(The following was an article I published in the Toronto Star)
It’s a feminist’s dream come true.
On January 1, while most of the world was celebrating the arrival of another year, across the ocean in Norway companies celebrated (or bemoaned, depending on whom you speak to) the coming into effect of a law requiring nearly half of all seats on public corporate boards to be held by women.
Since creating legislature in 2003 forcing public companies to ensure a 40% quota for women on its boards (and giving companies 5 years to comply before it became law), Norway now leads the globe in gender equality at the board level, with more women in the upper echelons of decision-making circles than any other country.
According to the executive search firm Rosenzweig & Co., among the 535 most senior and highest paid positions in Canadian companies, just 4.8 per cent are held by women. A survey of all FP 500 companies in Canada last year found that only 15.1 per cent of corporate officers were held by females.
Although such gender-balancing legislation in Norway fascinates feminists like me, several questions crossed my mind after my almost reflexive approval of the news. Wouldn’t qualified women already be on corporate boards if they were truly deserving of the position?
And while the corporate glass ceiling for women is commonly acknowledged, is government intervention the best way to achieve real change?
And really, why should women be included on corporate boards?
It would seem that laws like this only reinforce the notion that women are incapable of achieving leadership positions in large companies on their own merits.
Demographically speaking, nomination committees who propose new board members are often men. And while many highly qualified women can be found in candidate pools, the old dogma that we are more comfortable with those who are like ourselves can lead to men hiring other men. And outside these candidate pools women stand less of a chance, as they are often excluded from professional and personal networks that are used for informal hiring.
The results in Norway seem to indicate that legislation would assist women in reaching the top of their companies, who might have otherwise faced deep-rooted cultural barriers, despite their qualifications for the job.
But why should any company even have women on their boards, forcibly or not?
Beyond the belief that “diversity is best,” many positive outcomes have resulted from including more women at the corporate level.
For the companies themselves, having women on executive boards simply makes good business sense. Women are a huge group of consumers, employees, employers and shareholders that companies shouldn’t ignore. Women’s interests are best known and represented by other women, who can not only appeal to them but best understand their priorities and concerns.
It has also been shown that having more women on corporate boards improves corporate governance. In May of 2002, a study by the Conference Board of Canada found that more female than male directors pay attention to audit and risk oversight and control, consider the needs of more categories of stakeholders, and examine a wider range of management and organizational performance. The findings also revealed that 72% of boards with two or more women conduct formal board performance evaluations, while only 49% of all-male boards do.
Perhaps most importantly, the presence of women might even improve profits.
A study published in the Harvard Business Review found that firms with women board members were much more likely than companies with all male-boards to be leaders when ranked by revenue or profit.
Although it has not been proven that women are a direct causal factor to improved governance or financial performance, there can be no denying that there is a strong correlation between female numbers on boards and good governance credentials.
Though in Canada many are still cautious to the idea of government endorsed quotas for women on corporate boards, the situation in Norway brings hope to many women in the workplace seeking to finally break that elusive glass ceiling.
And perhaps one day explicit demand for female involvement in corporate boards won’t even be an issue, as women can hopefully be judged truly on their own abilities, and not hindered in any way because of their sex.