Gender Equality

Report from Norway: Women at the top have less power than men

In Norway, at least 40% of the Board of Directors of any publicly traded company must be women. At least 40% must also be men, by the way — the goal is gender balance and the benefits that brings. Many other steps have been taken in Norway to increase the presence of women in leadership positions, too.

It was therefore disappointing to read a new report demonstrating that there are not yet very many women in the most important corporate positions.

The Oslo office of Burson Marsteller uncovered these results in a new Norwegian study. They reviewed companies traded on the Oslo Stock Exchange. In those companies, a total of 5325 individuals are privy to inside information, including those in leadership positions and on Boards of Directors.

Women occupy 27% of these leadership positions. Or — if we set aside Boards and the effect of the 40% quota — then 23% of the positions are filled by women.

However, women have only 8% of the central decision making positions — CEO, CFO and Head of the Board.

And it’s only 3% of the CEOs who are women. This is roughly comparable to the situation among S&P 500 companies, where in 2011, 3.2% of CEOs were women.

But Norwegians should take no comfort in being on par with the S&P 500. Norway, after all, is the most egalitarian country in the world, according to Almudena Sevilla-Sanz’ recent article on division of household labor in the Journal of Population Economics. How can leadership positions in Norway be so inequitably distributed?

This is not just a social justice problem, it’s a social economics problem. As Burson Marsteller’s Marius Parmann rightly notes, it is reasonable to assume that talent is equally distributed across the groups of men and women. When 90% of the positions are filled from only 50% of the pool, Parmann reminds us, we get an “incorrect use of resources” and inevitably lose value.

In academia the situation is somewhat better, but not much. According to the European Commision’s She Figures 2009: Statistics and Indicators on Gender Equality in Science, 9% of universities in the 27 countries of the EU are headed by women.

The Norwegian report is important. It tells us where we’re at. It motivates us to continue asking whether there are good reasons to believe gender balance improves organizational performance. If we conclude that it does, then our job is to develop new measures that can remedy the current imbalance.

That is going to require a very deliberate effort. How shall we start?

My interest in moving universities towards balance encompasses gender equality, the communication of scientific results, promoting research-based education and leadership development more generally. Read more

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11 Comments

  • NjugunaN says:

    Power and strength in leadership are basically a function of perception. Companies being forced to put women in positions of power will just do their minimum to comply with quotas.

    Such “Quota women” will always find it tough going because nobody respects them, their being qualified for their positions being almost irrelevant!

    Upshot, affirmative action ends up being a “glass ceiling” at the end of the day.

    • Curt Rice says:

      I do appreciate your participation in this debate, especially since you seem to have such different perspectives than me. For example, while perceptions may be part of the story, it seems to me that there’s a lot more behind power. Information is one of the central features of power, and one of the points of this article I discuss is that women in leadership positions have access to less information and therefore have less power.

      Given that there are demonstrable benefits to gender balance in leadership teams, if it’s true as you suggest that companies do only the minimum and women are still less respected, then this simply demonstrates that there’s much more work to be done. I hope you decide to work, too, to try to change these perspectives.

  • We could add “and executive power” to the late mr. Paul Samuelson’s quote “woman are just men with less money”.

    Thank you for adding valuable insights to our study. In order to track future changes we will continously update the study and extend it with an age variable. As woman are in much larger number at the universities today than 15-20 years ago, we may find the woman share increases opposite to age.

    • Curt Rice says:

      Hei Marius — Thanks for your comment, and for your blog entry, and most of all for this study of yours. It was very interesting to read about. Is the actual report somewhere online, or is the blog entry the best source to cite?

      Adding age is important. And while your optimism about large numbers lower in the system eventually giving large numbers higher up in the system is laudable, I think there are pretty significant reasons to think that is unlikely. Or, most specifically, there are reasons to think it would take a very, very long time.

      In a blog entry called “A slow thaw for women,” I wrote the following that you might find of interest on exactly this point:

      In Sweden, for example, 61% of university graduates in 1978 were women. 32 years later, they occupied 17% of top leadership positions. In 2008, 64% of university graduates were women; trend analysis, the report claims, predicts that women will constitute only 18% of Swedish top leaders in 2040.

      Spain has rather different numbers. 32% of university graduates in 1976 were women. In 2010, the Spanish companies in the McKinsey database had 6% of their top leadership positions filled by women. In 2008, the percentage of university graduates who are women had nearly doubled, reaching 60%. The trend analysis predicts that in 2040, 11% of their top leadership positions will be filled by women.

  • You are probably right about the age variable. As far as I remember I think The Economist pointed out similar observations in its November issue on “women and work”.

    The blog entry is the best source to cite. The findings were also presented in the Norwegian Business Daily on January 9th. As we continue to update the data set, no reports have been published yet. We will be happy to share the raw data set with anyone who would like to review it.

  • 2ndnin says:

    I question though whether gender-parity is actually a useful tracker in and of itself. In terms of the losing value side if we consider there to be say 500 major companies each having 3 ‘power’ seats within them then there are 1500 power roles within that group of companies.

    Taking Norway with 5 million inhabitants if we split this 50/50 for simplicity we have 2.5million men and 2.5 million women. To get an ‘incorrect use of resources’ assuming only a single group holds these 1,500 positions then we have to reach a position where the qualifications for that position are such that the number of effective and appropriate candidates in that section of the population are too low. So for the 2.5 million men in Norway’s population roughly 1667 people who could fill each job, if we assume 1 person in 1000 can fulfil the role successfully then the 1,500 posts can be filled easily with a single group without any ‘incorrect use of resources’. If this falls to 1 in 1668+ people then there would be an ‘incorrect use of resources’ and if it rises above 1 in 3,333 then the country would need to outsource so really the question is whether there is an inappropriate use of resources or whether we are aiming for gender parity for other reasons?

    From your other articles (parts 1, 2, 3) it seems that there is a correlation with the having women in leadership roles and success however at the same time the question should be asked if this is socialisation or something else. If it is simply a socialisation issue then successful training of managers should include a more holistic view of management which takes into account the more stereotypically feminine leadership as well as the masculine leadership to form a blended whole which is more effective. It would be interesting to see research as to the effects of the leadership categories when performed with a single (or pair of same presenting gender) manager against a mixed pair of managers who only perform their gender stereotyped management role.

    • Curt Rice says:

      Thanks very much for careful thinking and writing on this. A few thoughts in light of yours. Your reasoning around the “inappropriate use of resources” argument is solid for the case as you sketch it. But if there are really very many more of these jobs and very many fewer formally qualified people, then I think the picture changes. I haven’t worked it out as carefully as you have, but if we think of a professor position as a leadership position (research groups, PhD students, other students, and the administrative life of a university), there are in the Norwegian university system fairly few applicants for any such job. In many cases, just a few, in some cases perhaps 10-20. I wonder if an advertisement for a professor in any field anywhere in Norway has ever elicited 50 applications; I don’t know, but I doubt it. In that case, if there are barriers for half the population (again, massively over-simplifying), then they would be worth eliminating to increase the odds of getting a truly well-qualified person in that position. In other words, while it might be the case that 1 in 1000 could do the job, it’s more often 1 in a few that is considered. And doubling the pool, or even increasing it by 20%, would probably in some cases lead to better hires.
      The socialization point is right, and I think we agree on this one. But one could say the issue doesn’t even become clear until we start studying such things (difference bt. leadership behaviors in men and women), so we need this kind of research to highlight the issue.

  • 2ndnin says:

    If there are 10-20 people applying for the job though and all are qualified opening up the field to make it 20-40 would make little difference in terms of actually utilising resources because there is still massive oversubscription for the position if all candidates are actually qualified. If there were only 1-2 qualified applicants then doubling that number would significantly increase our chances of finding the correct candidate but amongst a field of 10-20 I would think it would be quite dificult to determine who was the most qualified candidate to within even 10% during a round of job interviews. Again the hiring process is very false – it is an interview situation rather than the real job so people do train to be good at this kind of even which throws doubt onto the value of an interview really.

    Socialisation is very important in all of this however it seems to happen a lot earlier in the growing up process than schools can really account for. I can’t remember the reference but I recall recently reading something about a large percentage of STEM students in the US having at least one parent with a STEM type background. By the time kids reach secondary school or University it can be very hard to actually change their perception of courses and life paths because they are already well trained in their current ways of thinking. In the UK at least part of the issue we have seems to be that there is very little exposure to scientific thinking and computer science / engineering at a young age so a lot of people rule themselves out of going down that path. The same is likely true of business and politics – we push a lot of people away from the field and don’t realistically allow cross-disciplinary efforts.

    • Curt Rice says:

      I was in a little group for the EC last year, giving advice for an upcoming ad campaign designed to recruit more girls to study STEM subjects when they get to the post-secondary level. One of the big points of discussion was the age group to target. Should one be trying to influence high school age girls, or elementary school age ones? There was plenty of research trotted out there of the type you indicate, namely that this decision (or, at least openness to the possibility) happens very young.

      • 2ndnin says:

        Doing it late does seem quite pointless, at least anecdotally people get fixed into their expectations quite early. So while part of the issue isn’t pipeline issues it does come down partly towards pipeline issues.

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