Monday, 12 May 2008

Directorial debuts

Since the beginning of the year, the boards of Norwegian public limited companies have had to be 40% female. If they don't comply, the state will shut them down. Sound like a crazy idea? Well, it has worked. Norwegian company boards now have the highest number of female directors anywhere in the world. Perhaps Britain should consider introducing a similar initiative.

The law was the brainchild of an unlikely feminist icon. Former businessman Ansgar Gabrielsen, 52, was a Conservative trade and industry minister when he announced the law in 2002. "I could not see why, after 25 years of having an equal ratio of women and men in universities and having so many educated women with experience, there were so few of them on boards," he told me.

"The law was not about getting equality between the sexes; it was about the fact that diversity is a value in itself, that it creates wealth. From my time in the business world, I saw how board members were picked: they come from the same small circle of people. They go hunting and fishing together, they are buddies."

Today many directors I've spoken to say boards have become more competent. Board recruiters have been forced to look beyond their immediate circles of friends and colleagues. The pool of candidates has widened, so you have more chances of getting good directors. And since you have people with more diverse backgrounds, you have a multiplicity of opinions and approaches at board meetings, which leads to better decision-making.

The law has focused people's minds on diversity. Instead of endless talking-shops about breaking the glass ceiling, people have had to think practically about how to have more women in top executive positions.

It has given rise to other initiatives too. The confederation of Norwegian enterprise (NHO) which had started a programme called female future, to put female board candidates in touch with company owners, has now launched another initiative, called ethnic future. The aim is to promote more men and women from ethnic minorities to executive positions. Many women who took part in female future were also offered top management positions, not just directorships. Company owners saw their CV in the programme's database, thought they would be good for their companies, and offered them jobs.

In the UK, only 11% of directors of FTSE 100 firms were female in 2007. How long do we have to wait until the generations of experienced women that have been working in business for decades get to these positions? The debate often focuses on what women should do more to get the seats: they should get more experience; they should spend more time at work; they should cultivate more networks.

Aside from the fact that that women are already doing that, this argument is focusing on the wrong group of people. The debate should be about board recruiters. Why do they pick only men? Change doesn't happen naturally. It always needs to be provoked with bold initiatives. They are always decried at the beginning, and then they are taken for granted.

Gabrielsen did exactly that. He announced the quota law without consulting his party leader or the prime minister. His party, the Conservatives, at first protested but then fell into line. The leftwing parties had not other choice but to follow suit. Meanwhile, the business community, which at first was up in arms, eventually took the pragmatic approach and complied with the law. None of the directors I spoke to thought quotas are a good idea per se. However, they thought they were necessary to bring about change. Perhaps it's time Britain does the same.

No comments: