Boards take on a new look
Heidi Marie Petersen’s knowledge of strategy and spreadsheets at a board meeting in Norway last year made a male colleague sit up and take note.
“Wow! You actually know something about business,” the man said after the meeting, Petersen says. The 49-year-old mother of two now serves on the boards of 11 companies, including Norsk Hydro, Europe’s second-largest aluminum producer, and Aker Kvaerner, Norway’s biggest engineering company.
Under a Norwegian law passed four years ago, women must fill 40% of the country’s corporate board seats effective New Year’s Day. The measure affects 487 public companies ranging from StatoilHydro, Norway’s largest company by stock market value at $99 billion, to Exense, an Internet consultant, at $9.5 million. Most companies already have complied under media pressure and the threat of being shut down by the government.
The corporate governance measure underscores Norway’s commitment to gender equality. The nation of 4.7 million already has the highest ratio of female directors worldwide and more women than men in government.
Critics say the rule risks sacrificing qualification for quota. The Confederation of Norwegian Enterprise says shareholders should pick board members and measures should be voluntary.
Quotas are “a bunch of nonsense,” says Bente Lowendahl, 49, who was named the first female professor at the Norwegian School of Management five years ago. “I’m glad I was chosen for my merits and not because I was a woman,” she says.
Lowendahl, who has a doctorate in applied economics, says she’s too busy to sit on any corporate boards. Petersen, the woman who sits on 11 boards, has a master’s degree in chemistry and mathematics and worked in the oil industry for almost 20 years.
The rules took effect for state-owned companies in January 2004. The law exempts private limited companies because many of them are small, family enterprises. Other companies may choose to give up their public listings to avoid the requirement.
The move is designed to employ more of Norway’s workforce in steering companies and ending the tradition of picking board members from a small pool, according to Ansgar Gabrielsen, the Conservative party politician who helped pass the legislation.
With unemployment at a 20-year low of 1.6%, Norwegian companies already struggle to fill job vacancies. There were 38,900 people out of work in December.
Women fill 410, or 37%, of the 1,117 board seats at companies listed on the Oslo stock exchange. That’s up from less than 7% in 2002 and twice as many as in Sweden, four times as many as Denmark and almost seven times the number in Iceland, according to Marit Hoel, director of Oslo-based Center for Corporate Diversity, which tracks women in management.
In the U.S., women hold about 15% of board seats at the 500 biggest companies, according to New York-based Catalyst, an organization tracking women in business.
Media coverage has added to pressure on companies to add female representation. Newspapers have published lists of firms that have yet to name the required number of women to their board. As 2007 progressed, the lists grew ever shorter.
Hoel says companies will be wary of facing criticism by the media for being the only ones left without enough women: “They can choose to be the last man standing, but everybody else has chosen to sit down at the table with women.”
And then there’s the money. Sitting on the board of one of the largest companies pays about 200,000 kroner ($37,000) a year, Hoel says.
