Fact Sheet: The legislation on representation of both sexes in boards

Published under: Stoltenberg's 2nd Government

Publisher Ministry of Trade and Industry

Norwegian legislation secures gender balance in boards in public limited companies. The requirement of the gender representation law is that both sexes shall be represented on company boards by 40 per cent.

Norwegian legislation secures gender balance in boards in public limited companies. The requirement of the gender representation law is that both sexes shall be represented on company boards by 40 per cent.

In Norway, a high number of women are employed. Three out of five students in universities and colleges are women. However, over the past years, the number of women on company boards has remained relatively small. In 1993, only 3 per cent of the public limited company (PLC) board members were women. In 2003, the equal number was approximately 7 per cent. The Parliament therefore passed a law on gender balance. At present all public limited companies fulfill the rules, thus, 40 per cent of the board members are women.

The rules regarding representation in public limited companies entered into force on January 1, 2006. According to the act, both sexes must be represented in board of directors by approximately 40 per cent. Companies registered before this date, were given an additional two years until January 1, 2008 to comply with the law. After that, the rules regarding gender balance have been enforced through the normal control routines followed by The Register of Business Enterprises. There are no similar regulations for privately owned limited liability companies.

If a company board’s composition does not meet the statutory requirements, registration will be denied by The Register of Business Enterprises. According to the Public Limited Companies Act, companies which do not fulfil the requirements shall be dissolved by Court order, following a liquidation process. No such processes have been carried out.

The legislation on representation of both sexes in boards similarly applies for all state-owned enterprises, inter-municipal companies, large co-operatives and private limited companies where municipalities own 2/3 or more of the shares.

The quota rules created heated discussions in the media and in the general public at the time of enforcement, but the discussions have to a large extent evaporated.

The Norwegian quota rules raise significant interest around the world. Several countries have enforced, or are considering enforcing, similar legislation.

See also article in Financial Times with an interview with State Secretary Rikke Lind.