A study of Norway’s quota reforms has rebuffed one of the biggest criticisms for quotas — that they would see under qualified women take executive roles in order to “fill seats”.
Despite being one of the most progressive countries in terms of gender equality with a wage gap of 14% and sitting third in the World Economic Forums for opportunities for women, in 2000 just 5% of Norway’s public board members were women.
So in 2003, Norway passed a law that required public company boards to fill 40% of its seats with women. Although there was significant resistance to this reform (384 of the 563 publicly traded companies went private to avoid complying) by 2007 this goal was reached, and it’s not just women who are reaping the benefits.
According to the new study from NBER, the country’s 40% gender quota for the boards of public companies hasn’t just increased the number of women on boards, it’s also increased the quality of the female candidates.
The study, Breaking the glass ceiling? The Effect of Board Quotas on Female Labor Market Outcomes in Norway, investigated the effect of the 2003 reform on the qualifications of board members.
As the study authors point out, the reform not only improved the representation of female employees at the top of the well-paying roles, women appointed to boards following the reform were actually more qualified than their predecessors.
“Previously untapped networks of top business women were activated by the policy,” the authors wrote.
The study also found that the female candidates were actually more educated than their male counterparts, with women, on average, completing an extra half year of education, while men’s education didn’t change at all during the reform period.
And the gap between men and women with MBAs “essentially disappeared” after the quota reform, suggesting that women in the boardrooms post-reform have skills that are closer to those of the men they work with.
These patterns appear inconsistent with the claims of many companies that would be forced to appoint under-qualified females to boards, the study authors say.
The change also helped shift the gender wage gap when it comes to board member earnings, which could be attributed to higher qualifications. This means boards became more equal not just based on the number of men and women sitting at the table, but also in terms of the calibre of these individuals.
And another bonus for women? The study observed a rising trend of women with kids following the reform, with the number of women with children being appointed to boards rising from 75% pre-reform to 83%.
But despite these positive changes, the study points out that while quotas may have a positive effect on getting more women on boards, overall they have not led to an increase in the number of female executives, reduced the gender pay gap or seen an overall shift towards more family-friendly workplace policies.
As Marianne Bertrand, one of the study authors told the New York Times, board quotas alone might not be the policy engine for rapid change for women in business.