"A woman with Asian-experience" and other stereotypes of board diversity

As the debate continues about increasing the diversity of composition on boards, the Norwegian experience of introducing quotas to redress the gender balance of its boards is widely cited as a key example.

Norway was the first country to introduce a quota for increasing the number of women on company boards. The legislation, introduced in 2003, required that at least 40% of both genders be represented. Non-compliant companies were faced with sanctions including forced dissolution.

It is critical to note that Norway didn’t legislate for “the boards of all listed companies to be at least 40 percent female” as is widely quoted in global media.

Instead, it introduced laws to ensure that corporate boards be composed of 40% of the under-represented gender.

The distinction is critical for the debate on gender balance in the boardroom as it removes the focus on feminism and “women’s issues” and instead forces the argument to be about equality in leadership in business and in the boardroom.

The legislation, which was introduced 10 years after the first motion for its introduction was made, was passed in 2003 by a majority of the Norwegian Parliament. It amended ss6-11a of the Norwegian Companies Act to state that both genders should be represented on boards of public limited companies, state and municipality owned companies and co-operative companies (a business organisation owned and operated by a group of individuals for their mutual benefit).

In the boards of publicly-listed companies, both genders should be represented as follows: 

1.       Where there are two or three board members, both genders should be represented;

2.       Where there are four or five board members, both genders should be represented with at least two members each;

3.       Where there are six to eight board members, both genders should be represented with at least members each;

4.       Where there are nine or more members of the board, each gender should be represented with at least 40 per cent each.[i]

The balancing of gender composition on Norwegian boards was initially slow but by 2005 momentum was evident. The proportion of women in 2002 was six per cent, rising to nine per cent in 2004 and 12 per cent in 2005. Then real progress was made with 18 per cent of board seats occupied by women in 2006, 25 per cent in 2007, 36 per cent in 2008 and 40 per cent in 2009[ii].

The Norwegian experience has caused other European countries, such as Holland, Spain and Iceland, to also introduce legislation to achieve gender balance on boards.

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[i] Storkvik, A., and Teigen, M., (2010) “Women on Board: The Norwegian Experience”, Friedrich Ebert Stiftung, International Policy Analysis.

[ii] Teigen, M., (2008) Norwegian quota policies, paper presented at the Nineteeth Meeting of the Helsinki group on Women and Science, 4-5 November, ISF paper, 2008:12

Should company directors be on Facebook?

Before social media was part of daily life for many people, I was engaged by KPMG to research and write a report on the training and education of Australian board members.

After conducting a series of interviews, I concluded that board members believed they only needed to attend courses on corporate governance and related topics if they weren’t “experienced” in the boardroom.

The interviewees – all prominent company directors serving on boards of listed companies as well as significant non-profits - considered the content of most courses to be too “low level” to be of any assistance to experienced board members. Consequently, they were more likely to be guest speakers at such courses, rather than participants, they said.

Their time would be better spent reading and talking to peers and management rather than attending formal courses. Of the sources of information on which they most relied was the Australian business bible, The Australian Financial Review (AFR).

Fast forward a decade and I wonder how many directors today think the same way? Is the AFR – or its equivalent in other countries - still regarded as the best source of business information for the company director?

There is a plethora of information available online but how many company directors are comfortable sourcing it? Many tell me: “I’m on Linked In but I hardly ever check it because I don’t have the time.” One director said that in order to maximise the time she spends with her children, she severely restricts her usage of her computer. She relies on the weekly media updates she’s sent by her companies; she also reads the AFR.

Yet social media forums such as specialist discussion groups on Linked In provide directors with a network of peers and specialist advisors with whom they might not otherwise engage, let alone meet.  Some of the world’s biggest brands have a Facebook page. The chairman of an ASX20 company may not feel the need to tweet but all directors should understand the power of Twitter.

Social media is the way many people choose to engage with the world – people who are a company’s shareholders, stakeholders, employees and customers. These new ways of receiving and disseminating material shouldn't be ignored.

A quick peruse of a selection of "favorite" websites - including overseas business newspapers - as well as logging in to Facebook and Linked In is exactly the same as opening the AFR over breakfast, turning on the radio to listen the the ABC, or watching the late SBS news of an evening. It's a habit and it's part of staying in touch with how the world is thinking.