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'Gender quotas would benefit Sweden's corporate boards'

The Local · 8 Mar 2011, 13:51

Published: 08 Mar 2011 13:51 GMT+01:00

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There are many studies that show the benefits of corporate board diversity. Companies with more women on their board outperform their rivals, says former UK trade minister Lord Davies.

Citing a recent study, Davies explains that companies with more women on the board achieve 42 percent higher return on sales, 66 percent higher return on invested capital and 53 percent higher return on equity.

One conclusion that can be drawn from the study is that having a board which represents different views, different experiences, and different skills has a positive effect on profitability. It's at the interface of these elements where a positive dynamic and learning occurs.

One way to increase the diversity of a corporate board is through bringing more women—and the different perspectives they provide—to the table.

Women have different experiences than men because, well, they know more about what it's like to be a woman. They can thus provide valuable input on issues relating to other women. And research has shown that most buying decisions relating to families are made by women. That's an excellent feature for a corporate board member to have – an understanding of how the target customer group thinks!

Another positive trait women can bring into the boardroom is their more holistic approach to problem solving, which isn't exclusively focused on the bottom line.

Women in Sweden are also very competent and well trained in their fields, with 60 percent of Swedish women having studied at universities and colleges.

Thus, it's no excuse for owners and nominating committees to simply say "we can't find any women for the board" – they are out there to be sure. The trick is finding them.

Unfortunately, many structural hurdles remain in the board recruitment process which can result in many qualified women being excluded from the process and, ultimately, too few women on corporate boards in Sweden.

Often, potential board members are found among the personal friends of current board members. And since women have not traditionally prioritised networking in the professional sphere, this has left them at a disadvantage in the recruiting process.

As a consequence, women often don't have the networks needed to be considered for board positions. Nomination committees are also often made up of men, who then select their friends, colleague, or acquaintances from school.

Another requirement many place on potential board members is past experience as a CEO, something in which women are lagging. Only about 11 percent of CEOs in Sweden are women. And while owners can also affect the board recruitment process, there aren't many major shareholders who are women in Sweden today.

Therefore it is important that owners, nominating committees, and headhunters who are looking for qualified women look in new circles and new networks.

Fortunately, things are now starting to change and today there are networks for women seeking directorships, including Women In Progress, which I head, that help connect women board candidates to companies seeking new board members.

But new networks may not be enough to ensure that companies benefit from the diversity brought by boosting the number of women on corporate board. Another measure, which has proven successful elsewhere, is the introduction of quotas that would require company boards to have a certain number of women in their ranks.

In Norway, quotas have given the boards of listed companies a much better gender balance, resulting in boards that are 40 percent women and 60 percent men. France and Spain also have pending legislation on corporate board quotas.

European Commissioner Vivian Reding is ready to take a hard line, threatening to impose quotas from next year if companies across Europe don't improve. In Sweden, however current equality minister Nyamko Sabuni still argues that quotas are not the way to go.

Those who are against quotas argue that owners should ultimately decide who should sit on a company's board and that the decision shouldn't be dependent on a government mandate.

Story continues below…

Of course, it's important to make the company's needs paramount in recruiting board members. But if anything, that is an argument in favour of increasing the number of women board members--and the benefits they bring in terms of new perspectives and skills.

Say what you want about quotas, but it was thanks to the threat of quotas set by former equality minister Margareta Winberg that the proportion of women increased on the boards of listed companies in Sweden from 6 percent in 2002 to 22 percent in 2010.

What's clear, however, is that efforts to bring more women into the boardrooms of Swedish companies are moving slowly. We need to influence both owners and politicians so that they think about diversity and broaden their horizons when it comes to board recruitment.

Hopefully quotas (or the threat they are perceived to be), combined with other efforts to encourage women to join corporate boards, will help Sweden set the pace among other countries in Europe when it comes to achieving a better gender balance in the boardroom.

Margareta Neld is head of Women In Progress, a professional networking and training organisation focused on coaching and professional development for women executives.

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Your comments about this article

20:48 March 8, 2011 by Nemesis
This will be interesting.

At present upon entering a board of directors meeting in Sweden is like walking into a gay mens bar.
11:35 March 9, 2011 by lordsandwich
The end of meritocracy is near, having quotas is not only insulting to women (since the other board members will know they're there not by merit buy to fill the quota) but is also a coercive attack on freedom. A company should choose teh best candidates, irrespectively of sex, gender, race, religion, etc. Positive discrimination is an oxymoron, it's discrimination nonetheless. Besides, are we also going to introduce quotas on areas were women dominate (i.e. teaching)? I don't think so.
16:15 March 9, 2011 by stenhuggaren
The only way to explain the massive surplus of men on the boards of Swedish companies is that quotas already exist and they benefit only mediocre males.

Perhaps we should highlight and put an end to these evident "informal" quotas and work to develop a genuine meritocracy by appointing more and better qualified women. The only way to meet the challenges of globalisation is to appoint on merit and end this old boy's club.

And don't anyone spout that bullshit about the course of time and women need to be patient - nothing happens by itself.
16:26 March 9, 2011 by SarahPalin
This is plain sad, and of course its a woman (100% feminist and probably a carpet muncher) complaining.

The position in any company and any job should be based on merit, not what is (or isn't) in the candidates pants.

This is appalling and insulting to women who actually work hard and thus reach their respective positions.
20:11 March 9, 2011 by Taxlady
What is a carpet muncher? My dog eats carpets.

Quotas are for the desperate. When women are ready to sit on boards, they shall do so but social engineering the situation is wacko.

being a femininst is ok but a humanist is better. Women are not on boards for different reasons. One is corporate culture, two is they have babies and do not have the same time allocation to work as their male colleagues do. They have a choice but are subject to different constraints than men.
22:43 March 9, 2011 by Beavis
spot on lordsandwich ...the real problem here is the "typical" Swedish mentality, although thankfully many companies are opening their eyes to promoting the best person for the job, rather the one thats been there longest (and may be useless at the job) they also need to have more open hiring policies, that way more women will get into senior positions 8as will people who are better at the job) The Harry Enfield charecter "nice but dim" signifies the typical Swedish board memeber
23:08 March 9, 2011 by SarahPalin

"Quotas are for the desperate. When women are ready to sit on boards, they shall do so but social engineering the situation is wacko."

Completely agree. If a woman is more qualified than a man for a certain position she should get it, but a lot of nutjobs (see my last comment) would rather ramrod women up there than wait... in their eyes "its for the greater good" to show men and their evil penises.

"They have a choice but are subject to different constraints than men. "

True, and because of this they are sometimes not the right person for the job. But try telling a "true, die hard feminist" that...
06:38 March 10, 2011 by för30årseden
This puts the onus on the wrong people. Swedish women are not starting enough companies. That's why they are not on the boards. The people on the boards look like the people that started the company.

How many companies has Ms. Neld started? Women should be held accountable for not starting more companies. Until Ms Neld rises up to her responsibilities and starts a company, she should not be allowed to work in other fields. She should be required to meet her quota for starting companies! Other women can't get board positions because Ms Neld has not met her obligations.

It would be nice to allow Ms Neld to solve the problem on a purely voluntary consensual basis, but sometimes old habits die hard. Ms Neld continues to cling to her traditional gender roles of whining and complaining about men and waits helplessly until a man can create a position for her.
09:04 March 10, 2011 by lux_interior
I assume that Ms. Neld will also insist on quotas in other male dominated professions.

For example:

20% women to operate heavy machinery

20% women apprehending dangerous criminals

20% women working in underground mines

20% women on the battlefield

Otherwise, one might think that Ms. Neld is not out to achieve true equality but is actually just out to grab the best jobs and award them to her cronies.
17:01 March 10, 2011 by SarahPalin
"Otherwise, one might think that Ms. Neld is not out to achieve true equality but is actually just out to grab the best jobs and award them to her cronies. "

No, it just cannot be that. That would mean some women are manipulative, conspiring, two faced b!tches... so it just can't be that!
02:36 March 11, 2011 by Jannik
This is what the brave new world of the totalitarian feminist state looks like.

The state will against your will, make sure that your business receives all the "benefits of diversity"

Affirmative action for women, gays, muslims and the retarded, is what the new world order dictates.

Its going steep down hill for the politically correct west.
18:39 March 11, 2011 by tadchem
I fail to see how staffing decision made on ANY basis other than competence can result in a net benefit to the organization above and beyond that which would be incurred simply by selecting the most competent candidate.
15:52 April 19, 2011 by CokoSwede
I fuuucking hate Sweden
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