Look who is legislating seats for women at the boardroom table

Eight years ago Norway became the first developed nation to legislate gender parity in the boardroom and the consensus now is that it has worked.
Today, women employees make up half or more of the corporate workplace but sit on only 14 per cent of the boards of directors in Canada, and on only 15 per cent in the U.S. (Reuters)

Ansgar Gabrielsen was not thinking about a global domino when, just three months into his job as Norway's trade and industry minister, he made the decision to legislate gender equality in the boardroom.

But today, eight years later, that is exactly what has happened and now many in the executive world are flocking to Oslo to learn about Norway's legislation and the impact it has had on business.

Thanks to the quota, 40 per cent of the directors of Norway's largest, publicly traded companies are women, up from a mere six per cent just four years ago.

Gabrielsen's argument was simple: change was happening at a snail's pace and something had to be done.

When he first proposed the legislation in 2002, women in Norway made up more than 70 per cent of the workforce but 76 per cent of companies had no women on their boards.

"This had to change," Gabrielsen recently told an international forum of business executives and politicians to discuss the Norwegian experience. "I always felt diversity was important for business.

"My goal was not to achieve gender equality, although that was a direct result. My thinking was that we had invested millions of dollars to educate our daughters, in fact 65 per cent of students in universities are women, and we were not using this significant resource.

"It didn't make sense. I really think you get the best ideas when men and women work together in equal numbers."

A ways to go

While this notion of combining the talents of men and women is gaining some currency in management circles, the conference was told that when it comes to the boardroom there is still much work to be done.  

The latest research from Catalyst, a non-profit organization that seeks to help women advance in business, offers a sobering global breakdown.

In Australia, 8.3 per cent of board members are women, while the corresponding figure in China is 7.2 per cent and in Japan, less than one.

French Finance Minster Christine Lagarde, seen here in a September 2010 photo outside the Elysee Palace, is a strong supporter of a boardroom quota law for France. But she says it shouldn't be forever. (Philippe Wojazer/Reuters)

In Canada, 14 per cent of board positions in the top 500 companies are held by women; 15.2 per cent in the U.S.

According to the European Professional Women's Network, the proportion of women on the boards of the 300 largest European companies has grown to just 11.7 per cent in 2010 up from eight per cent in 2004.

At the current rate of growth, parity could be reached in 16 years — too long for those who are looking to Norway as a guide.

In fact, Spain and the Netherlands have passed similar quotas, with a deadline for compliance of 2015. Iceland is aiming for 2013 for companies with 50 or more employees.

Belgium, Britain, Germany and Sweden are considering legislation. And the debate has begun in Australia, as well.

France, which ranks 46th on the World Economic Forum's 2010 Gender Equality Report, trailing Canada, the U.S. and most of Europe, is currently in the midst of enacting quota legislation and, perhaps not surprisingly, there is little opposition.

"The general public is in favour of this," says Anne Bouverot, a senior executive at France Telecom Orange. "The financial crisis has helped. People feel there is something wrong with corporate governance and it is time for a change."

Indeed, the French legislation could be passed any day now. Companies will have three years to achieve 20 per cent female representation on their boards and six years to get to Norway's aggressive 40 per cent quota.

In Canada, only Quebec has legislated gender parity for the boards of its Crown corporations and is on track to have 50 per cent female representation by December 2011.

Elsewhere, Liberal Senator Céline Hervieux-Payette  introduced a private member's bill in June 2009 calling for gender parity on the boards of federally-controlled public companies. But it does not appear to have picked up much traction.

Widen the search

Norway, it should be noted, has long been concerned with gender equality and, in fact, introduced voluntary quotas as far back as the 1970s to boost the number of women in politics.

Elin Hurvenes, founder of Professional Boards Forum, who organized the Oslo event called Board Impact Conference about the Norwegion experience, introduces Trade and Industry Minister Trond Giske. (Courtesy Board Impact Conference)

It worked. Today, five of the seven political parties here are led by women. The minister of gender equality is a man who is preparing to take a four-month parental leave to care for his daughter and the minister of defence is a woman.

Still, the boardroom quota created a nationwide uproar when it was proposed in 2002. Many CEOs were loudly against it, arguing there were not enough qualified women to fill the quota. (Similar arguments were heard in Quebec in 2006.)

Many women, young women in particular, were also opposed. They did not want to be seen as not having earned their place at the table.

Mai-Lill Ibsen, a former CEO of Citibank Norway and a member of several corporate boards was one of those women.

"I was not in favour of quotas or the law because it smacks of discrimination and it limits the shareholders' rights to govern their companies," she told the Board Impact Conference in Oslo.

"That said, I have been the lone woman on boards characterized by men past their prime for many years. I certainly wanted more diversity because diversity adds value but I wanted it to happen naturally."

Now that the legislation, passed in 2003, has been fully implemented and integrated-state-owned companies had to comply by 2006 and publicly listed companies had until 2008 or risk being de-listed-the quota has been accepted and applauded.

"What we have seen is that it is not even a discussion any more," says Ibsen. "I am still for the carrot, not the stick, but I cannot fault the state for trying to make this happen faster."

Not surprisingly, she noted, it was not difficult to find qualified women. The quota merely forced corporate committees to widen their search.