Women at the Top

5 March 2021

Norwegian requirement for 40% female directors has yielded better boards

Norway currently tops the European statistics for gender-balanced corporate governance, with France and the UK in second and third places. (Source: Gender Diversity Index, europeanwomenonboards.eu).

Many factors explain why Norway has made great strides with equal opportunities, and gender quotas for company boards is one. Despite the progress, however, the Norwegian labour market remains very divided along gender lines. Four out of every five CEOs is a man – and nine out of 10 nurses are women.

Gender quotas on public-sector boards were introduced to Norway in 2004, and extended to private companies planning for a stock market listing (public limited companies) two years later. The requirement was that women should hold a minimum of 40 per cent of board seats, with companies which failed to meet this proportion threatened with being wound up.

Owner perspective

Norway has many small family-owned businesses. A majority of these belong to men. As a major owner, the Norwegian state also makes a clear mark on the domestic scene. Directors are almost always non-executive and largely independent of the company’s management.

Trust between owners and directors is important. Historically, owners have chosen directors from within their own network, since it is easier to trust people you already know. These networks are homogenous. Boards drawn from them generally work effectively, but risk missing out on important perspectives.

The 40% women requirement has increased the awareness of the expertise desired and the contributions directors make. This is considered a very positive consequence of the quota regulations.


The need for renewable energy, for example, has shifted huge investments from coal and oil to solar and wind power. Digitalisation has created radical changes in companies' development and the competitive position and will continue to affect all sectors.

Major changes call for non-traditional thinking, and curiosity about how other sectors overcome their challenges is particularly important along with a sense of urgency and solid understanding of financial risk. Having directors of both genders as well as different ages and backgrounds – nationally and internationally and from various sectors – will be necessary in order to widen perspectives and make the right strategic choices.

Female boardroom candidates

Holding a directorship is not a right, but an opportunity to contribute required expertise. During the first few years with gender quotas, we saw some poor solutions – female directors with a combination of high self-confidence and low relevant expertise, and enterprises which invited women on in order to fill their “quota” without wanting them to make an active contribution. Such things are rarely seen today.

Generally speaking, bottom-line responsibility and thereby executive experience are necessary to contribute effectively on a board. Norway has far more men than women in leadership roles, which means that the pool of female candidates with relevant experience remains smaller than for men.

But big variations exist between sectors. So, when putting together capable boards which also meet the need for gender balance, an overall view must be taken of expertise and efforts are needed to identify where scope exists for a good selection base.

“Younger” sectors, such as technology, media and telecom, have a more balanced gender distribution and thereby more women with solid management experience who amply provide the expertise required of a director. This contrasts with traditional industry, for example, where the pool of women with similar management expertise remains smaller.


Good boardroom contributions emerge from relevant expertise, strategic insight, understanding of roles, commitment and a personality able to exert influence and collaborate.

Some people argue that being “quota'd in” is unequivocally negative, and that quotas weaken the authority of women on the boards. We believe gender quotas ensure that highly competent women are invited to serve and give able females opportunities to contribute. If the starting point has been that male owners chose directors from networks of friends and acquaintances, the quota system has been both a necessary and an effective tool for ensuring diversity. We argue that it also ensures the best possible value creation.

In our experience, the quota rules have contributed to owners adopting a more analytic approach in assessing the board’s overall expertise and contribution. The requirement for 40 per cent women has thereby definitively made owners aware of able female directors. Our hypothesis is that the boards also end up with more capable male members.

Hild Kinder
Benedikte Stiff
Partners, Norway


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