Monday, March 12, 2007
A better way to get more women on boards
By Bente Landsnes
Published: March 7 2007
A law has been passed in Norway that requires all public limited companies to have at least 40 per cent female representation on their boards of directors. Companies must comply from January 1, 2008, and may be liable to fines or deregistration if they do not satisfy the requirements.
It is still the case today that most women choose typically female careers: female students take up 90 per cent of places on courses in healthcare and social work.
A survey of 15-year-olds in Europe – of both sexes – has shown that even this generation are very traditional in their career choice. Girls want to work in fashion/clothing, healthcare and social work, while boys are more inclined towards commerce and technology.
A breakdown of the senior management of public companies in the Nordic countries by gender shows a declining trend for female participation. This means that there are fewer female managers, both in middle and senior management.
There has been a lot of research in this area, and there are doubtless many different possible reasons, but I think the key lies in the answers from the 15-year-olds.
It is unfortunate that girls of this generation still prioritise traditional female jobs. I say unfortunate because I am convinced that it is important to have good gender diversity in all companies, not just on boards but also among management and employees in general.
We need not just gender diversity, but also diversity in other areas such as cultural background and nationality. In my view, this helps to ensure a wider range of ideas and better decision-making both within the organisation and at board level.
If we look at this from the viewpoint of a public company, the choice of non-executive directors depends not on gender but on the company's need for people with experience and expertise.
This is where the problem arises. The non-executive directors a company needs are people with insight, expertise and management experience who can make a real contribution to the company's growth and development.
This does not mean that a collegiate board of directors cannot include someone with less experience. But there must be a limit beyond which the composition of the board cannot meet the company's requirements.
My concern is that introducing a legal requirement for 40 per cent female representation will create a situation where some companies end up with non-executive directors who would not be their first choice in terms of the company's needs.
The reason for my concern is that there simply are very few female senior executives, their numbers are declining, and the next generation of women so far seems to prefer other careers.
I do not want to give the impression that there are no competent female managers in Norway. Quite the reverse. I personally know quite a number of female managers who have never been invited to become a non-executive director, but who in my opinion would make a valuable contribution to a board.
Why do we not see these women being appointed as non-executive directors?
I would like to focus here on the role of company nomination committees. I am convinced that if there were more women on nomination committees, it would help identify more good female candidates for non-executive directorships.
It is a simple reality that men tend to know men and women tend to know women. We are seeing a whole new head-hunting business emerging for non-executive directors and this demonstrates the need for greater diversity on nomination committees.
I am sure that this would give nomination committees access to a better choice of candidates and lead to more women being proposed as non- executive directors at the next annual general meeting.
We need to see women themselves taking the initiative to follow a management career outside traditionally female areas before we can assume that there are enough women with the right experience and expertise to take up 40 per cent of all non-executive directorships.
I find the trends we see in young women's choice of careers worrying. I hope that our 15-year-olds will think again about their future careers and that their mothers will encourage them to think differently.
The writer is president and chief executive of Oslo stock exchange ¶ 4:39 PM
Published: March 7 2007
A law has been passed in Norway that requires all public limited companies to have at least 40 per cent female representation on their boards of directors. Companies must comply from January 1, 2008, and may be liable to fines or deregistration if they do not satisfy the requirements.
It is still the case today that most women choose typically female careers: female students take up 90 per cent of places on courses in healthcare and social work.
A survey of 15-year-olds in Europe – of both sexes – has shown that even this generation are very traditional in their career choice. Girls want to work in fashion/clothing, healthcare and social work, while boys are more inclined towards commerce and technology.
A breakdown of the senior management of public companies in the Nordic countries by gender shows a declining trend for female participation. This means that there are fewer female managers, both in middle and senior management.
There has been a lot of research in this area, and there are doubtless many different possible reasons, but I think the key lies in the answers from the 15-year-olds.
It is unfortunate that girls of this generation still prioritise traditional female jobs. I say unfortunate because I am convinced that it is important to have good gender diversity in all companies, not just on boards but also among management and employees in general.
We need not just gender diversity, but also diversity in other areas such as cultural background and nationality. In my view, this helps to ensure a wider range of ideas and better decision-making both within the organisation and at board level.
If we look at this from the viewpoint of a public company, the choice of non-executive directors depends not on gender but on the company's need for people with experience and expertise.
This is where the problem arises. The non-executive directors a company needs are people with insight, expertise and management experience who can make a real contribution to the company's growth and development.
This does not mean that a collegiate board of directors cannot include someone with less experience. But there must be a limit beyond which the composition of the board cannot meet the company's requirements.
My concern is that introducing a legal requirement for 40 per cent female representation will create a situation where some companies end up with non-executive directors who would not be their first choice in terms of the company's needs.
The reason for my concern is that there simply are very few female senior executives, their numbers are declining, and the next generation of women so far seems to prefer other careers.
I do not want to give the impression that there are no competent female managers in Norway. Quite the reverse. I personally know quite a number of female managers who have never been invited to become a non-executive director, but who in my opinion would make a valuable contribution to a board.
Why do we not see these women being appointed as non-executive directors?
I would like to focus here on the role of company nomination committees. I am convinced that if there were more women on nomination committees, it would help identify more good female candidates for non-executive directorships.
It is a simple reality that men tend to know men and women tend to know women. We are seeing a whole new head-hunting business emerging for non-executive directors and this demonstrates the need for greater diversity on nomination committees.
I am sure that this would give nomination committees access to a better choice of candidates and lead to more women being proposed as non- executive directors at the next annual general meeting.
We need to see women themselves taking the initiative to follow a management career outside traditionally female areas before we can assume that there are enough women with the right experience and expertise to take up 40 per cent of all non-executive directorships.
I find the trends we see in young women's choice of careers worrying. I hope that our 15-year-olds will think again about their future careers and that their mothers will encourage them to think differently.
The writer is president and chief executive of Oslo stock exchange ¶ 4:39 PM
