The Hindu Business Line : Would our men like the Norway model?

THERE has been more than enough media attention on the issue of independent directors. Predictably, many companies were found napping, even as the Clause 49 requirement closed in on them.

But quite surprisingly, women seem to have missed an opportunity to demand a share of the board pie. If the Finance Minister could usher in gender budgeting, why shouldn't the Minister of Company Affairs make an offer on gender in corporate governance? That can be the question, going by developments in Norway, where the government is wielding the stick to get women their due place on boards.

`Rules regarding gender balance within boards of Public Limited Companies' is the title of the latest press release on http://odin.dep.no, of Norway's Ministry of Children and Equality, headed by Karita Bekkemellem. "The Government has decided that the rules regarding gender representation in public limited companies shall be implemented as of January 1, 2006," it begins. Companies registered before that date get two years to comply with `the requirements of sex representation', and "all new companies must follow the rules in order to be registered".

One learns that Norway is `the first country in the world' to demand gender balance within the boards of public limited companies. It was in December 2003 that they had a law in place stating that privately owned public limited companies would be given rules to elect a board where there should be a minimum number of both sexes in the board, approximately 40 per cent. "This rule was to be implemented if public companies did not comply within two years. By July 2005, only 68 of 519 companies fulfilled the requirements of the rules. 16 per cent of the board members were women," narrates the Ministry's press release, justifying the need for intervention.

Imminent threat, therefore, is that during spring 2006, the Norway Government will propose an amendment to the law, to give the Government legal authority to take action, which could include dissolution on `substantial social considerations'! "We expect that companies will fulfil the requirements of the law and that problems relating to forced dissolutions is of a theoretical matter," observes the communiqué.

The Gender Equality Act of Norway stipulates that enterprises subject to a statutory duty to prepare an annual report should give an account of "the actual state of affairs as regards gender equality in the enterprise", and "of measures that have been implemented and measures that are planned to be implemented in order to promote gender equality and to prevent differential treatment" in contravention of the Act. Catch up with a page on `Gender distribution in education and the workforce' on www.norway.go.tz, and also the views expressed on http://timworstall.typepad.com/timworstall.

"Informal quotas have existed since 1981, when the country's first woman Prime Minister, Gro Harlem Brundtland, took office," noted `The Chief Executive' (www.findarticles.com) in November 2002. One learns that Norwegian women hold two out of five government posts, and that the European average for women in boardrooms is only 2 per cent.

"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," is a quote of Bekkemellem cited on http://business.guardian.co.uk.

On January 5, Equal Opportunities Commission of the UK (www.eoc.org.uk) came up with shocking numbers based on the latest `Sex and Power' survey: That equality between men and women will take: "20 years in the top management of the civil service; 40 years at the director level of FTSE 100 companies; 40 years in the senior judiciary; and up to 200 years - another 40 elections - in Parliament." Wonder what our numbers would be!

EOC survey noted with dismay, "Women make up just 9 per cent of the senior judiciary, 10 per cent of senior police officers, 13 per cent of editors of national newspaper," and 11 per cent of directors in FTSE 100 companies. Four out of five part-time workers were women, often "in jobs below their potential, partly because of the dearth of flexible working at senior levels," and women made up "almost half the workforce," said the report.

In India, Companies Amendment Bill, 2003, had spoken of public company having `such number of women directors, as may be prescribed' in Section 252 of the Companies Act. On this, N.R. Sridharan, corporate law expert, says, "Although such a suggestion was made, recommendations of the Irani Committee were silent on the issue. Accordingly, the Concept Paper on the new company law too had nothing about the representation of women on boards. We may not expect any amendment on that front in the near future."

No way, therefore, that we'd have the Norway model of boardroom governance for women here?

E&OE@TheHindu.co.in

More Stories on : Corporate Governance | Gender | Errors & Omissions Expected

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
TELK bags orders worth Rs 50 crore

JK tyre care centre at Angamally

Centre to accept accounting panel's recommendations — Likely to notify AS 1-27 of ICAI

Ruia group recruiting senior execs for Dunlop

Essilor India acquires 50 pc in GKB Rx Lens

Would our men like the Norway model?

Steel PSU executives to go on mass leave on Feb 2

Volvo mulls separate plant for buses

Sanak Mishra is Mittal Steel's Jharkhand unit CEO