Lessons from Norway: Thinking the Unthinkable, Doing the Impossible

Business people often tell me that we are in a global economy and that we have much to learn from the international marketplace. And then they go and ignore the lessons from Europe, or Asia, or Africa. But research into the Nordic, Israeli, and British efforts on behalf of women on boards of directors indicates there are a number of viable, if not controversial, strategies that are being tested in the marketplace of ideas for how to advance women to top leadership ranks and service as directors of major corporations.

Norway is one of the most assertive nations in terms of their interesting initiatives to promote, train, and advocate on behalf of women on boards of directors. But, in a recent (2004) survey of international corporate governance practices, Spencer Stuart ignored their experience. In its many endeavors to reward corporations for their programs to promote diversity, Catalyst too has ignored Norway's public as well as corporate initiatives.

Too bad, too, because there are many lessons to be drawn from the controversial efforts underway in Oslo and environs.

It started in 1978, when Norway passed the Equal Status Act mandating that each sex have at least 40% representation on public councils and boards. (Contrast that with our efforts in the US to amend the Constitution in 1972 with the Equal Rights Amendment.)

In October 1999, a conservative politician, Ansgar Gabrielsen (male), then the Norwegian Minister of Trade and Industry, proposed a change to the ESA to extend the 40% requirement to include women on boards of directors of state-owned as well as the nation's major public stock enterprises. The law was passed in March 2002 requiring that all state-owned firms achieve the 40% deadline by 2003, just one year later. For publicly-held companies, the deadline was mid-2005.

Implementation of the law is now in the hands of Laila Dåvøy (a female) -- head of the Norwegian Ministry of Children and Family Affairs. In April 2005, the ministry began formalizing the enforcement processes. New companies would not be able to register if they did not meet the 40% goal. Existing firms would have until 2007 to achieve the goal. If they failed to do so, the ministry would begin a process of notification, hearing, and then de-registration -- essentially denying non-compliant firms the authority to conduct business in Norway.

So, Norway has had a number of years' experience with this "quota" system. Even though the government asked for recommendations from a wide array of interests, still the proposal generated a great deal of controversy and ire which continues today.

Some of the most vocal opposition came from The Confederation of Norwegian Business and Industry (Næringslivet Hovedorganisasjon, or the NHO - sort of like a national "chamber of commerce", representing the interests of Norwegian employers).

The Executive Director of the NHO's Industrial Relations unit is a female, Sigrun Vågeng. In representing the business interests, she argued against a quota system. Nevertheless, under her leadership, the NHO initiated a series of programs to make it possible for Norwegian businesses to move toward the objective of increasing women on boards of directors as a national competitive strategy.

    "NHO is implementing a number of parallel measures and activities to get women into management and onto boards of directors. Many programmes and pilot projects will be implemented under the NHO "Female Future -- mobilising talent" umbrella. The project will concentrate on three areas: visibility, tailored human resource development and meeting places. The building blocks are: management and the work of boards of directors, meeting places, and storytelling and management mentors."

In January 2004, the NHO started the part of the program where companies would identify 3 "high potential women" from within their organization whom they would send to a seminar-long governance training program that included such subjects as strategic planning, economics, and ethics. At semesters' end, the graduates' names were entered into a national board candidacy database from which NHO member firms could select directors for consideration.

[Note: the NHO has been replaced by the Center for Corporate Diversity. See www.corporatediversity.no/ for a detailed summary of the background and programs of Norway’s Center for Corporate Diversity.]

Over 50 of Norway's 85 largest companies signed on to the "pearl diving" program of Female Future. When asked to define what is meant by "pearl diving", NHO Gender Equality Manager Benja Stig Fagerland replied:

    "By pearl diving we mean companies' search for women with the right qualifications. We know that they -- the pearls -- exist and we want to help companies to find them."

Men as well as women expressed interest in participating in the highly-valued educational and experience opportunity.

Progress? When the law was passed in 2002, the share of women on Norwegian boards was only 6% at companies listed on the stock exchange, essentially unchanged for years. By March, 2003, state-owned companies were at a 45% share of women on boards, exceeding the goal by 5%.

The share of women on listed stock exchange company boards rose to 8.5% in July 2003, then to 11% in April of 2005, when the Ministry of Children and Family Affairs announced the tough proposed de-registration enforcement regulations. It reached 15.7% in May of 2005 and is reportedly at 20% in August 2005. That is the highest share of female candidates on boards of any nation, including the U.S.

According to international surveys, almost 60 percent of the 7% of women on boards in The Netherlands are "foreigners" -- primarily from the UK or US.

It's time that we, in the United States, take a cold hard look at what WORKS vs. what does NOT WORK in terms of getting women on boards of directors. . . . more

© 2005 Technology Place Inc.