The main investment arm of Sweden’s Wallenberg family, Investor AB, said it won’t support government plans to goad corporate boards into hiring more women.
“The owners have the right to appoint the boards they regard as right,” Boerje Ekholm, chief executive officer of Investor AB, which oversees $34 billion in assets, said in an interview in Stockholm. “That is a very important principle for me and I am therefore opposed to quota regulation.”
The company, which at the end of last year held assets equivalent to 5.9 percent of Sweden’s gross domestic product, says there are better ways of achieving gender equality than through government regulation. The comments mark a setback for Finance Minister Anders Borg, who last month warned businesses he would impose quotas if female board membership doesn’t rise.
According to Ekholm, businesses are already taking steps to improve gender equality without government intervention.
“I support equality,” Ekholm said. “The industry has a responsibility to develop companies and make sure we broaden the recruitment base so we create more equal boards over time.”
Sweden has more women in the labor market than any other European Union country and about 45 percent of elected officials are female. Yet women are still outnumbered three to one on corporate boards, Statistics Sweden data show. Only 22 percent of senior managers at the country’s 25 biggest companies are female.
Borg said Feb. 12 Swedish companies must “much more carefully take a look at recruitments to boards this spring and at the annual general meetings and we must then see that improvements are being made.” If there is “another year of things moving sideways,” Sweden will “gradually move towards being forced to launch quota legislation,” he said.
A 2006 study from Sweden’s Uppsala University compared the 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 for female executives, has arrived at a similar conclusion for Fortune 500 companies.
Companies drawing on different sets of skills from different corners of society are more likely to do well, Ekholm said. Calling himself “a great advocate of increased equality,” Ekholm says including more women “leads to better companies and better organizations, meaning that you create value for the owners.”
Women make up 21 percent of Investor AB’s board. Of the company’s core listed holdings, they account for 29 percent of board memberships. Investor AB is working “very actively” to increase that number, Ekholm said.
He compares building a good corporation to creating a successful soccer team.
“You don’t say that you will recruit 11 Zlatan Ibrahimovics,” Ekholm said, referring to the Swedish soccer star. “I don’t want 11 forwards.”
Investor AB, which holds stakes in some of Sweden’s biggest companies, including Ericsson AB, Electrolux AB and Saab AB, is also the main owner of SEB AB, Sweden’s fourth-largest bank and the largest Nordic currency trader. SEB CEO Annika Falkengren said last year quotas can be demeaning for women. As the only female CEO among Sweden’s biggest companies, Falkengren said in an interview published in December “it’s awful to feel that you have been asked to do a job just because there is a quota.”
Government quotas that force companies to put more women on boards, such as Norway’s requirement of at least 40 percent and similar measures in Spain and France, aren’t the answer, she said.
“It is a relevant question if it takes too long and if we need regulation to make it happen,” Ekholm said. “But I think it’ll happen anyway as it’s evident that companies work better with equal boards and then owners will be rather selfish and want to do something.”