Have Norway's Boardroom gender quotas skirted around the issue?

Have Norway's Boardroom gender quotas skirted around the issue?

In 2008, Norway took a stance against female under-representation on listed Boards, obliging companies to have at least 40% of their Director seats filled by women. However, ten years on the quota can only claim to have been a partial success.

Some Norwegian firms reacted to the Government’s plans by either delisting their Board or shrinking to increase representation. Furthermore, reporting in The Economist found that business attitudes towards promoting women to Boards, whether enforced by Government quotas (that come with sanctions) soft-law quotas or guidelines, were met with some protest.

A further report found that only seven per cent of the largest firms now have female bosses, after the quota was introduced.

A difficulty cited in the report for those tasked with hiring more women was that the pool of qualified females was too small, leading to the same few women being spread across Boards. This phenomenon was dubbed ‘golden skirts’, in which only a few women benefitted from the quota.

Furthermore, new Directors are often younger and have less experience, according to Lisa Barlow, Co-Lead at Executive Search firm Egon Zehnder’s Board Practise. An additional problem with quotas, is that, whilst they have improved representation at Board level, the Economist surmise that they have had no discernible benefit for women working at below Board level.

The expectation was that quotas would lead to better succession planning and drive more women into senior roles, to subsequently fill Director positions and close the gender pay gap. However, a study in Norway found that the quotas only benefit the wage gap between men and the ‘golden skirts.’

Yet, this doesn’t mean that the efforts of quotas are futile when attempting to tackle the diversity issue. In fact, the 30% Club, a UK campaign group on behalf of female representation in the Boardroom, is now pushing for more representation of women in management. Since they launched in 2010, representation figures in the UK now stand at 28.4%, up from 12.5%.

However, Brenda Trenowden, a senior City banker and Chairwoman of the 30% Club, said that many Chief Executives had been “cautious” about committing themselves to hiring more female executives. Some CEOs are “concerned that they will be regarded as ‘failing’ if they commit to the target, yet do not reach it by 2020,” said Trenowden.

She added: “We are not here to censure companies if they cannot reach the target, but we need them to understand the importance of making that first step in the right direction.”

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