and up for public debate – bringing in new perspectives and new stakeholders. Today women are more visible in corporate Norway than ever.

Still, it is of course important to keep in mind that any affirmative action is likely to fall through without a more or less gender equal society where women and girls are educated and working on equal footing as men.

This is about democracy and equal rights of participation in the society. It is a redistribution of power! But moreover, it is also about using Gender Equality as a catalyst for rethinking corporate and commercial decision-making!

Employing all available human capital is simply good for business!

We will continue our efforts to increase the level of gender equality which will:
- Give more freedom to everyone of us
- And improve our economy and our welfare.

Thank you.