Women board members recruited same way as men

A 2010 Norwegian research report examines how women are being recruited to corporate boards, following the introduction of a statutory quota regulating the composition of company boards. The survey finds few systematic variations between women and men when it comes to their educational background and attitudes towards actively engaging in board work. Women are mainly recruited through professional networks rather than family networks or recruitment/consultancy firms.

In 2005, the Norwegian parliament passed a law requiring both genders to be represented by at least 40% on the boards of all public limited companies (NO0602102F). The reform involves more than 400 companies, many of which are large listed companies. The legal change meant many companies were forced to start recruiting more women.

In the autumn of 2009, the Institute for Social Research carried out a survey among all board members in affected companies (Rekrutteringsmønstre, erfaringer og holdninger til styrearbeid blant ASA-selskapenes styrerepresentanter; see also the article Rekruttering til ASA-styrer etter innføring av kvoteringsregelen). Among the topics touched on in the survey were the way in which members are recruited, how they assess their boardroom skills and the experiences gained from their work on a board.

About the board members

The survey shows that female board members are on average younger than male members. The average female member is also more highly educated than the average male; however the majority of board members, whatever their gender, have higher education.

Men and women do not differ with regard to the type of education they have had; economic and technical subjects predominate among both sexes. The men had on average served for longer than the women on their boards at the time of the survey.

How board members are recruited

A majority of respondents (seven out of 10 of both men and women) state that they were recruited onto the company board through a professional network, such as by other board members or work colleagues. Few claim to be recruited through family or friend networks. Moreover, only a small number of members claim to be recruited through a specialised recruitment firm or database, even though several such databases were created as tools to facilitate the recruitment of women. A substantially larger number of men than women have ownership interests, or represent such interests, in the companies they serve as board members. Thus, the picture being drawn up suggests that women are more likely than men to be recruited from outside the company.

Varied attitudes to board work

Women and men share more or less the same views as to what should be the primary responsibilities of a public limited company board. One exception to this rule is the fact that women more often than men emphasise the importance of ensuring company compliance with laws and regulations. This being said, however, women do not show a greater propensity to stress the importance of ensuring that companies take social responsibility or secure jobs.

One issue raised in connection with the reform of board representation was the extent to which the legal obligation to recruit more women means that the new female members will acquire a different status than existing board members. No differences could be identified in the survey between women and men as to how they view their status on the board, whether they believe board matters had been settled before a board meeting or whether information was being withheld.

Effects of the reform

The majority of men on company boards argue that the reform has had no noticeable effect on the work of the board, and the proportion of members claiming to have seen a positive effect (12%) is around the same as those claiming to have seen a negative effect (11%). Among women, the majority emphasise the positive effects of the reform, and only 1% argue that it has made the work of the board more difficult. Among the positive effects highlighted are new perspectives coming forth and an increase in dialogue and discussions.

The most noticeable negative aspect of the reform, according to the 11% claiming to have seen negative effects, is that the new board members lack important knowledge and competencies necessary for their position, indicating that these respondents believe the reform forced companies to recruit women without the necessary qualifications.

Conclusions

The study concludes that there are only small differences with regard to male and female board members’ educational background and attitudes towards board work. The study further concludes that companies are recruiting new members as before, by using the companies’ and owners’ own networks. Finally, there were concerns prior to the reform that it would be difficult to find enough competent women to fill board seats since a substantial number of new female board members had to be found. This problem seems to have been resolved without the use of specialised recruitment firms or recruitment within owners’ families.

Kristine Nergaard, Fafo

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