Sweden Declines to Legislate Boardroom Gender Quotas

Sweden Declines to Legislate Boardroom Gender Quotas

Last week, Sweden’s parliament rejected a plan to impose a gender parity quota on corporate boards by fining listed companies where women make up less than 40 percent of directors, Agence France-Presse reported:

The leftwing government announced in September that it was drafting the legislation, but the centre-right opposition and a far-right party, which together hold a majority in parliament, told parliament’s law review committee on Thursday that they would not support the project. “The current gender distribution on the boards of listed companies is not satisfactory. However, the committee thinks a more even gender distribution should be encouraged through other means than legislation,” parliament summarised on its website. …

Women hold 47.5% of jobs in Sweden, and 32% of board positions in listed companies – higher than the 23% average in the European Union, but below the European commission’s goal of 40% by 2020 for major European companies. The Swedish government had hoped that by 2019 it would have introduced annual fines of between 250,000 and 5m kronor (between £23,000 and £460,000), depending on a company’s market capitalisation.

Norway introduced a 40 percent gender quota for corporate boards in 2003, becoming the first European country to do so. Several other countries, including France, Germany, Iceland, and Spain, have followed suit. Quotas are a controversial method for achieving gender equality in corporate leadership, with some advocates of diversity arguing that they make inclusion a matter of compliance rather than changing mindsets, but even critics of quotas admit that they are effective at improving women’s representation on boards.