Gender Distribution of Board Members in Limited Liability Companies – Where Do We Stand Today?

Gender Distribution of Board Members in Limited Companies – Where Do We Stand Today?

The new rules on gender representation in boards of Norwegian limited companies were added to the Companies Act §§ 6-11 a and b, effective from 1 January 2024. The legislation is accompanied by a regulation on transitional arrangements for board gender composition, which specifies the precise “steps” for implementing gender balance in limited companies (§ 2). Currently, the gender balance requirements apply to companies with operating and financial revenues exceeding NOK 100 million or with more than 50 employees. The rules apply only to boards with more than two members. By July 2028, the threshold will extend to companies with revenues over NOK 70 million or more than 30 employees. The requirements apply exclusively to owner-elected board members, not employee representatives.

As of today, nearly 11,000 Norwegian companies are subject to the current gender balance rules. According to data from Proff Forvalt, only about 85% comply. This means that almost 1,700 companies are potentially at risk of being dissolved due to non-compliance. When the thresholds are next adjusted, approximately 22% of companies are expected to fail to meet the requirements, while just over 20,000 companies will then be subject to the rules.

At the time the preparatory work for the new gender provisions was carried out, boards of Norwegian limited companies consisted of 20% women and 80% men. For the CEO role, 17.3% were women and 82.7% men. Between 2004 and 2009, the share of female board members increased by 2 percentage points, from 15% to 17%. From 2009 to 2022, it increased from 17% to 20%. The Ministry aimed to achieve a “more even” and “substantial improvement” in gender balance on Norwegian boards.

Proff Forvalt’s latest overview indicates that approximately 40% of board members in Norwegian companies are now women. This nearly doubles the 2022 figures and represents the most significant increase in female board members in Norway to date. Analysis of the age distribution shows that the majority of female board members are between 45–59 years old, followed closely by those aged 30–44 and 60–74. There are as many female board members over 75 as there are between 18–29. Interestingly, there are more female than male board members under 17 years of age. The age distribution among male board members shows similar trends, though with generally higher percentages.

The gender balance rules are based on the assumption of 40% representation for each gender within the specified thresholds. For example, a seven-member board can have a maximum of four members of the same gender, while an eight-member board can have a maximum of five members of the same gender. This suggests that the legislative intent of the rules is largely being met. However, approximately 15% of companies currently do not comply, likely involving boards lacking women. In the preparatory work, it was estimated that of the 7,900 board positions that needed to be adjusted to meet the current requirements, 97% would need to be filled by women.

Going forward, it will be crucial for companies to comply with both the current and forthcoming thresholds, which will take effect in 2026 and 2027. Doing so will help achieve the goal of greater gender equality on company boards.