Sweden’s largest companies are ignoring warnings from Finance Minister Anders Borg that he will impose quotas unless they move quickly to rectify gender imbalances on their boards.
The female ratio on the boards of the 22 Sweden-based companies on the Nasdaq OMX Stockholm 30 (OMX) index that have elected or proposed their 2014 boards rose to 28.9 percent from 27.6 percent in 2013, according to Bloomberg calculations based on company statements. Only 7 of the 22 companies improved their female ratios, while 14 left them unchanged and one saw female representation decline.
Borg in February said that Sweden’s companies need to look more carefully at board recruitment this spring and that he would be forced to enact quotas, following countries such as Norway, if things continued to move “sideways.”
“I want, of course, to take a look at what the overall picture of these figures look like and then we must of course relate to that,” Borg said when confronted yesterday with the data after a meeting at parliament in Stockholm. “But there must be a quick increase.”
Companies including Assa Abloy AB, Electrolux AB and Skanska AB left, or proposed to leave, their female ratios unchanged this year. Among others, Nordea Bank AB and SKF AB added women while ratios at Atlas Copco AB and SEB AB (SEBA) gained after they cut board sizes by removing males. Svenska Handelsbanken AB’s ratio fell to 20 percent from 27.3 percent.
Borg now plans to sit down with Arne Karlsson, chairman of the Swedish Corporate Governance Board, and have a talk on “how this problem can be dealt with,” he said.
Karlsson declined to comment on whether the current ratio is sufficient, saying the governance board is currently working on establishing “a common view” on gender equality on boards.
Borg has been trying to lead by example. Some 49 percent of the members of the boards of companies wholly or partly owned by the Swedish state are women while 41 percent of the chairmen of those boards are female, government data shows. The state targets a ratio of at least 40 percent at its companies.
Swedbank AB and Nordea have the most equal boards among the companies in the survey. Their ratios improved to 44.4 percent from 40 percent and 33.3 percent, respectively. Steelmaker SSAB was the company with the lowest ratio at 11.1 percent, unchanged from a year earlier.
Sweden has more women in the labor market than any other European Union country, according to government data, and about 45 percent of elected officials are female. Yet women are still outnumbered three-to-one on corporate boards, Statistics Sweden data show. Among the 25 biggest companies, only 22 percent of senior managers are female, according to Bloomberg calculations.
Other countries have introduced quotas that force companies to have a certain ratio of women on their boards, such as Norway’s requirement of 40 percent and similar measures in France and Spain. Investor AB Chief Executive Officer Boerje Ekholm and SEB CEO Annika Falkengren are among executives that have spoken out against quotas. Sweden’s Wallenberg family holds major stakes in both companies.
“The owners have the right to appoint the boards they regard as right,” Ekholm, whose Investor AB (INVEB) oversees $34 billion in assets with stakes in Ericsson AB, Atlas Copco AB, Saab AB and Electrolux, said in an interview in March. “That’s a very important principle for me and I’m therefore opposed to quota regulation.”
Investor AB proposed an unchanged ratio of 23.1 percent ahead of its annual general meeting in May. SEB’s board for this year, approved by shareholders in March, has female representation of 36.4 percent, up from 33.3 percent.
Research suggests it makes economic sense to add women. A 2006 study from Sweden’s Uppsala University compared earnings of 48 companies and found that those with more female board members delivered higher profits and showed greater potential to increase earnings than companies with no women on their boards. Catalyst, a New York-based research and advocacy group, has arrived at a similar conclusion for Fortune 500 firms.
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