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Gender Quotas: Following Norway’s lead?

by | Dec 5, 2017 | News

Recently, BroadAgenda published an article from the Norwegian Ambassador to Australia, Unni Klovstad, outlining Norway’s success in achieving gender equality in leadership positions. The Ambassador referred to research done 13 years ago that highlighted Norway’s role as the first country in the world to legislate a 40 percent gender quota for all publicly listed and publicly owned companies.

In what was then considered a bold move, the Norwegian quota mandated a minimum of 40 percent of all board seats were to be held by women. At the time the law was introduced, women occupied only 7 percent of board positions in Norway. Now its over 40 percent.

Back in 2004, as part of my Masters in Women’s Studies at the University of Oxford, I completed a research thesis on gender diversity on corporate boards. Consequently, I contributed to the research to which Ambassador Klovstad referred. As part of that thesis, I interviewed Australian women board directors, and arranged and paid out of my scarce student dollar to have the draft Norwegian bill translated into English, in order to make it available to English speaking scholars. Given this history, it’s now particularly interesting to consider what has changed since then, and I can’t help but wonder if those Australian women board directors I interviewed back in 2004 might have a different view if interviewed today.

Norway resized

Norway was the first country in the world to legislate a gender quota of 40% women on all publicly listed and publicly owned companies

As part of my findings, I reported that the threat to introduce legislation, if companies did not voluntarily achieve a 40 percent gender quota, not only politicised the issue of women’s representation on boards, but made it an urgent risk management consideration. In order to ‘reality test’ the Norwegian proposal in Australia I conducted a questionnaire with Australian women board directors.

Should the Norwegian proposal be adopted in Australia?

The questions I asked included “Should the Norwegian proposal be adopted in Australia?” Women commonly responded in the negative. The most common reasons given as to why they didn’t think the Norwegian quota system would work in Australia were around perceived political barriers. The answers highlighted both political and cultural differences between Norway and Australia, and different perceptions around the role of government. Indeed, many Australian women still hold the view that quotas are not a solution to gender inequality in board leadership.

The women interviewee responses fell broadly into three areas:

No, for party policy reasons – “No. Not under the present government, but probably not under a labour one either with Mark Latham heading it.”

No due to a lack of political will – “Technically yes, but I can’t imagine the political will being there for such a change so practically no.”

Yes due to values – “I imagine it will create a fair amount of discussion through the media however we are fairly liberated towards women’s place in society and business and I imagine it could go through”.

The respondents were then asked if they thought a similar law to Norway’s gender quotas should be passed in Australia. Their responses were evenly split. Negative responses focused on the ideas of best practice and merit:

Best practice – “Not really, best practice should be seen as requiring at least one female candidate be short listed for each board appointment.”

Merit – “No although I certainly believe more women should be represented on boards, a board member should be elected on their merits, skills and relevant experience.”

Belief in eventual change – “No I believe that there is increasing recognition that there needs to be a diversity of views on a board and that change will eventually take place.”

 

men board meeting small

Australia stands at 25% for the ASX 200 with 11 boards still having no women board directors as at August 2017

 The positive responses highlighted the importance of diversity and strategic direction:

“Yes – I think this would allow diversity with corporations and governance and a fresh perspective that is not always presented currently.”

“Yes, to provide strategic direction and as a goal rather than mandating a percentage”.

 

Despite difference of opinion, the women interviewees did consider that gender was relevant when considering board composition. When asked what strategies their own boards had put in place to increase the representation of women, their responses highlighted a distinct lack of formal strategy among most boards:

“None – There is no strategy in place”.

“None – But have considered female candidates in the last two vacancies”.

“Informal – In recommending suitable candidates for consideration as board directors gender balance is a factor I always take into account”.

 “Boys club is alive and well no matter how far up the corporate/reputable ladder you rise”

Women were asked whether they had ever had an experience on boards where their gender had been made an issue. The majority of women had not, with these exceptions:

“Odd reference to better language and behavior”.

“Yes in the context of sexual and family violence matters – it was viewed that having a woman on the board on these matters would offer greater credibility to the opinions we sought to emit”.

“Other times have been less positive and less obvious. Boys club is alive and well no matter how far up the corporate/reputable ladder you rise”.

 

The women were asked for suggestions for ways to increase women’s representation on boards. The most common theme was the identification of good women candidates and greater acknowledgement of women as leaders.

In Australia, 11 boards (ASX 200) still have no women directors

Since the legislation was first introduced in Norway, women’s representation on boards has risen substantially, from single figures back in 2004, to a position now where over 40 percent of board positions are held by women. Despite a broadly held belief by the Australian respondents that change would occur ‘eventually’, the current data suggests progress remains sluggish. As at August 2017 only 25 percent of ASX 200 board seats are held by women. What’s more, 11 publicly listed top 200 companies have no women boards directors at all.

Pressure is mounting on boards to be held accountable for improving the representation of women on boards with regular reporting and awareness campaigns. Yet, as I look back to where we were at 13 years ago, and the barriers women spoke of back then, it would seem  not much has changed. Certainly, not as much as I had hoped. I look forward to reading the research of another scholar in 13 years from now, and I can only hope the story they have to tell is better and brighter. 

 

For more on Women and Quotas, here is an excellent podcast  recorded in early 2017 in which Dr Cordelia Fine, Carol Schwartz AM, David Gonski AC and Prof Glyn Davis VC of Melbourne University have a lively debate about the merits of gender quotas: ‘To Quota or Not to Quota’,

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