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Europe

New Law in Norway Gives Businesswomen a Boost

Thanks to a new quota law, Norwegian businesswomen are in greater demand than ever on corporate boards. But do they need the help?

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Starting Jan. 1, Norway's female executives are getting a leg up

In Norway, a law came into effect on Jan. 1 mandating that at least 40 percent of the seats on the boards of Norway's publicly listed companies must be held by women. The new center-left government is threatening to dissolve any company that doesn't comply.

Already in Norway, all employers have a duty to actively promote gender equality and to report annually on how they do it. However, the former center-right government decided to go further and proposed legislation to ensure more equality in positions at the very top.

The Confederation of Norwegian Enterprise, an umbrella organization for the country's employers, say they have been working to increase female board representation ever since the law was proposed. Among the group's members, the percentage of women on corporate boards has risen from 6 to 21 percent in the past three years.

Bleak picture in EU

Elsewhere in Europe, women have had little success reaching the upper echelons of business. According to 1999 data from the International Labor Organization, only 5.1 percent of executive management positions in the top 500 US companies were held by women, whereas in France this number was 4.7 percent, compared to 3.6 percent in Britain and just three percent in Germany.

The ranks get even thinner when it comes to board seats.

Karin Dorrepaal

Karin Dorrepaal, member of Schering's board

Karin Dorrepaal recently made waves when she was elected to the board of German pharmaceutical firm Schering, the first woman on the board of one of Germany's 30 biggest companies.

No flood of corporate female appointments has followed, however, and none is expected. Neither Germany nor the European Union is expected to pass a quota regulation like Norway's anytime soon, opting instead for government directives and a push for something called "gender mainstreaming."

Yet in Germany, the only place women have had success nearly equal to men is in politics -- a change that many say can be directly traced to the implementation of a quota system that went into effect in the 1980s.

Die CDU-Vorsitzende und designierte Bundeskanzlerin Angela Merkel laechlt am 12. November 2005 in Berlin

Quotas didn't hurt Merkel's chances of making it to the top

Today, Germany boasts a female chancellor. And Norway -- which is not an EU member state -- is undertaking a unique experiment.

Karita Bekkemellem, Norway's minister responsible for gender equality, said she believes such a law is the only way forward.


Serious consequences

"Women in Norway have a good education, they can go in to do a very good job, and this will be very important for the decisions companies in Norway make in the future," Bekkemellem said.

Some business representatives have said they find it hard to believe the law will be strictly enforced, i.e., that companies will actually be dissolved in the case of noncompliance.

But Bekkemellem said the government sees the issue as a "serious question."

A question of competence

Under the new laws, the listed companies would have up to four years to comply.

Meanwhile, the Confederation of Norwegian Enterprise has come out against the law. But Sigrun Vageng, responsible for labor politics at the confederation, admits the politicians have at least set the ball rolling when it comes to long-term change.

Bohrinsel Troll in der Nordsee

The male-dominated oil industry is a large part of Norway's economy

"I think the discussion started by the politicians was important, I have to give them that," Vageng said.

"I think one of the reasons we have been successful up until now is that Norwegian companies see that this is not a question of being man or woman, it's a question of competence," she said.

Part of the problem is Norway's size, said Elin Orjaseter, a leading Norwegian headhunter. In her experience, top companies in a country of only 4.5 million people can't afford to take gender into account if they want to stay in competition.

"I don't think the government really knows how to put together a really good board," Orjaseter said.

Should other groups be included?

Not only does she oppose the law, she is against the very idea of gender quotas, and questions the idea diversity quotas are meant to promote.

"White Norwegian, heterosexual women are one of the big majorities in Norwegian work life, Orjaseter said. "So if diversity was a point, I think other groups are more important to have on the boards. Why not homosexuals, ethnic minorities, why not Muslims? Why us big, wealthy, white Norwegian women?"

In Norway, the male-dominated oil industry is a mainstay of the country's robust economy, and its representatives are resistant to the new law.

"I would not like to see women coming into my board where there is a clear suspicion they are there because of a legal framework and not because of their competence," said Eivind Reiten, CEO of Norway's second largest oil-producing company, Norsk Hydro.

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