Saturday, October 27, 2012

Business Boards: Move over Old Boys Networks, here come the Golden Skirts and Gold Sacks

Leah Eichler
More and more we have to look to Europe for moral leadership, rather than to north America. And moral – as well as good business – guidance comes to us from Norway.

Leah Eichler, the founder of Femme-o-Nomics, a networking and content portal for professional women, draws our attention in today's Globe& Mail to the ironical comparison of Republican Mitt Romney's clumsy reference to binders full of women and the strides being taken in Norway to improve the quality of the governance of its corporations.

It seems that little Norway grasped the bull by the horns and actually did something to diminish the democratic (and moral) deficit on the boards of directors of its major corporations:

One approach to quickly changing corporate culture is to use quotas. The mere mention of quotas can whip many North American executives into a frenzy, but the impact on business culture can be dramatic.

Consider Norway, which led the way in quotas. Before 2002, when the law mandating quota on corporate boards was proposed, the number of women on boards of publicly traded Norwegian companies was about 5 per cent. That skyrocketed to 40 per cent in 2008 and, the change spurred a profound impact in business culture, according to Morten Huse, a professor of organization and management at BI Norwegian Business School in Oslo.

In his research, Dr. Huse found that only a few years after the quota law took effect, the old boys’ network had been replaced by two other groups he dubbed the “golden skirts” and “gold sacks.”

The golden skirts represent professional women who making a living from being independent members of multiple boards; the multiboard men are “gold sacks” who represent independent investors that are not part of the old boys’ club, Dr. Huse said.

“The golden skirts do not constitute a network. Interlocking directorates hardly exist between them, and the women hardly meet outside the boards,” he said. “The multiboard members today are the golden skirts and gold sacks, and the old boys’ network is not very visible any more on corporate boards.”

Norwegian companies now earn bragging rights by doing the moral thing and putting some balance on the gender composition of their boards.

Eichler points out that the European Union is right now wrestling with legislation to require better gender diversity on boards of European companies:

This week, a European Union initiative to legislate a quota for corporate boards to include women as 40 per cent of their members was postponed until November, and will likely be watered down. That prompted EU commissioner for justice, Viviane Reding, who pushed the initiative, to tweet: “I will not give up.”

Please don't give up, Ms Reding: help lead these obtuse male-dominated boards  of directors into the promised land of equality for women. Let's give their wives and daughters – and all women – the chance to prove that they, too, can guide companies.

After all, women have the right to be incompetent leaders just as men have:

As Ms. Sweeney puts it, “We’ll know we have equality when we have as many incompetent women in senior positions as we have men.”

Right on!

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