Business: Boardroom Blues

Posted Sunday, September 14, 2003; 13.05BS
The business world — where real power increasingly lies — is resolutely male in every European country. Disparities plague the reports of average earnings and the lists of most-powerful people. Only 3% of the top FTSE companies in the U.K. have female executive directors. Even in Sweden, where women make up 45% of parliament, half of all private companies still have all-male boards, and only 2% of CEOs are women. In Norway, 65% of the largest 600 companies have not a single woman on their boards and the chief administrators of all but the smallest law firms are all men, as are 98% of private board chairmen in sizeable companies. "The figures are lousy," says Grete Faremo, executive vice president of Storebrand ASA, a large financial-services company in Norway. "It's not easy to understand." Nor is it easy to accept for many politicians. Both Norway and Sweden are pressuring companies to fill their boards with 40% women, and the threat may crystalize into law next month in Norway.

Last year, Norway's coalition government threatened to require companies to make their boards 40% female if they did not do it voluntarily. A year later, the percentage of women on boards had only increased 2.2%, to 8.5%. In June, Ansgar Gabrielsen, Minister of Trade and Industry, and Laila Daavoey, Minister of Children and Family Affairs, decided to make good on the threat by introducing legislation specifying that if Norway's 600 biggest companies do not voluntarily achieve the 40% level by Aug. 15, 2005, the government can mandate it without further parliamentary action. Companies in violation after a grace period would lose the state certification they need to operate. "Otherwise, it will take another hundred years," says Daavoey. Parliament is expected to pass the bill after returning from vacation on Oct. 1. Last November, Swedish companies received a similar dare from Minister for Gender Equality Margareta Winberg, who vowed to require 25% boardroom quotas. Within a year, the proportion of female board members had nearly doubled, to 11%.

"We think it's wrong on principle," says Per Kveim, CEO of Software Innovation ASA, a Norwegian firm with $70 million in annual revenues. "The authorities can't be controlling who sits on the board. It's the owners who have to decide, and they have more important criteria than gender." Fair enough. But the government has long intervened in corporate decisions in Norway. And there is evidence that women can increase a company's value. Theresa M. Welbourne at the University of Michigan Business School studied stock value and earnings growth following initial public offerings in the U.S. and found that IPOs were significantly more successful when the companies involved had senior female executives. "Having women in the top management team results in higher earnings and greater shareholder wealth," she concluded. So why, in egalitarian havens like Norway and Sweden, haven't more women risen to positions of power in business? Could part of the explanation be that they don't want to?

In the U.S., women tend to climb higher in corporations than their European counterparts. And that discrepancy starts early — at London Business School, 37% of American applicants are women versus only 22% of British applicants and 18% of French. That may be for the simple reason that business is much more lucrative in the U.S., says Trond Petersen, a Norwegian professor of sociology at the University of California in Berkeley who has written extensively on gender equality in the U.S. and Europe. High-powered jobs in both the U.S. and Europe demand long hours, but they pay less in Europe, so the calculation between family and work tilts toward family in Europe, Petersen believes. Others say men are simply better at self-promotion. "Men push themselves forward," says Frank de Grave, a leader of the liberal VVD party in the Netherlands. "Women have to be asked."

"Blaming" the women is controversial, of course. But Petersen is quick to point out that career choices are steeped in cultural expectations, educational norms and other complicated realities. Women are still far more likely to take time off to raise children or work part time — both of which tend to reduce chances for promotion. And in parts of Europe, traditional roles may be inadvertently perpetuated by generous family-leave policies. "Family-friendly policies can sideline people," says Ilene Lang, president of Catalyst, a U.S.-based nonprofit that advances women in business. "For many years, people here said the barriers for women were that we didn't have the family-leave policies they have in Europe. But if you look at which barriers women now cite, it's more about stereotyping, a lack of experience, a lack of access."

Anne Wilkinson, 48, knew her career as a European Commission lawyer was on "skid row" when she decided to work part time in 1992 so she could take care of her four children. "There is an unwritten rule at the Commission that you simply do not get promoted if you work part time," she says. After taking a leave of absence in 1995, and returning to full-time work in 2002, she quit last month. She felt she was wasting her time. "I don't know many women who think it's an achievement to sit in an office and fly around the world for 80 hours a week," she says. "I think most women regard it as imbecilic." She says she has found a truer sense of achievement in raising her children: "That's where you have real power and influence over the future. "

Social forces and personal choices have, for many women, become more powerful than the groping boss. "If you don't pick up your children from school, people wonder what's wrong with you," says Mariana Burenstam Linder, a mother and a member of three company boards. "I know many women who feel it's just too high a price to pay." That pressure has not changed with the rules of hiring — nor has the pressure on men to be breadwinners. "I don't think men enjoy not seeing their friends and family any more than women do," says Charlotte Semler, an Oxford graduate who worked for an investment bank in London before starting a lingerie business in 2000. "But I think there is a larger subset of men willing to make the sacrifice than there are women." A 2000 study of engineers in Britain and Sweden by Val Singh at the Cranfield School of Management showed that most women at the top had spouses who were retired or working at home. Of course, these insidious problems can be seen as a victory of sorts. After all, there are many parts of Europe where they would be considered a luxury — where the leering, lurching boss is alive and well. The question is whether nuanced expectations and norms will prove any less tenacious.

Previous | 1 | 2 | 3 | 4 | Next

	Against Their Will [July 28, 2003] Reports of the forced sterilization of Roma women echo Slovakia's dark past — and may cloud its future Meg Whitman [June 29, 2003] Most e-commerce start-ups died long before they got old. But eBay skipped adolescence entirely — heading straight to profitability — thanks largely to this seasoned corporate executive. Madam President [Dec. 18, 2002] Serbian parliamentarian Natasa Micic takes on her country's top job Sisters In Hell [Dec. 2, 2002] Sexual assault is rampant in France's crumbling housing projects. Now a gang-rape victim has broken the silence A Clash of Family Values [Sep. 15, 2002] Katherina Reiche's appointment as Stoiber's campaign family expert raised eyebrows — not least in his own party Search all issues of TIME Magazine