Norway’s government reached an agreement with the business lobby and unions to force large and medium-sized companies to phase in 40% female representation on their boards within five years.
(Bloomberg) — Norway’s government reached an agreement with the business lobby and unions to force large and medium-sized companies to phase in 40% female representation on their boards within five years.
The plan, which the cabinet says is the first of its kind globally, will initially cover about 8,000 companies next year and expand to encompass about 20,000 companies with more than 30 employees by 2028, the government said on Monday. Firms with more than 100 million kroner ($9.4 million) in total operating and financial income will be covered initially, a threshold that will drop to include those with income in excess of 50 million kroner.
The improvement in the gender balance in board rooms has been too slow, according to the Labor-led minority government, growing from 15% female representation two decades ago to just 20% now. Norway isn’t part of the European Union, where the European Parliament last November passed a law requiring 40% of non-executive directors to be female or 33% among all directors.
“This is a turning point for equality work in business in Norway,” Trade and Industry Minister Jan Christian Vestre said in the statement. Business and unions “share the government’s impatience, and I am glad that together we have found a means of action that can speed up the work.”
Norway ranked third in last year’s Global Gender Gap Report by the World Economic Forum, trailing only Iceland and Finland.
The government’s calculations show there will be a need to recruit almost 13,000 new board members by 2028. The requirements will also apply to cooperatives or housing associations with more than 500 members, as well as business foundations.
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