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Voluntary female quotas do not work, Norway says

euobserver.com, 31 March 2011

EU commission figures show that only 12 percent of board members in the bloc's largest companies are women

Voluntary quotas for women on the boards of publicly listed companies, as proposed by the EU commission, do not work, with legally-binding ones needed, a Norwegian official has said on the basis of the Nordic country's leading experience in the area.

"In Norway, we were not able to make a difference with the voluntary approach," public administration minister Rigmor Aasrud told EUobserver in an interview.

She recalled that Norway's Conservative government in 2003 told companies they would pass a quota law in two years unless they boosted the number of women by themselves.

"But it wasn't a real success, the voluntary system didn't function. We increased from five to six percent, it wasn't really visible. So they passed the law and companies were given two years to implement a 40 percent quota in the boards. From 2007 to 2009, they increased from six to 39.6 percent. That was very successful," she explained.

According to the Norwegian law, publicly listed companies can be dissolved if they fail to reach the 40 percent quota. No company has been dissolved so far.

Companies first opposed and campaigned against the law. But once legislation was passed, many began to offer training courses, where CEOs of volunteer firms could chose up to three qualified executive women to complete competence training and networking opportunities. By the end of 2007, almost 600 women had completed the specialised training, half of which have since become members of Norwegian boards.

In Europe, EU commission figures show that only 12 percent of board members in the bloc's largest companies are women and in 97 percent of cases the board is chaired by a man. So far, the share of female board members has increased by just over half a percentage point per year over the last seven years.

"At this rate, unless action is taken, it will take another 50 years before there is a reasonable balance (40 percent of each sex) on company boards," the EU commission said in its recent press statement.

EU justice commissioner Viviane Reding earlier this month challenged all EU publicly listed companies to sign up to a voluntary pledge to increase the presence of women on their boards to 30 percent by 2015 and 40 percent by 2020. If no action is taken within a year, she suggested, the commission may come up with binding rules.

In Norway, the voluntary system did not work because "male members of the selecting committees always found people from their own networks, usually men as well," Aasrud said.

While admitting that the quotas represent a form of positive discrimination, she insisted that the women chosen are "well educated" and have "different experiences and younger than their male colleagues."

Similarly to EU statistics showing that 60 percent of university graduates are women, in Norway, three out of five students completing their studies are female.

"In general, the experience in Norway has been good for the companies, more creativity, more innovation, more diversity than before," Aasrud noted.

One way to ensure the success of quotas, however, is to improve daycare and social assistance for both parents, so that the mother does not have to sacrifice her career in order to take care of the child, the Norwegian politician added.

"I think it's important to combine quota rules with good social security systems. We have a system giving the father the possibility to stay at home for 10 weeks. Two of our male ministers have taken paternity leave in recent months," she said.

"It is rather common in Norway that both men and women stay home with the children. That has been important for giving women career opportunities, because employers are familiar with both women and men taking parental leave."

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