Shattering the glass ceiling

Norway has used powerful legislation to break down the barrier to women occupying senior corporate jobs. Could this be the way forward for other countries? asks Richard Willsher

As of 1 January this year, 40% of board members of Norwegian public limited companies must be female. The legislation, passed in 2005, required that companies had two years to implement the new rules or face being closed down. Then, only 12.8% of Plc directors were female. Now the figure is close to the target, with 85% of companies complying and the remaining ones being given two more months to shape up.

'This is a question of democracy in Norway, of reaching a balance of participation in society,' explains Ragnhild Samuelsberg, spokesperson for the country's Ministry of Children and Equality. 'This legislation is an important step towards equality between sexes and a more even distribution of power, and of wealth creation in society. This law secures women's influence in decision-making and in the economy.'

The initial reaction of the Confederation of Norwegian Enterprise, the NHO, to such a draconian approach by the Government was predictably aghast. There were cries of alarm that businesses employing large numbers of people might actually be forced to close just because they might lack a handful of women at board level. Even now, Sigrun Vågeng, the NHO's executive director, labour market and social affairs, rails against the threat of company closures as a punishment that is disproportionate to the crime, but importantly the NAO is fully supportive of the principle of equality in business.

Vågeng has been besieged by enquiries from the world's press asking for comment on the measures and she concedes that Norway, a small country with huge oil wealth and with a history of social democracy, may be able to go about things differently than some other countries.

'Women in Norway have always had a job outside the home. Almost everyone can find kindergarten places for their children. We have a high birth rate and high participation of women in working life. At the same time, the unemployment rate here is less than 2%, which means that all companies are looking for competent, highly skilled employees. When you look at Norway you have to look at our culture and infrastructure, and when you have so little unemployment you look for a high level of diversity in the workplace and you try everything to make sure you get the right person for the job. We desperately need more women in the private sector. We had to do something, so that is why we have turned this legislation into a positive. And even if I am against a quota-led approach and believe that you should be on the board because you are competent, not because you are a man or a woman, I can see that the discussion we have had as a result of this law being introduced has been good for us.'

The issue of women board members has been widely discussed elsewhere, but research carried out by Cranfield University School of Management demonstrates how few women participate at senior level in major listed companies. The Female FTSE Report 2007 finds that only 11% of FTSE100 directorships are held by women, which falls to 7.2% for the FTSE250. Female executive directorships amount to a mere 3.6% of all directorships; 3.9% for the FTSE250. The FTSE100 includes a number of international businesses such as Royal Dutch Shell, Anglo American, Unilever and BHP Billiton, so in many ways it reflects global practice. The picture looks even worse once you drill down into particular sectors. Although, for example, supermarket group Sainsbury's leads the pack among the FTSE, with three female directors out of board of 10, in science, engineering and technology company boardrooms 92% of directors are male, according to the Cranfield research.

However, there are those who believe that quotas and statistics are the wrong way to go in the first place and that passing laws is not the solution. 'Legislation is a rather simplistic approach to what is a rather complex issue,' says Sarah Churchman, a human resource director responsible for diversity and inclusion at PwC in the UK. 'It's not about fixing women or treating them in a tokenistic way, it is about making everybody aware of the opportunity cost and the cost to business of ignoring a huge portion of the talent pool. And it is not that women are necessarily being excluded deliberately, it's the subconscious stuff that prevails.'

Critical

Glenda Stone, CEO of Aurora Network, the women's networking organisation agrees: 'Quotas belong to decades gone by. If companies are smart and progressive, they are going to understand why a diverse mix on their boards makes good sense… Diversity of perspective, experience and wisdom brings a better product, so a diverse board is absolutely critical.'

'Employers need to see the business benefits,' says Marion Seguret, senior policy adviser to the Confederation of British Industry's employment and diversity group. And she goes on to explain that they also need to understand the risks because if the board is made up of middle-aged, white males, the ability of a business to manage for a future where women among diverse populations are likely to be very significant stakeholders is likely to be impaired.

According to Dianah Worman, adviser on diversity at the Chartered Institute of Personnel and Development, it is the culture of the boardroom that has to change. She says that while women may not know how to work in the boardroom, they may also not be very attracted by such an environment. They may well be looking for a more flexible working environment where they can exercise their talents and also accommodate the other aspects of their lives. Churchman agrees and adds that corporate cultures are often old and difficult to change, so what is needed is not board numbers for women but change that meets expectations that women may have to do interesting, remunerative work that may not necessarily be the main focus of their lives.

So to legislate or not to legislate and establishing quotas in the Norwegian manner therefore misses the point. Joining the ranks of the 'middle-aged white blokes' that tend to sit on company boards looks distinctly outmoded. Worman says that a variety of approaches to change are necessary if companies are to tap into the 50% of educated talent that they may be under-using. The development of these processes is an international one and Maxime Cerutti, who is responsible for gender issues at Business Europe, the Brussels-based organisation that represents business confederations throughout the EU, says that each member country has its own approach, while the over-arching lead from the European Commission is to pursue an agenda of equal pay and equal participation in business. Stone summarises the position succinctly: 'It's about making work work for those people you want to hold on to.' And for sure, Norway's forthright approach has set a lot of people thinking about where they stand on the issue of women's involvement in the upper echelons of corporate life.

Richard Willsher is a financial and business writer with a background in investment banking.