This Seat Has Been Taken

In 2003, Norway introduced legislation which mandated all companies to fill the seats on their boards of directors with women by January 1, 2008. The law required publicly listed corporations to have at least 40% of women on their boards or close their doors to business. As a result, approximately 38% of board members are now female compared to 15.5% when the legislation was first introduced.

By 2008 the goal to have more women in the boardroom had been met, and not a single company was closed for non-compliance.

                                                                               (picture from 50/50 Leadership)

Employers feared that the new legislation would cause gender to take priority over merit. Marit Hoel, the head of Norway’s Centre for Corporate Diversity  spoke in defense of the law: “This reform is a success. The alarmist people told us the economy would suffer, that investors would flee Oslo and that the level of competence on the boards would plunge. What we have seen is that the economy is doing very well, that the investors are still there, and that the women who have been appointed to the boards are more highly educated, more international, and younger than their male counterparts, which creates a new dynamic.”

Although now Norway has the highest number of women on company boards in the world, there is room for further reform as women hold only about 15% of executive management positions.

Creating opportunities for women in business creates economic dividends. But some argue that legislation should not be used as a blunt tool to improve gender equality in the corporate world. Does this type of affirmative action backfire, or is it a way of bringing untapped talent to the benefit of bottom lines into the male-dominated board room?