Abstract
In this article, we use a sample of Norwegian quoted companies in the period of 2001–2010 to explore whether the gender quota requiring 40 % female directors on corporate boards changes the likelihood of women being appointed to top leadership roles as board chairs or corporate CEOs. Our empirical results indicate that the gender quota and the resulting increased representation of female directors provide a fertile ground for women to take top leadership positions. The presence of female board chairs is positively associated with female directors’ independence status, age and qualification, whilst the presence of female CEOs is positively related to the average qualification of female directors. Firms with older and better educated female directors are more likely to appoint female board chairs. The likelihood of female CEOs’ appointment increases with the percentage of independent directors and directors’ qualifications, especially those for female directors. Furthermore, the gender gaps with respect to qualification, board interlocks and nationality between female and male board chairs vanishes after Norwegian companies’ full compliance to the quota in January 2008. However, the gender quota has no significant impact on the gender gaps between female and male directors after its full compliance. Our article thereby contributes to understanding how gender quotas, presence of female directors, percentage of female directors on boards and other board characteristics can determine the gender of top leaders of organizations.
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Notes
Leaders have been defined in different ways in the literature. While Adams and Funk (2012) include directors in their definition of leaders, we define them as board chairs and CEOs only.
The deadline for compliance by all public companies was set by the Norwegian government as early 2008.
The Spanish government passed a gender equality law in 2007 obliging public listed companies with more than 250 employees to have at least 40 % of their boards represented by each gender by 2015. Companies reaching the quota would be given priority status in the allocation of government contracts but there were no formal sanctions. Iceland’s government passed a quota law in 2010 obliging publicly owned and public limited companies with more than 50 employees to have a minimum of 40 % of their boards made up of each gender by 2013. The French government passed a bill in 2010, applying various quotas for female directors at different deadlines. Female directors had to represent 20 % of boardrooms by 2013 and 40 % for listed (non-listed) companies by 2016 (2019). The proposed sanctions for non-compliance were that nominations of male directors would be void and fees would be suspended for all board members.
By the end of 2007, there were 414 public limited companies, 224 of which were listed on the OSE.
A potentially better data source for the information on directors is the Norwegian Business Register dataset, which covers board members in all public limited companies annually since 1999. Firms are required by law to report such background information as name, age, gender and nationality (Nygaard 2011). Unfortunately, though, this dataset does not provide information on the independence and tenure of the directors.
We use the natural logarithm of board size to normalize the skewness in the distribution of this variable, which should enhance the estimation effectiveness in the regression analyses. Similarly, we use the natural logarithms of the variables for tenure, age and qualifications.
We test the effects of unidimensioanl level gender diversity and the gender quota in separate models, as the correlation between Gender and Quota is 63 % and significantly positive. For further details of the Pearson pairwise correlation analyses for the other variables, please refer to the Table 6 in Appendix.
Abbreviations
- CEO:
-
Chief executive officer
- NCPCG:
-
The Norwegian Code of Practice for Corporate Governance
- OSE:
-
Oslo stock exchange
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Wang, M., Kelan, E. The Gender Quota and Female Leadership: Effects of the Norwegian Gender Quota on Board Chairs and CEOs. J Bus Ethics 117, 449–466 (2013). https://doi.org/10.1007/s10551-012-1546-5
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DOI: https://doi.org/10.1007/s10551-012-1546-5