Women in the boardroom: In Norway, it's the law

Norway's "golden skirts'' are joining corporate boards as part of the nation's mandate to put more women at the top. Some have already shaken things up.

By THE ECONOMIST

Last update: January 7, 2008 - 5:34 PM

Henrik Ibsen, author of the play "A Doll's House," in which a pretty, frustrated housewife abandons her husband and children to seek a more serious life, would surely have approved.

Since Jan. 1, all public companies in Norway are obliged to ensure that at least 40 percent of their board directors are women.

Most firms have obeyed the law, which was passed in 2003. But about 75 out of the 480 or so companies it affects are still too male for the government's liking. They will shortly receive a letter informing them that they have until the end of February to act, or face the legal consequences -- which could include being dissolved.

Before the law was proposed, about 7 percent of board members in Norway were female, according to the Center for Corporate Diversity. The number has since jumped to 36 percent. That is far higher than the average of 9 percent for big companies across Europe -- 11 percent for Britain's FTSE 100 -- or America's 15 percent for the Fortune 500.

Norway's stock exchange and its main business lobby oppose the law, as do many businessmen. "I am against quotas for women or men as a matter of principle," said Sverre Munck, head of international operations at Schibsted, a media firm. "Board members of public companies should be chosen solely on the basis of merit and experience," he said. Several firms have even given up their public status in order to escape the new law.

Companies have had to recruit about 1,000 women in four years. Many complain that it has been difficult to find experienced candidates. Because of this, some of the best women have collected as many as 25 to 35 directorships each, and are known in Norwegian business circles as the "golden skirts."

One reason for the scarcity is that there are fairly few women in management in Norwegian companies -- they occupy around 15 percent of senior positions. It has been particularly hard for firms in the oil, technology and financial industries to find women with enough experience.

DNO, for instance, an oil-and-gas firm that operates in Yemen, Iraq and elsewhere, found women it was happy with last November, but their expertise is in finance and human resources, not oil, says Helge Eide, DNO's president. "However, we retain sufficient oil and gas experience in the men on our board," he adds.

Some people worry that their relative lack of experience may keep women quiet on boards, and that in turn could mean that boards might become less able to hold managers to account. Recent history in Norway, however, suggests that the right women can make strong directors.

When a whistle-blower at Statoil, the country's biggest firm, alerted managers in 2003 to possible illegal payments to a consultant to secure contracts in Iran, it was Grace Reksten Skaugen and two other women directors who called an extraordinary board meeting that resulted in the resignations of the chairman and chief executive.

"Women feel more compelled than men to do their homework," says Reksten Skaugen, who was voted Norway's chairman of the year for 2007, "and we can afford to ask the hard questions, because women are not always expected to know the answers." She is chairman of Entra Eiendom, a large Oslo-based property company.

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