Developments in women's representation on company boards

Since January 2004, publicly-owned companies in Norway must ensure that 40% of the members of their boards are women, while public limited companies must achieve this 40% quota voluntarily by the end of 2005 if they are to avoid having a legal obligation imposed on them. A study published in December 2004 found that female board representation in Norway is higher than in the other Nordic countries, but that there is still a long way to go before the target of 40% is reached.

On 1 December 2004, the Centre for Corporate Diversity (CCD) published a study on the representation of women at company board level and in management in the Nordic countries. It finds that the board-level representation of women in Norway is higher than in the other Nordic countries, but that there are fewer women in management positions than in Sweden and Iceland. Other studies carried out in the course of 2004 indicate similar developments. Although Norwegian companies are doing well in comparison with other countries, the proportion of women on company boards is still far from the objective of 40% set by the Norwegian government in 2003 (NO0306106F). To achieve this end, new regulations came into force in publicly-owned companies on 1 January 2004 (see below). In response to the new regulations, the Confederation of Norwegian Business and Industry (Næringslivets Hovedorganisasjon, NHO) has initiated a gender equality programme called 'Female Future', which is an attempt to speed up the process of getting more women onto the board and into management positions in Norwegian companies through education and networking.

Background

The issue of increasing board-level and management representation among women has been on the agenda for some time in Norway (NO9910157F, NO0003183F and NO0203104F). In June 2003, the government presented a proposal for legal change aimed at achieving 40% female representation on the boards of all public limited companies as well as fully state-owned companies by 2005 (NO0306106F). New regulations applicable only to publicly-owned companies (both state- and municipally-owned) came into force on 1 January 2004. For public limited companies, however, new rules will take effect only if they fail voluntarily to achieve 40% female board representation by the end of 2005. In the event of failure, they will have until 2007 to meet the requirements of the new regulations.

Developments in board-level representation of women

The CCD study, carried out among 500 Nordic companies, finds that Norway is top among the Nordic countries with regard to the proportion of female board members, with 21.6% of all board members being women in the 97 largest Norwegian companies. There is however a significant gap between the proportion of female board members and the proportion of management positions filled by women, which is 12.4%. The findings of the CCD reports are also reflected in a survey carried out by the European Professional Women’s Network, in which Norway ranks top in Europe with regards to the proportion of women on company boards. The Norwegian-based oil company, Statoil, scores high in both these studies, with women making up 44% on its board.

In late November 2004, the Centre for Gender Equality (Likestillingssentret) published its annual update on gender equality developments in Norway. The Centre collects its data from a variety of statistical sources. The figures on board-level representation indicate that the number of female board representatives in the 235 companies listed on the Norwegian stock exchange (Oslo Børs) increased from 10% in 2003 to 13% in 2004. A small majority of these companies (51%) lack any female representation at all, but this is also an improvement compared with 2003 when 59% of companies had no female representatives on their boards. These findings are similar to those in a previous 2004 CCD study of a larger group (489) of Norwegian public limited companies, in which only 11% of board members were found to be women. The difference between the two groups of studies reflects the differences in the two sample selections used, one containing a large number of companies of different sizes, and the other involving only the largest Norwegian companies, many of which are state-owned.

The figures above suggest that there are significant differences depending on the size of companies. Statistics Norway (Statistisk Sentralbyrå, SSB) published average figures for 2003 in December 2004. It found female board representation in 2003 to be around 17% in large public limited companies (with 100 or more employees), while representation in smaller companies with fewer than 100 employees was below 10%. In companies with 50-99 employees 11.5% of board members were women, and in companies with fewer than 49 employees the female proportion was below 7%. Furthermore, female representation is also dependent on ownership. It is high in companies that are fully owned by the state. Figures from the Ministry of Trade and Industry show that companies fully owned by the state met or surpassed the 40% quota requirement as early as in mid-2003. In companies in which the state has only partial ownership, female representation on company boards is more in line with private and public limited companies.

NHO's 'Female Future'

In 2003 NHO initiated a gender equality programme entitled Female Future. The main objective of this programme is to educate and increase the number of female board representatives (as well as managers) in Norwegian public and private limited companies by 2005. Through participation in this programme, member companies of NHO commit themselves to identifying and nominating potential female candidates to a board member network administered by NHO, and to appointing at least one female board member or manager from this network within a period of one to two years. The objectives of the programme are to be met through competence development, improving women’s 'visibility', and creating meeting places for women in NHO companies. To this end, NHO provides various seminars, courses and training on board and management responsibility, and runs and administers a database of female board and management candidates. Female Future has so far 'educated' three groups of approximately 160 women candidates, most of whom have been drawn from the largest companies in Norway. Among the participating companies are Statoil, Norsk Hydro and Aker Kværner ASA. The programme will run until spring 2005.

Commentary

The figures presented above clearly indicate that although Norwegian companies are doing well in a European comparison, they are nevertheless struggling to reach the target of a 40% female proportion of company board members. Publicly-owned companies and the largest public limited companies have reached the target, but there still is a substantial number of small and medium-sized companies that are lagging behind. Thus the main challenge lies in small and medium-sized companies, which may well trigger the application of a legal quota for public limited companies. The Gender Equality Centre estimates that if Norwegian companies are to meet the targets set by the new regulations, 740 male board members will have to concede their seats to female colleagues by 2005. It thus encourages more companies to follow the example of NHO's Female Future programme by identifying potential female board candidates within their ranks and directing efforts at appointing more women to their boards. (Håvard Lismoen, FAFO Institute for Applied Social Science)