The accidental feminist

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One winter’s afternoon in Oslo, two middle-aged men bumped into each other on a busy street corner, just across the road from a Burger King. One was Ansgar Gabrielsen, Pentecostal Christian, father of four and then Norway’s trade and industry minister. The other was Alf Bjarne Johnsen, senior political correspondent for Norway’s biggest selling daily newspaper, Verdens Gang, (”The Way of the World”). It was February 21 2002 and, improbable as it may sound, the history of the modern company boardroom was about to be rewritten.

When Johnsen told me about this meeting recently, he took me back to the same intersection - of Grensen and Akersgata, Oslo’s Fleet Street - and pointed down the hill towards Norway’s stolid parliament building, the Stortinget. “I was walking up from there,” he said, and the minister was coming the other way. “He said, ‘I want to see you in my office in a couple of hours. I think I have some big news for you.’ I said, ‘What is it?’” The minister wouldn’t say. The reporter had known Gabrielsen since 1993, when the genial Conservative party politician from Norway’s rural south was first elected to parliament, but he had never seen him behave so mysteriously: “I smelt something big.”

When he got to Gabrielsen’s office later that day, the minister sat down and said he wanted to talk about a serious problem in Norway’s companies: they didn’t have enough women in their boardrooms. There were more than 2,000 board members and a paltry 6 per cent were women. It had been at about that level for years. Past governments had talked of raising it. Business leaders kept insisting the number would go up naturally as more women went into business, but nothing had happened. So he was going to act; he had decided to force Norway’s biggest companies, including those listed on the stock exchange, to make 40 per cent of their board directors women.

Johnsen was stunned. No government in the world had ever forced public companies to do such a thing, not even in dependably egalitarian Norway. And as he said, “It was shocking to hear it from a Conservative.” As Gabrielsen talked, something equally odd became obvious: he hadn’t discussed his plan with anyone else in his own Conservative party or the centre-right coalition government - not even the prime minister. Johnsen’s story appeared on the front page the next day, under the headline: “The Minister of Trade and Industry is Sick and Tired of the Men’s Club: Wants to Force Women into Boardrooms.” It was hard to believe he would ever make it happen.

One can imagine how the media might have treated Gabrielsen’s news in another country, say, Britain. (”Broadroom Blitz!”; “Babes on Boards - or Else!”) Norway, being Norway, had a less excited reaction. “Plea for More Women” said the headline in one story. “Quotas Cause Storm” said another. Businessmen said they’d never find enough women. Businesswomen said the quotas would cause tokenism. Young women in Gabrielsen’s own Conservative party said they were “smart enough to get ahead without the help” of quotas.

But the idea was far from universally condemned, for this was Norway, where feminism often seems to be deeply rooted in the national temperament. Historically, egalitarianism has been widespread, thanks to the lack of an indigenous aristocracy, an influential rural workforce and a united labour movement. Feminism is more recent: 40 years ago, 90 per cent of Norwegian women with small children were housewives and there was only a handful of women in parliament. But the 1960s brought a women’s movement that decided to work within the political establishment rather than outside it. That meant women activists were integrated into party politics very early on, says Professor Steinar Stjerno, a social policy scholar from Oslo University College. “They weren’t as radical as those in other countries, and they had to compromise.” But their impact was significant. The idea that women needed equal political representation took hold. By the 1980s, a law had been passed requiring 40 per cent representation of both sexes on public boards and committees, and political parties began using quotas to get more women elected. As a result, the proportion of women in parliament has been about 36 per cent for most of the past decade - more than twice the world average. (In the 1993 national election, all three party leaders were women.)

When Gro Harlem Brundtland was elected Norway’s first female prime minister in 1981, she was in power for so long and put so many women in cabinet that people used to joke about the boy who once rang her office to ask if it would ever be possible for a boy to grow up to be prime minister. Since then, no prime minister has dared have a cabinet with less than 40 per cent women in it, and the idea of gender equality has become ingrained to the point that a lot of women don’t merely want a seat on the board; they want their husbands in the kitchen. As the female head of a large government department told me conspiratorially one day in Oslo: “We have to get the father back to the home! They do an excellent job!”

Norwegian men are financially penalised if they don’t use their “papa quota” of four weeks’ leave to look after their new babies and there are plans to increase it to 10 weeks. This will be excellent, a businesswoman said over a glass of wine one night, because until employers look at male staff and think “he’s going to disappear when the baby comes”, nothing will really change for women in business.

She has a point: women might have risen steadily to the top of Norway’s political institutions, but they have made little headway in the private sector. On graduation, disproportionate numbers become public servants, nurses or teachers. Only small percentages go into private corporate life and an even smaller number reach the top of it, as Gabrielsen had discovered. To which you might say, so what? It may be important for a parliament to reflect the citizenry, but isn’t a board’s main duty to maximise company profits? As it turned out, Norway’s national assembly did not agree. Despite the misgivings of some in the Conservative party, by the end of 2003, parliament had agreed to adopt Gabrielsen’s quotas.

State-owned companies had to meet the 40 per cent targets almost immediately (most were already close). Public limited companies were given until mid-2005 to voluntarily meet the quotas. If they failed, the law would be implemented formally and, by 2007, recalcitrants would be, in the government’s words, “dissolved by order of the court of probate and bankruptcy”. About 500 companies would be affected, including multinationals such as the energy company Statoil, Norway’s biggest company. Hundreds of men would have to step down.

Gabrielsen had made history. But why had he done it? And would Norway’s companies be able to find enough women to fill all those places?

Under Norway’s constitution, half the cabinet is supposed to belong to the Lutheran state church of Norway. But if the idea was to ensure sober conservatism in the conduct of government affairs, word failed to reach Ansgar Gabrielsen.

He is a bearish man with a tendency to speak in italics. When you walk into his large Oslo office, it is hard to ignore the inflatable version of Edvard Munch’s “The Scream” on his window sill, or the fluffy white toy terrier perched on top of the ministerial television set. The latter was a gift from a business organisation, he said. “It’s a watchdog, to remind me to look after small companies.” I briefly considered telling him they probably wished they had given him a Rottweiler by now, but instead asked why it was that he of all people had come up with a law that a Wall Street Journal editorial writer described as “a farewell to shareholder rights” created by “fetishists of diversity”?

He agreed it looked odd: “I came from the Conservative party, and I’m one of the conservatives in the Conservatives. And I’m from the south. And I was minister of trade and industry [he had since become health minister]. And I was a man. And I’m religious. So everything was wrong.”

It was hard to imagine he had a financial rationale. Norway is hardly a picture of economic anguish: the UN has just ranked it the best country to live in the world for the fifth year running and even if its 4.6 million citizens are heavily dependent on North Sea oil revenue, the Petroleum Fund set up for the day when the oil eventually runs out is already worth more than $180bn.

So was he some sort of accidental feminist? “I didn’t do it for feminist reasons,” he said crisply. “Absolutely not.” Rather, he said, he had been reading studies showing that the more women there were at the top of a company, the better its financial performance was likely to be and, since he was the minister for industry, he was in a position to do something.

That was a curious justification. It is true that some studies have concluded there is such a link between women and performance. Theresa M. Welbourne, of the University of Michigan Business School, studied 534 companies that first listed on the stock exchange in 1993 and found those with women in senior management got higher valuations than their all-male counterparts when they first listed, and higher than average stock price increases in the three years thereafter. Another study of more than 350 Fortune 500 companies, by the American women’s business organisation Catalyst, found that companies with the most women in top leadership positions had a return on equity that was 35 per cent higher than those with the least senior women. European researchers have come to similar conclusions.

But the picture is more mixed when it comes to studies of the effect of female board members on a company’s bottom line: a 2003 survey of Fortune 1000 companies found the more women and minorities on a board, the better a company’s value. But a 1997 study of the 200 largest American companies couldn’t find any significant positive relationship and even found a negative link in some cases. And even if most studies have found a positive correlation, it is not clear whether this is because women cause companies to make more money (perhaps because they have superior management skills or bring a broader perspective to the organisation) or whether better performing companies are more likely to hire women.

All up, this did not look like the most convincing evidence of the need for quotas. Yet Gabrielsen insisted companies could not afford to ignore so many potential directors. Especially when Norway has spent so much educating its female citizens that more than 60 per cent of university-level graduates are now women. This was a better argument, because in many ways Norway’s quotas are a reaction to a profound shift in female behaviour across the globe. Until the last decade of the 20th century, men had always outnumbered women in higher education. Today, female tertiary graduates equal or outnumber men in 21 of the world’s 27 richest countries. This unprecedented pool of educated women has been pouring into the workplace for years: the male doctor is expected to be outnumbered by 2012 in Britain, and 2020 in Canada. The British male solicitor under 40 already is. In the US, women may outnumber men in the workforce in general by 2025.

But one place where men have held fast is in the boardroom. Only about 14 per cent of directors in the 500 biggest companies in the US are women and that figure falls to 10 per cent or less in the UK and most west European countries. As Gabrielsen said, many boards are still “a kind of club”, whose members have studied, golfed or hunted together, and chosen each other for their boards. This didn’t make commercial sense, he said, especially when women made so many buying decisions in a household. But it would never change by itself.

He wasn’t worried what foreign investors might think of the quotas. “If they want to invest in a company where they love to have men everywhere, do it. Do it! For me it’s bullshit. It’s just a crazy argument.” And as for why he didn’t discuss his quota plans with anyone else in the government: “I knew they would say ‘blah, blah, blah, blah’. I was sick and tired of everything I had heard and I decided one day I would make, what do you call it?” He paused and grinned. “A nuclear bomb.”

And as far as some of Norway’s business people were concerned, that is close to what he did.

When Une Amundsen, the self-made founder of the Norwegian office software firm SuperOffice first heard about the quotas, he had one question: where are we supposed to find all these women? The government replied that it had a database with the CVs of more than 3,500 suitable women. The country’s main employer organisation had another. But Amundsen didn’t think that going to some kind of “escort service on the web” was any way to find a board member.

”Are you married?” he asked me when we spoke in the spring. Barely waiting for an answer, he said: “Was he ‘given’ to you? How did you pick him?” It certainly wouldn’t have been from something like a database, he snorted, and it was the same when you picked a board member. “I like to know them. I like to see what they’re doing, their experience and how they handle things.” He had one woman on his four-member board and no intention of adding another. “If we are forced to take more, I will take my daughter or wife,” he said. “Like I said, I like women, but not by law.”

Some companies couldn’t easily increase the size of their boards to meet the quotas. Before long, disputes began to break out over which men would have to step down to make way for women. Inside the consumer goods conglomerate Orkla, for example, a prolonged tussle ended last May, when Peter Ruzicka, a 40-year-old retail executive with a strong background in brand building and international trade, was replaced by a new director with a Harvard MBA, a background in McKinsey - and high heels.

Other men never made it as far as the board. When the outspoken financial publisher and editor, Trygve Hegnar, bought nearly a third of Gyldendal, one of Norway’s biggest publishing houses, he tried to get a seat on the board. Other directors opposed him, saying Hegnar’s vision for the company was out of sync with the other shareholders and, in any case, if the company did appoint another director it should be a woman. A woman duly went on the board. “She doesn’t own one single share and I own a third of the company!” said Hegnar when I visited him in his Oslo office, high on the city’s outskirts.

At 61, Hegnar is a cheerful controversialist. On his office wall he had framed a poster that was put up around the city a couple of years ago when he was fighting against a journalists’ strike. “Give Hegnar a kick in the balls,” it said.

Testicular matters aside, even some of the strongest supporters of boardroom quotas admit Hegnar has a point when it comes to their effect on shareholder rights. “The deadly wrong thing about what they are doing is that they are taking out men who own companies,” he said. “The board is the executive power of the company, so if you are the owner and you want to execute power in the company then you take a seat on the board. That’s the way it is. I’m not saying that there aren’t a lot of good women out there. There are! But why should they replace the shareholders?” Gabrielsen agreed this might be a minefield, but said owners still decided who went on a board and, besides, companies had had to get used to an older law requiring employee representatives on their boards. Now they would have to get used to more women.

The shareholder rights argument did not move Laila Davoy, the minister of children and family affairs whose department was put in charge of implementing the quota legislation. She was dragging her suitcase to a ministerial car waiting to take her to the airport the day I was due to interview her, and as we drove out of town so she could catch her flight, she explained that as far as she was concerned, the quota law was “a matter of democracy”.

”Half the adult population today are women. Why shouldn’t they be part of this [corporate] sector? The men are the ones who have power in this society and why? Why? I think it’s obvious that they should share this power with competent women.” But were there enough of these competent women? Of course, she said. Some men were sitting on 10 or 20 boards. Did they have enough time to be competent?

But was the government really going to close down a company just because it didn’t have enough women? There wouldn’t be any need, she said. “Companies have to obey lots of laws already. As they fulfill all their other requirements, so they will abide by this law.”

Back inside Davoy’s ministry, the director general of the department, Arni Hole, was equally dismissive of complaints about the quotas. A lot of it came from “pathetic small men”, she said, folding a pair of long black-suited legs under her desk. “You would think they were small boys,” she added, breaking into a shrill whine that made her sound like Ricky Gervais in The Office: “’What’s going to happen to us? Ooh.’” It’s all about redistributing power, she said. “No one does that willingly, no, no. Not even women give away power.”

But the interesting thing about Norway’s boardroom legislation is that so many men have given away power. By July this year, the number of women on boards had risen from 6 per cent in 2002 to just under 16 per cent. Among listed companies the figure rose to 22 per cent, giving Norway the highest percentage of female board members in the world, according to one global survey of more than 1,800 companies.

Sixteen per cent is still a long way from 40 per cent, however, and, at the time of writing, members of the new centre-left coalition government elected in last month’s Norwegian election were still planning to introduce the quotas. Indeed Karita Bekkemellem Orheim, one of the Labour party’s leading voices on gender equality, has already talked of extending the law to cover private companies not currently affected by the quotas.

Meanwhile, the number of women joining the country’s boards is likely to keep climbing, because men such as Andrew Armour are quietly putting them there. Armour is executive chairman of Revus Energy, a Norwegian oil company that decided to list on the Oslo stock exchange earlier this year. Eager to complete the listing before the summer slowdown (and while oil prices were still high), he had barely eight weeks to find five suitable people for the new board.

When someone first told him about the quotas for female directors, he said “No, it’s a joke. Come on, you’re kidding.” Then he thought: “This is crazy. Where am I going to find women who know about the petroleum industry, without conflicting duties, who are available?” Unsure that the quotas were serious, he began talking to a prominent Norwegian industrialist who had been recommended to him. “We met on the ski slopes in Norway. We had a cup of coffee together and he was a terrific guy, absolutely terrific.”

He wrote an e-mail about the meeting to his Revus partners last March, saying how much he liked the man, but added: “His only drawback is that he is not female!” By that time, Revus’s lawyers had told him the quotas were indeed serious and it would be a mistake to list without a sufficient number of women. As Armour wrote in his e-mail, that meant: “We have to rack our brains for a set of female candidates for the board!”

A headhunter came up with a list of women for him, but none looked suitable. Also, he was very keen to get the prominent Norwegian lawyer, Knut Brundtland, son of the former prime minister Gro Harlem Brundtland and a member of 15 boards. “I asked him whether he was willing to undergo a sex change operation,” said Armour, “because then he would be a shoo-in. He said why didn’t I get the operation?” As the weeks passed, he said he began to realise that he didn’t need women with as much experience in oil as he and others on the board had; it might be better if they knew their way around Oslo’s financial world and had experience in corporate strategy. He eventually found two suitable women. The float was a success (10 times over-subscribed) and Armour insists the process was not at all burdened by having to find women directors. “I still would have had to have screened the candidates pretty carefully because you’re going to live with these folk for the next three years,” he said. “The fact that they had to be females didn’t make any difference.”

The quotas proved trickier for Statoil’s Anne Kathrine Slungard, chair of the nomination committee that selects members for the oil giant’s board. For one thing, the board had bigger things to worry about: it lost its chairman and chief executive in 2003 after it became embroiled in an Iranian bribery scandal. Also, as Slungard said, the company was so big that “you can’t put a trainee on the board.” But to meet the quotas, a new woman director had to be found earlier this year. The company commissioned an analysis of future challenges to identify the skills board members would need (international business experience turned out to be a priority). Headhunters were appointed; a global search began, ending up in New York where Statoil found Ingrid Wiik, president and CEO of the multinational pharmaceutical company, Alpharma. She was appointed to the board in June.

For Slungard, the process was revealing. She discovered what she called “a new generation” of highly qualified professional women, aged between 35 and 45, who could easily take board positions, even if they were often more reluctant to accept them than men. “The women are out there. It’s just a question of finding them - and making them say ‘yes’.” And the quotas themselves? She was a Conservative party member, she said, but she had realised that as long as companies were never forced to change, “men will still keep choosing other men”.

Whatever the eventual outcome of Norway’s push for gender equality, the boardroom quotas are already changing the lives of hundreds of Norwegian businesswomen. One night in Oslo, I went to a gala dinner for graduates of something called Female Future, a programme set up by the Confederation of Norwegian Business and Industry (NHO in Norwegian) in response to the government’s legislation - which the confederation opposes - to train women how to be board members. The NHO calls the process “pearl diving”, because participating companies have to search through their workforces to pluck suitable, but possibly hidden, women for training. More than 400 women have completed the programme since it started and nearly a quarter have had offers of a board seat at a major company.

The dinner was an unusual event. Bras, knickers and other laundry items had been hung on makeshift clotheslines strung around the room and the lighting rigging on the ceiling was arranged in the shape of three interlocking female symbols. Instead of the tables being numbered, each had a name such as “intelligence” or “creativity”. I was on “strength”, surrounded by Female Future graduates who turned out to have mixed views on the quota legislation that had led to the programme’s creation.

Lisa Cooper, the director of customer services and support in Norway for the Thales global electronics giant, was on the first Female Future course and has since joined the board of Simrad Optronics, a large Norwegian company that makes equipment such as military night sniper sights.

The idea that her appointment might have been triggered by the quota law did not bother her. “It’s been a fantastic ride for the average woman in the last two years because, whether or not it was a law, it just raised people’s awareness of the fact that maybe there is something there,” she said. “And for some of the good ol’ boys club I think they realised, ‘maybe we should do something’.”

But Siss Aagedal, the finance director of a large paper company in southern Norway, screwed up her nose at the mention of quotas. “It’s not my preference, absolutely not. It’s the qualifications that count.” As one of Female Future’s star graduates, Aagedal has joined so many boards, even ones not subject to quota legislation, that she finds it hard to keep track of them all. “I have six board positions now,” she told me, listing one at an insurer, another at a garbage collection company, another at a small orthopaedic firm. She paused. “Actually, I have seven,” she said, remembering that she is also on the board of a research company. She thought she might have to slow down. “I don’t want to have 50 board positions. I have a full-time job.”

As the evening wound to a close, I spotted Ingvild Myhre. She didn’t need any boardroom training: she was already on five boards, including the energy giant Norsk Hydro and was president and CEO of the data communications company ID Gruppen.

Since the quotas were introduced, her phone rings more often with offers of directorships, but she doesn’t like the law. “I have always liked to be elected to a board because I’m qualified for the job, not because I’m a woman,” she said. “That’s the feeling of a lot of women here but we can see from the figures that the number of women joining boards is still very small, so what do we do?”

What indeed? For all the controversy over Norway’s quotas, they have led to one of the most significant increases in female boardroom representation anywhere in the world. Elsewhere, despite the steep rise in the number of female graduates, and regardless of how many studies show that companies with more senior women perform better, the boardroom seems destined to remain a male stronghold for many more years.

So what is to be done? Back in Britain, where the most recent figures show nearly a third of FTSE 100 companies have all-male boards, Meg Munn, the minister responsible for much of the government’s gender equality policies, says she would not support quotas. “It can be counter productive. I wouldn’t want to see a situation where a boss said ‘We’ll give her the job then we’ve filled our quota.’” Does she think British companies should put more women on their boards? She seems to. “Diversity makes business sense. It’s key to better decision-making, skilled staff, better governance and better companies.”

So how did she think companies should get more women on their boards? “I think in a lot of cases companies simply need to think differently about how they recruit and retain staff,” she said. A better use of headhunters “may help”. Re-thinking traditional work practices, such as rigid rules about work times “may also help”. “Instead of thinking about reasons why they shouldn’t employ a woman, companies should look at her CV and see the reasons why they should.”

This is a reasonable position. The trouble is that reason alone, as history repeatedly shows, often produces little change. If Norway’s experience proves anything, it is that boardroom quotas can be contentious and sometimes messy. For experienced women directors, they can also be irritating. But they may be the only way thousands of talented women will get a say in how the world’s companies are run any time soon.

Statoil’s Anne Kathrine Slungard had a better way of putting it: “We have a saying in Norwegian: sometimes you have to eat some camels. They may be hairy and they may be dirty, but if you want to get anything done, you have to do it.”

Pilita Clark is deputy editor of the FT Magazine.

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