Skip to main content

The Gender Quota and Female Leadership: Effects of the Norwegian Gender Quota on Board Chairs and CEOs

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.

This is a preview of subscription content, access via your institution.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7

Notes

  1. 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.

  2. The deadline for compliance by all public companies was set by the Norwegian government as early 2008.

  3. 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.

  4. By the end of 2007, there were 414 public limited companies, 224 of which were listed on the OSE.

  5. 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.

  6. 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.

  7. 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

References

  • Adams, R., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 64, 291–309.

    Google Scholar 

  • Adams, R., & Funk, P. (2012). Beyond and glass ceiling: Does gender matter? Management Science (Forthcoming).

  • Ahern, K. R., & Dittmar, A. K. (2011). The changing of the boards: The impact on firm valuation of mandated female board representation, working paper.

  • Asch, S. E. (1951). Effects of group pressure upon the modification and distortion of judgement. In H. Guetzkow (Ed.), Groups, leadership and men (pp. 177–190). Pittsburgh, PA: Carnegie Press.

  • Asch, S. E. (1955). Opinions and social pressure. Scientific American, 193(5), 31–35.

    Google Scholar 

  • Bear, S., Rahman, N., & Post, C. (2010). The impact of board diversity and gender composition on corporate social responsibility and firm reputation. Journal of Business Ethics, 97(2), 201–221.

    Article  Google Scholar 

  • Bilimoria, D., & Piderit, S. K. (1994). Board committee membership: Effects of sex-based bias. Academy of Management Journal, 37(6), 1453–1477.

    Google Scholar 

  • Brammer, S., Millington, A., & Pavelin, S. (2007). Gender and ethnic diversity among UK corporate boards. Corporate Governance: An International Review, 15(2), 393–403.

    Article  Google Scholar 

  • Brammer, S., Millington, A., & Pavelin, S. (2009). Corporate reputation and women on the board. British Journal of Management, 20(1), 17–29.

    Article  Google Scholar 

  • Burgess, Z., & Tharenou, P. (2002). Women board directors: Characteristics of the few. Journal of Business Ethics, 37(1), 39–49.

    Article  Google Scholar 

  • Burke, R. J. (1997). Women on corporate boards of directors: A needed resource. Journal of Business Ethics, 16(9), 909–915.

    Article  Google Scholar 

  • Byrne, D., & Griffitt, W. (1973). Interpersonal attraction. Annual Review of Psychology, 24, 316–336.

    Google Scholar 

  • Carter, D. A., Simkins, B. J., & Simpson, W. G. (2003). Corporate governance, board diversity, and firm value. Financial Review, 38(1), 33–53.

    Article  Google Scholar 

  • Chatman, J., & Spataro, S. (2005). Using self-categorization theory to understand relational demography-based variations in people's responsiveness to organizational culture. Academy of Management Journal, 48(2), 321–331.

    Google Scholar 

  • Davies, M. (2011). Women on boards. Department of Business, Innovation & Skills Report.

  • Derry, R. (2002). Feminist theory and business ethics. In R. Frederick (Ed.), A companion to business ethics (pp. 81–87). Oxford: Blackwell.

    Google Scholar 

  • Eagly, A. H., & Carli, L. L. (2003). The female leadership advantage: An evaluation of the evidence. The Leadership Quarterly, 14(6), 807–834.

    Article  Google Scholar 

  • Erhardt, N. L., Werbel, J. D., & Shrader, C. B. (2003). Board of director diversity and firm financial performance. Corporate Governance: An International Review, 11(2), 102–111.

    Article  Google Scholar 

  • Fiss, P. C. (2006). Social influence effects and managerial compensation evidence from Germany. Strategic Journal of Management, 27(11), 1013–1031.

    Google Scholar 

  • Gibson, D. E., & Cordova, D. I. (1999). Women’s and men’s role models: The importance of exemplars. In A. J. Murrell, F. J. Crosby, & R. J. Ely (Eds.), Mentoring dilemmas: developmental relationships with multicultural organizations (pp. 121–142). Hillsdale, NJ: Lawrence Erlbaum Associates.

    Google Scholar 

  • Glover, S. H., Bumpus, M. A., Sharp, G. F., & Munchus, G. A. (2002). Gender differences in ethical decision making. Women in Management Review, 17(5), 217–227.

    Article  Google Scholar 

  • Granovetter, M. (1978). Threshold models of collective behavior. American Journal of Sociology, 83(6), 1420–1443.

    Google Scholar 

  • Grey, S. (2002). Does size matter? Critical mass and New Zealand’s women MPs. Parliamentary Affairs, 55(1), 19–29.

    Article  Google Scholar 

  • Grosvold, J., Brammer, S., & Rayton, B. (2007). Board diversity in the United Kingdom and Norway: An exploratory analysis. Business Ethics—A European Review, 16(4), 344–357.

    Article  Google Scholar 

  • Hillman, A. J., Cannella, A. A., & Harris, I. C. (2002). Women and racial minorities in the boardroom: How do directors differ? Journal of Management, 28(6), 747–763.

    Google Scholar 

  • Hoetker, G. (2007). The use of logit and probit models in strategic management research: Critical issues. Strategic Management Journal, 28, 331–344.

    Article  Google Scholar 

  • Huse, M., Nielsen, S. T., & Hagen, I. M. (2009). Women and employee-elected board members, and their contributions to board control tasks. Journal of Business Ethics, 89(4), 581–597.

    Article  Google Scholar 

  • Ibarra, H., Carter, N. M., & Silva, C. (2010). Why men still get more promotions than women. Harvard Business Review, September 2010.

  • Ibrahim, N. A., & Angelidis, J. P. (1994). Effect of board members’ gender on corporate social responsiveness orientation. Journal of Applied Business Research, 10(1), 35–40.

    Google Scholar 

  • Kanter, R. M. (1977). Men and women of the corporation. New York: Basic Books.

  • Kanter, R. M. (1987). Men and women of the corporation revisited. Management Review, 76(3), 14–16.

    Google Scholar 

  • Kelan, E. K. (2008). The discursive construction of gender in contemporary management literature. Journal of Business Ethics, 18(2), 427–445.

    Article  Google Scholar 

  • Linck, J., Netter, J., & Yang, T. (2008). The determinants of board structure. Journal of Financial Economics, 87, 308–328.

    Article  Google Scholar 

  • Mainiero, L. A. (1994). On breaking the glass ceiling: The political seasoning of powerful women executives. Organizational Dynamics, 22(4), 5–20.

    Google Scholar 

  • Matsa, D. A., & Miller, A. R. (2011). A female style in corporate leadership? Evidence from quotas, working paper.

  • Mavin, S. (2008). Queen bees, wannabees and afraid to bees: No more ‘best enemies’ for women in management? British Journal of Management, 19, S1, S75–S84.

    Google Scholar 

  • McCabe, A. C., Ingram, R., & Dato-on, M. C. (2006). The business of ethics and gender. Journal of Business Ethics, 64(2), 101–116.

    Article  Google Scholar 

  • NCPCG. (2005). The Norwegian code of practice for corporate governance, issued by the Norwegian Corporate Governance Board (NCGB).

  • NCPCG. (2007). The Norwegian code of practice for corporate governance, issued by the Norwegian Corporate Governance Board (NCGB).

  • Nielsen, S., & Huse, M. (2010). The contribution of women on boards of directors: Going beyond the surface. Corporate Governance: An International Review, 18(2), 136–148.

    Article  Google Scholar 

  • Noon, M. (2007). The fatal flaws of diversity and the business case for ethnic minorities. Work, Employment & Society, 21(4), 773–784.

    Article  Google Scholar 

  • Nygaard, K. (2011). Forced board changes: Evidence from Norway. Retrieved July 13, 2011, from http://www.sv.uio.no/econ/english/research/news-and-events/events/guest-lectures-seminars/Friday-seminar/2011/papers/paper_nygaard.pdf.

  • Oakley, J. G. (2000). Gender-based barriers to senior management positions: Understanding the scarcity of female CEOs. Journal of Business Ethics, 27(4), 321–334.

    Article  Google Scholar 

  • Paton, R., & Dempster, L. (2002). Managing change from a gender perspective. European Management Journal, 20(5), 539–548.

    Google Scholar 

  • Peterson, C. A., & Philpot, J. (2007). Women’s roles on US fortune 500 boards: Director expertise and committee memberships. Journal of Business Ethics, 72(2), 177–196.

    Article  Google Scholar 

  • Pfeffer, J., & Salancik, G. R. (1978). The external control of organizations: A resource dependence perspective. New York: Harper & Row.

    Google Scholar 

  • Ross-Smith, A., & Bridge, J. (2008). “Glacial at Best”: Women’s progress on corporate boards in Australia. In S. Vinnicombe, V. Singh, R. Burke, D. Bilimoria, & M. Huse (Eds.), Women on corporate boards of directors: International research and practice (pp. 101–119). Cheltenham: Edward Elgar.

    Google Scholar 

  • Rost, K., & Osterloh, M. (2008). You pay a fee for strong beliefs: Homogeneity as a driver of corporate governance failure. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1304719. Accessed 13 March 2012.

  • Ruigrok, W., Peck, S., & Tacheva, S. (2007). Nationality and gender diversity on Swiss corporate boards. Corporate Governance: An International Review, 15(4), 546–557.

    Article  Google Scholar 

  • Sealy, R. H. V., & Singh, V. (2010). The Importance of role models and demographic context for senior women’s work identity development. International Journal of Management Reviews, 12(3), 284–300.

    Google Scholar 

  • Sealy, R., Vinnicombe, S., & Singh, V. (2008). The 2008 female FTSE report—a decade of delay. Cranfield: Cranfield School of Management.

    Google Scholar 

  • Seierstad, C., & Opsahl, T. (2011). For the few not the many? The effects of affirmative action on presence, prominence, and social capital of women directors in Norway. Scandinavian Journal of Management, 27, 44–54.

    Google Scholar 

  • Singh, V. (2008). Contrasting positions of women directors in Jordan and Tunisia. In S. Vinnicombe, V. Singh, R. Burke, D. Bilimoria, & M. Huse (Eds.), Women on corporate boards of directors: International research and practice (pp. 165–185). Cheltenham: Edward Elgar.

    Google Scholar 

  • Singh, V., Terjesen, S., & Vinnicombe, S. (2008). Newly appointed directors in the boardroom—how do women and men differ. European Management Journal, 26(1), 48–58.

    Article  Google Scholar 

  • Storvik, A., & Teigen, M. (2010). Women on board—the Norwegian experience. Berlin: Friedrich Ebert Stiftung.

    Google Scholar 

  • Tajfel, H., & Turner, J. C. (1986). The social identity theory of intergroup behaviour. In S. Worchel & W. G. Austin (Eds.), Psychology of intergroup relations (pp. 7–24). Chicago, IL: Nelson-Hall.

  • Teigen, M. (2011). Gender quotas on corporate boards. In K. Niskanen (Ed.), Gender and power in the nordic countries—with focus on politics and business (pp. 87–110). Oslo: Nordic Gender Institute.

    Google Scholar 

  • Teigen, M. (2012). Gender quotas on corporate boards: On the diffusion of a distinct national policy reform. In M. Teigen & F. Engelstad (Eds.), Firms, boards and gender quotas: Comparative perspectives, comparative social research (pp. 115–146). Bradford: Emerald.

    Chapter  Google Scholar 

  • Terjesen, S., Sealy, R., & Singh, V. (2009). Women directors on corporate boards: A review and research agenda. Corporate Governance: An International Review, 17(3), 320–337.

    Article  Google Scholar 

  • Torchia, M., Calabro, A., & Huse, M. (2011). Women directors on corporate boards: From tokenism to critical mass. Journal of Business Ethics, 102, 299–317.

    Article  Google Scholar 

  • Towns, A. (2003). Understanding the effects of larger ratios of women in national legislatures: Proportions and gender differentiation in Sweden and Norway. Women and Politics, 25(1–2), 1–29.

    Article  Google Scholar 

  • Tsui, A. S., Egan, T. D., & O’Reilly, C. A., III. (1992). Being different: Relational demography and organizational attachment. Administrative Science Quarterly, 37, 549–579.

  • Turner, J. C. (1978). Differentiation between social groups: Studies in the social psychology of intergroup relations. In H. Tajfel (Ed.), Social categorization and social discrimination in the minimal group paradigm (pp. 235–250). London: Academic Press.

  • Vinnicombe, S., Sealy, R., Graham, J., & Doldor, E. (2010). The female FTSE Board Report 2010.

  • Wajcman, J. (1996). Desperately seeking differences: Is management style gendered? British Journal of Industrial Relations, 34(3), 333–349.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Mingzhu Wang.

Appendix

Appendix

See Table 6.

Table 6 Pearson pairwise correlation analysis

Rights and permissions

Reprints and Permissions

About this article

Cite this article

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

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-012-1546-5

Keywords

  • Gender quota
  • Gender diversity
  • Female Board Chair
  • Female CEO
  • Board of directors