In Norway, Law Promotes Women In Boardroom In Norway, gender diversity in the boardroom isn't just a nice idea, it's the law: The boards of all publicly traded and public limited companies must have at least 40 percent female representation. But there is sharp disagreement over whether quotas have changed the status quo.
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In Norway, Law Promotes Women In Boardroom

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In Norway, Law Promotes Women In Boardroom

In Norway, Law Promotes Women In Boardroom

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LINDA WERTHEIMER, host:

A top business regulator in Europe likes to say that if Lehman Brothers had been Lehman Sisters, if more women had been in charge, the investment bank might not have gone bankrupt. The U.S. government can't force companies to put women in senior positions, but in Norway it's the law. The law requires that women hold at least 40 percent of the seats on a company's board of directors.

NPR's Eric Westervelt traveled there to see what kind of impact that's having on business.

ERIC WESTERVELT: In 2002, barely six percent of Norway's corporate directors were female and 70 percent of the top companies in the country didn't have a single woman on their executive boards. Then the Norwegian parliament took action. Executive Kristin Holth says the government needed to step in.

Ms. KRISTIN HOLTH (Vice President, DNB Nor): Otherwise, it would have taken so long time to come up to the number. If 40 is right or not, I don't know. But the point is to get more female, or more diversity on the board - female or not, it's the diversity which I think is very good.

WESTERVELT: But there are questions as to whether the law has really made a difference, changed the culture at board meetings or improved corporate governance. Holth thinks it has made a difference, but the change has been subtle, hard to quantify and largely anecdotal. Holth is the vice president at DNB Nor, Norway's largest bank. She says perhaps women are more likely to ask nontraditional or unorthodox questions in board meetings and more readily admit when they don't know an answer. She says women generally promote a less testosterone-fueled way of running a company.

Ms. HOLTH: Maybe females take a less aggressive approach, so you might see more, not necessarily conservative, but less aggressive attitude in the companies - which might be a good thing in the climate we are now.

WESTERVELT: The gender diversity law has led to the downfall of at least one old boys' club. Several new female board members at Statoil, Norway's largest company, called an extra board meeting about a corruption probe and demanded answers. Their actions led to the resignations of Statoil's chairman and its chief executive. Anne-Grete Ellingsen is a senior official at an energy company in Kristiansand, in Norway's south, and she sits on the boards of several Norwegian companies. She believes the gender diversity law is in some ways an extension of Norwegian culture.

Ms. ANNE-GRETE ELLINGSEN (Energy Company Senior Official): It's a spin from the Viking time. The females had to take a lot of responsibility when the Vikings went away. We have a tradition for that.

WESTERVELT: But the tradition of Scandinavian skepticism abounds as well.

Mr. KNUT ANTON MORK (Economist): Frankly, I can't see any difference in the type of decisions that have been made after this rule has been changed.

WESTERVELT: Economist Knut Anton Mork says perhaps ethnic diversity or more international representation would have made a bigger difference on boards. But his larger critique is that too many talented female business leaders are now spending most of their time in board meetings, with some women sitting on six, eight or a dozen different boards. The law has spawned a growing class of what you might call professional board sitters, which some in Norway have nicknamed the Golden Skirts.

Mr. MORK: They could have been filling very good and important managerial positions. Instead, they're sitting on boards.

WESTERVELT: Some businesswomen here agree. But they say corporations have been choosing from only a limited pool of female candidates and need to expand the talent pool. Anne-Grete Ellingsen sits on five boards, in addition to her job as a director at Agder Energi.

Ms. ELLINGSEN: To do a very professional board job, you need to have quite a varied and long experience in management. Some of these women do not have that. They've been on boards only when they quit their job and do only that. I'm a bit skeptic to that.

WESTERVELT: Even some of the women who worked hardest for the law also have concerns about how it's working, or not working. Marit Hoel with Norway's Center for Corporate Diversity says the law has done nothing so far to boost women into the top ranks of corporate management, contrary to what she hoped would happen.

Ms. MARIT HOEL (Center for Corporate Diversity): You know, I am a bit worried about this. As I review the numbers for executive leaders, it has practically not improved in top management during the last, let's say, five years. We have an enormous lack of women in executive leadership.

WESTERVELT: Hoel is, however, heartened that even though the quota law doesn't apply to them, Norway's many private companies have dramatically increased female representation on corporate boards. While overall, few in Norway want to go back to the status quo, five years into it, many are questioning whether the state can really mandate corporate diversity.

Eric Westervelt, NPR News, Kristiansand.

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