Why do people always refer to Norway as “progressive?” I would almost call them “backward” or “impulsive. ”
In 2006, the Norwegian government imposed a law that would require “State-owned companies are already obliged to comply and now have 45% female representation on their boards.” Since 2003, it was voluntary, but nothing happened.
The Norwegian equality minister, Karita Bekkemellem, is now threatening firms that don’t comply with closure.
“From January 1 2006, I want to put in place a system of sanctions that will allow the closure of firms,” she said. “I do not want to wait another 20 or 30 years for men with enough intelligence to finally appoint women. More than half of the people who have a business education today are women. It is wrong for companies not to use them. They should be represented.”
Did it work? Well, no.
A study by Amy Dittmar, associate professor of finance at the University of Michigan’s Ross School of Business and her colleague Kenneth Ahern “found that when a board had a 10% increase in the number of women, the value of the company dropped. The bigger the change to the structure of the board, the bigger the fall in returns.”
“The constraint imposed by the 40-percent women quota-led firms to recruit women board members that were younger and had different career experiences than the existing directors,” says Dittmar.
What’s the answer? Forced compliance? Does it really matter? The majority of small business owners are women. We end up making our own board and supplying the products that women want. Perhaps the answer is simply making our own way instead of waiting for someone to make it for us.