Norwegian Companies Required To Have Female Board Members
Norway is the first country in the world to have such a law. The Wall Street Journal assesses the practice in an article entitled Behind the Rush To Add Women To Norway’s Boards.
“The law is already reshaping Norwegian boardrooms. As of early December, women now occupy nearly 35% of the seats at the roughly 500 companies covered by the law, up from nearly 7% in 2002”, the paper writes.
Since the law was adopted in 2003, Norwegians have dramatically overtaken US women in company positions. The WSJ reports that in the U.S., women hold 14.8% of the board seats at the 500 largest companies.
Such rapid change is significant. Even though Norwegian women work out of the house in higher numbers than many other European countries, they’ve been relatively discriminated compared to men for decades. So how does the change into a way more sophisticated corporate set up impact the corporate landscape in Norway?
The direct effect is as yet unknown but some people believe corporate governance benefits. One corporate sector member interviewed by the WSJ says men do more homework before board meetings because they want to impress their female colleagues. “This is human nature,” he said.
For the time being, the Norwegians themselves have little time to wonder about sociology in the boardroom. Many companies are having real troubles finding appropriate women, it appears. The U.S. search firm Korn/Ferry International told the WSJ that finding board members of the female sex has been its bread and butter in the past two years. Nearly every assignment has involved a board member.
One outspoken critic cited is Trygve Hegnar, CEO and editor-in-chief of Hegnar Media. He complains that “some very good” members have been kicked off to make room for women who didn’t land the position on merit. He applied for board membership twice and twice women landed the job.
One direct effect of the new law has been that 30 companies have opted to go private. Another 80-100 companies haven’t made the deadline. Theoretically they could be facing closure.
Dag Terje Andersen, Norway’s minister of trade and industry, whose department monitors compliance, says companies with too few women in their boardroom on Jan. 1 “will have a lot of opportunities to use common sense” and add women. “I am quite optimistic we won’t come to” shutting companies, he told the WSJ.
Entry filed under: Green News.