Quotas for women on boards: what the research says

Board recruitment – do quotas actually work?

On 19 June 2023 the Norwegian government announced a new rule: at least 40 per cent women on the boards of large and medium-sized companies. The proposal has been met with both enthusiasm and scepticism. But what does the research say?

This post is from August 2023, and some of the content may be out of date.

The history of gender quotas in Norway

Gender quotas on Norwegian boards date back to 1981, primarily for publicly appointed bodies. But it was not until the turn of the millennium that a 40/60 representation began to be considered for private public limited companies (ASA). The quota requirement came into force in 2003, with listed companies given five years to comply.

But did the quotas work as intended? According to Mari Teigen, head of CORE – Centre for Research on Gender Equality, only 5 per cent of board members in ASA companies were women before 2003. This figure gradually increased, but not enough to reach the target of at least 40 per cent. This led to further regulation by the Storting (the Norwegian parliament).

Gender balance in management in today’s business world

According to figures from the CORE top management barometer (Core Topplederbarometer):
- 84.5 per cent of the chief executives of Norway’s 200 largest companies are men.
- 87 per cent of board chairs are men.
- 43 per cent of board members in public limited companies are women.
- In private limited companies, 20 per cent of board members and 17 per cent of CEOs are women.
- Only one in four entrepreneurs is a woman.

Findings from the research

• No effect 

  A 2019 study found that the 2003 quota law had no significant effect beyond board composition, the so-called “null spillover effect”. This means that although more women gained board seats, there were no more female senior executives.
  
  

• Future impact

  Morten Huse, professor emeritus at BI Norwegian Business School, believes many companies may try to circumvent the requirements by dissolving their boards. He points out that a change in company structure could be a real concern.
  
  

• Changes in companies from 2003 to 2021

  Although the number of ASA companies fell from 554 to 229 over this period, it is not clear that this was due to the gender quota requirement. Research indicates that few companies cited the quota law as the main reason for the change.
  
  

• Expertise on boards

  Siri Øyslebø Sørensen, professor of gender and diversity studies at NTNU, argues that there are many qualified women who can serve on boards. The fear that boards will be made up of “mothers and daughters” may be exaggerated.
  
  

• Diversity on boards

  Although gender quotas may improve gender balance, it remains an open question whether boards will become more diverse overall.

While gender quotas in the boardroom have been the subject of debate and research, it is clear that there is a wide range of opinions and research in this area. With the government’s new proposal, it will be interesting to see which direction Norway takes in its pursuit of gender balance in business.

This was a summary of an article in Kilden, which you can read in full here.

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