Women take their place on corporate boards
As the homeland of strong female characters from Nora in “A Dolls House” to former Prime Minister Gro Harlem Brundtland, Norway seemed the natural place to enact a law in 2005 requiring publicly traded companies to fill 40 percent of corporate board seats with women by 2008.
The 40 percent target has been met, in part through the efforts of people like Elin Hurvenes, a Norwegian entrepreneur who founded the Professional Board Forum to help women candidates meet the institutional and wealthy private investors who call the shots when it comes to picking Norways boards.
Some companies have embraced the change enthusiastically: Dornstein, a major seafood company that never had a woman on its board, named Hanne Refsholt, the chief executive of Norways largest cooperative dairy, to be its chairman.
But when the law was first proposed in 2002, “all the companies were up in arms,” recalled Hurvenes, an MBA who sits on the boards of two start-up companies. “Executives were quoted as saying it was a completely ridiculous law and it would never happen.”
And Hurvenes said it never would have happened without the provision in the law that companies would be shut down if they did not comply. In 1993, women took up 3 percent of corporate board seats; in 2002, the figure was 6 percent. “If organic growth is 3 percent every 10 years,” Hurvenes said, “it would have taken 100 years to get to 40 percent.”
For ambitious women eager to gain a seat in the boardroom, the good news from Norway and elsewhere is that a growing number of companies are searching for women with qualifications, talent and tact to serve as outside, or nonexecutive, directors.
“The general consensus today is that diversity is very good,” said Krister Svensson, who runs a mentoring program based in Brussels for senior executives preparing to be board members or chief executives. This year Svensson has five women in his nonexecutive director mentoring program; last year he had none.
There is, Svensson said, a new paradigm for corporate governance: “If you have 12 gray-haired men average age 65 on a board, they tend to think about business prospects and strategy from the same perspective. But if you put a 45-year-old from a hot company and a woman and a person from abroad on the board, the quality of the debate will deepen.”
High-profile corporate governance studies like the Higgs Report in Britain, which in 2003 emphasized the need to “broaden the pool of candidates” for directorships, have also influenced some companies to appoint women to their boards.
But the reality on the ground is that the proportion is still small. Experts say it is constrained by the small number of women executives who have reached the so-called corner suite level, as well as a deep-rooted desire at many boards to preserve traditional male networks and the chemistry and comfort level that go with them.
Thats why the Norways five-year process has raised expectations among women jockeying for board seats throughout Europe.
Since women and men often network in different circles, Hurveness company, sponsored by corporations like Norsk Hydro and Telenor, offered a forum for companies to meet women who were interested in filling board seats. Women are often less vocal about asking for a higher position, and Hurvenes encouraged them to use the contacts they made. She called the new law “the largest transfer of power to women since they got the vote.”
Now Norways initiative is being followed elsewhere. In Spain, the Socialist-dominated Parliament has passed legislation calling for 40 percent board participation by 2015, although so far it does not have the kind of enforcement measures that accompanied the Norwegian law.
In the Netherlands an organization called Topbrainstorm is preparing a voluntary charter for corporations to sign that would commit companies to meet targets for getting women into the kind of senior executive positions that make it possible for them to become board candidates. The initiative will be presented to the Dutch government on May 28.
Marieke Bax, an MBA and former Sara Lee executive who founded Topbrainstorm, said that in addition to corporations pledging to promote women, there needs to be a government initiative to smooth the paths and build the image of women who choose to devote a large portion of their lives to corporate careers. In the Netherlands, Bax said, 85 percent of women with children work a maximum three days a week because of social norms - mothers are expected to bring their children home from school to eat lunch, and hiring a nanny is frowned upon. “When these women go to pick up their children after school, they are ostracized and practically spat at,” Bax said.
