Norway was the first country to introduce mandatory gender quotas for corporate boards, and there was already plenty of evidence by 2012 that increasing female representation on boards results in corporate financial decline – here. A piece in today’s Times:
One of the world’s biggest investment groups will start to vote against companies with fewer than two women on the board this year, it announced yesterday.
Norway’s $1.3 trillion sovereign wealth fund said it would vote against directors on board nomination committees at such companies. It said it wanted them to set gender diversity targets if they had less than 30 per cent women on their boards.
“What we want to see is better representation of women on the boards,” Carine Smith Ihenacho, the fund’s chief governance and compliance officer, said. “Diversity is good for the board because it brings better perspective, it is better for decision making and increasingly important for the legitimacy of companies.”
The fund, which takes some of the country’s oil revenues and invests them for future generations of Norwegians, typically owns about 1.5 per cent of all listed shares worldwide.
Smith Ihenacho said it would start to target large and medium companies in Europe and the US. She named no names but Aston Martin Lagonda, the British carmaker, could be an early target, Reuters reported.
Aston Martin has only one woman on its nine-member board — Anne Stevens, the former interim chief executive at the parts maker GKN, now part of Melrose.
Susan Vinnicombe, former director of the Cranfield International Centre for Women Leaders, applauded the fund’s move. “There is some evidence you need to get to a critical mass of 30 per cent [of women directors on a board] to stop being seen as the token woman.”
Large British listed companies have made progress, with the percentage of women on FTSE 100 boards reaching 34.5 per cent by June last year and on FTSE 250 boards hitting 31.9 per cent.
However, less progress has been made in senior executive ranks and in key non-executive posts such as the chairmanship. Last year, the Norway fund voted against the nomination committees of 16 companies because they had all-male boards, Smith Ihenacho said. One of them was London-listed Domino’s Pizza, fund data showed. It has since appointed two women directors.
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