Director General Arni Hole The Royal Ministry of Children, Equality and Social Inclusion, Norway:

Transcription

1 1 Director General Arni Hole The Royal Ministry of Children, Equality and Social Inclusion, Norway: Women means business; why and how Norway legislated gender balance on the boards of listed companies Intervention in the Public Hearing arranged by the Committee on Women s Rights and Gender Equality, European Parliament Brussels, October 27 th 2010

2 2 Madam chair, Distinguished members of the European Parliament, Ladies and Gentlemen; First of all, let me thank Eva-Britt Svensson and Rodi Kratsa- Tsagaropoulou for this initiative and invitation to participate in the hearing of today. I want to convey the greetings of my Minister Mr. Audun Lysbakken to the FEMM Committee. He would certainly enjoyed having been here today, addressing you directly. However, in a few days Mr. Lysbakken will go on a 4 months paternity leave, and has asked me to address you. No country (or region) can afford not to acknowledge gender equality as a key to economic stability, innovation and growth. We have strong indications showing this, and I think no one would disagree. The Human Capital is a decisive part of our economy. In Norway Human Capital constitutes 82 % of our national wealth. The Oil constitutes only 7 % in.thus it is important to

3 3 us how we make best use of our hands and heads; and how we can achieve real and substantial gender equality in this respect. Traditional patterns die hard; sometimes it takes legal and radical affirmative actions like quotas to produce results. Let me give you a brief picture of the quotas we have introduced by law, in some areas in Norway: We have a history through several Cabinets of combining traditional work for equal opportunities/equal chances/equal treatment, with radical affirmative actions. The use of socalled quotas started in the 70 s with voluntarily gender balance (40 60% or more) in all the political parties, but one. Today we have parity in the Cabinet, 40 percent women in the Parliament, 38 percent women in the elected Municipal Councils. (For the record, we do not have parity laws as regards political elections in Norway)

4 4 To illustrate what I would call a certain tradition for legal actions requiring gender balance, in Norway: In 1988 The Gender Equality Act was strenghtened with a requirement for 40 % of either sex for all governmental appointed committees, councils, and delegations etc. (My Ministry is responsible for the monitoring) In 1993 the same duty was introduced in the Municipal Act; applying for committees appointed by the elected municipal councils. (The County Governors (18) do the follow-up) In 1993: The Father s quota (by law) within the Parental Leave Scheme was introduced. The weeks are reserved for the father and are not transferable to the mother. With other words; it is Choose or loose. (From July 2011 the father s quota will be 12 weeks of a total period of 47/57 weeks. The measures are handled by the Norwegian Welfare Authority) The father s legal quota has contributed to a mental change in the business community and among the fathers and mothers.

5 5 Taking care of your children is the normal and expected thing to do. In 2003: Four different company laws were amended with a requirement of 40 % of either sex of the companies elected board of directors. This regulation was enforced for the Public Limited Companies (PLC s, often listed on the stock exchange) January 2006 with a period of transition to January The National Business Register enforces the rules and sanctions may apply; a company may be dissolved by court if not complying or have a considerable fine. (For the 3 other types of companies; the wholly State owned, the inter-municipally owned and the large national companies governed by special laws, the amendment was enforced by January 1 st By 2006, after a transition period of 2 years, they were all in place) We did this because in 2002, women were almost totally absent in the board rooms of the PLCs. Only 7 % of elected members were women; today the score is 40.2 %. Next to nothing had happened the last ten years before 2002 as to the recruitment of able women. The state of the art was quite

6 6 embarrassing for Norway s reputation as a fore-runner regarding gender equality. We had invested billions educating our daughters as much as our sons. Equal number of women graduated from universities and colleges around 2000; in law and increasingly within economics. Their ongoing exclusion from corporate boards and top management in private sector - so important to society - just didn t make economic sense. Nor democratic or moral sense. It was a matter of return of investment and a decent societal development. The legal proposals (2003) created a lot of heated discussions in the media and in the general public debate. However, this was a golden window of opportunity to attract new and untraditional stakeholders to the fore ; to discuss gender equality in all aspects. We succeeded in doing just that. The new legal requirements were proposed by a conservative cabinet and endorsed by the opposition, but one party. It

7 7 was truly bi-partisan and passed by large majority in Parliament. However, this same Cabinet waited two years before enforcing the requirement of gender balance for the PLC s, expecting that these companies would sort it our themselves, with a sleeping law eventually to be enforced. But there was no real increase in the number of women on these boards during the following 2 years. When the present Cabinet took office in October 2005, the enforcement was immediately taken to the King for approval (from Jan.1 st 2006 with 2 years of transition). Several top Norwegian business leaders say today that they were opposed in principle to quotas, but believe the law has been effective and are happy with the results. Fears of not finding enough qualified women to fill board seats proved unfounded. The quota is simply a tool to display women`s competence, not a goal in itself. All candidates to board positions, including of course the female ones, are nominated by an election committee set up by the General Assembly in a PLC, and it is for the General

8 8 Assembly to elect the board members from a short list. To those who say that quotas are wrong, competence should rule, I would state: Does anyone really believe that an election committee would look for incompetent candidates? Or that a responsible General Assembly of shareholders would elect incompetent persons? (According to a new study by the Norwegian Institute for Social Research (Institutt for samfunnsforskning, ISF) the women joining corporate boards were just as qualified as the men, in terms of education and professional experience. Women were recruited in the same manner as men, mostly through professional networks. Further; 60 percent of male board members questioned said there had been no major changes to board operations since the law took effect, but there were some improvements such as more discussions and new perspectives. ) In business, quotas are used only where there is a broad spread of shares (PLC s)or where the State or Municipality own the

9 9 companies; these should mirror the population through democratic elected bodies. That is why we amended the law governing the many thousand, small municipal companies with a gender balance requirement in Norway has not used quotas for elections to the boardrooms of the privately owned companies (mostly SME s, but some quite large). These privately owned companies have today appr. 17 to 18 per cent women elected to their boards. We do not apply radical affirmative actions for top management jobs or any other type of jobs. However, we have mild positive discrimination in our Gender Equality Law (if two persons have the same competence in the competition for a certain job, you ought to choose the one from the underrepresented gender at the workplace or the specific level of administration). Norway still has a way to go regarding gender balance in topmanagement. In the state sector women hold 27 per cent of the

10 10 top positions and 17 per cent on an average - in private sector. We hope to see more of a positive spill-over effect from the increased number of women on boards, to real gender balance in corporate management jobs. Being a board member is a stamp of approval. It makes women more visible and more eligible for other positions in economic decision-making. Praise those who should be praised: The corporate sector does operate successful recruitment programs such as Female Future (The Main Business Federation)and Futura (The Financial Sector Employers Fed.), in order to create a competence pool from where to elect women to boards and for competition to corporate management top jobs. Both are excellent programs. They were, interesting enough, initiated after the Parliament had voted pro quotas. Of course, enterprises as well as public sector, have many mentor-adept programs, diversity goals and targets with accompanying measures, etc.

11 11 There are two major reasons for why we needed affirmative actions like quotas: 1. Fundamentally, a moral base: Equal opportunity for all independent of your gender. It is about democracy and representation. Quotas may be necessary to ensure equal outputs. 2. Secondly, sound economics! As I mentioned earlier our human capital is vital. A modern, competitive economy needs all talents, the best heads and hands, regardless of gender. Modernity demands diversity. If you combine equality policies with modern, gender neutral family laws, ample parental leave and fathers quotas, full coverage of early childcare-places to an affordable price and flexibility in work life for parents with sick children, I can highly recommend the use of quotas. It pays off in economic terms, ensures a sound diversity in economic decision-making, and paves the way for breaking

12 12 the gender-segmented labour market. Thus also vital to equal pay for work of equal value. Let me underline that quotas is not a quick fix to achieve gender equality. In fact, if quota laws are to be effective, certain other conditions have to be in place, like the welfare measures I have mentioned above. The women have to be visible in the labor market; as a pool of competence. The men and fathers have to come home. The success in Norway may lead someone to believe that mission is accomplished. It is not. Let me mention a few challenges that we face : The wage gap between women and men per hour for work of equal value a gender divided labour market both vertical and horizontal (reproducing a gender pay gap) a high number of women in involuntarily part time jobs

13 13 the issue of how schools and pre-schools socializes boys and girls, how inequality through stereotyping often are reproduced the challenge of engaging boys and men more in the equality project; we know equality is a win-win situation for men and boys domestic violence (The violence attacks at all levels of society, irrespective of ethnicity of social class; women and children are especially vulnerable for domestic violence) The EU strategy as well as the hearing of today are important steps for creating a new and vital debates on these issues, defining Europe s future. Norway will continue the valuable co-operation with the European Commission, European Parliament and the EU member states. We promise to feed the European debate with relevant information and experience of mutual interest, to our European partners. New research results of the effects of gender balance on boards are coming in this winter and next year; we will be happy to share these results with you.

14 14 We remain strongly committed to our common efforts to increase the level of gender equality in all sectors of society in order to - have more freedom for every individual; being man or woman, boy or girl - improve our economy and our welfare - fight cultures, traditions and stereotypes reproducing inequality and unproductive gender roles - engage the youth of both genders; EU s Youth on the move is an excellent framework for that Talents and creativity are divided evenly among the genders. The new EU-iniative Innovation Union is designed to produce 3,7 million new jobs in the coming years and gives a wonderful window of opportunity for gender equality. As EU commissioner Maire Geoghegan- Quinn states: If we are not able to create innovation in EU, our economies will suffer and weaken, and we will loose ideas and talents.

15 15 Be sure to include gender equality and all your talents in this remarkable initiative. Legal actions like quotas could make a difference! Thank you!