Equbusiness book VERSION 28SEPT2023 - Flipbook - Page 83
voluntary guidelines, delineating recommended practices without imposing legal obligations. This is used to
exploit the expressive function of law instead of deterrence function (Mcadams, 2000).
A comprehensive survey of European countries has revealed a predominant inclination towards employing
precise soft law regulations characterized by diverse quota mechanisms (Kang et al, 2022). Nevertheless, it is
noteworthy that the scope and sanctions of these regulations vary significantly across jurisdictions.
7.4. DIFFERENT PERSPECTIVES ON REGULATING GENDER DIVERSITY ON CORPORATE BOARDS
7.4.1. USE OF QUOTA SYSTEM AND QUOTA REGULATIONS
Legislators commonly employ quotas as an efficient and popular method to promote gender diversity on
corporate boards. In this section, we will first examine some of the dominant countries9 rules which encourage
other countries and the EU to regulate this area of law. Then, we will analyze the EU9s Woman on Board Directive.
7.4.1.1. NORWAY
Foremost among nations using the quota system to promote gender diversity on corporate boards is Norway. As
previously emphasized, Norway is the pioneer in enacting laws specifically designed to regulate gender diversity
on corporate boards. These laws establish Norway as a vanguard in shaping regulations aimed at fostering
diversity within corporate boards (Huse & Seierstad, 2014; Seierstad & Huse, 2017; Mensi-Klarbach et al., 2017
;Kang et al., 2022).
Norway9s legal framework for gender diversity is embedded in an amendment to the Norwegian Public Limited
Companies Act. These regulations apply to all public limited liability companies in the country (Norwegian Public
Limited Liability Companies Act § 6-11a). However, it is crucial to note that private limited companies and other
corporate entities fall outside the regulatory purview, rendering them exempt from the obligation to comply with
gender quotas in Norway (Kang et al., 2022). While this restricted scope limits the universal application of gender
diversity quotas to all Norwegian companies, it serves as an instrumental mechanism for setting examples that
have proven increasingly efficacious in supporting gender diversity within corporate boardrooms. A notable
impediment preventing Norwegian legislators from extending gender quotas to all companies is the prevalence of
family-owned corporations. The intervention in the boards of family-owned corporations has been perceived as a
potentially sensitive and delicate matter by Norwegian legislators. A substantial proportion of private companies
in the country are family businesses, where shareholders and the corporate board predominantly consist of
family members (Sjåfjell, 2015). Furthermore, those family businesses have the capacity to affect the Norwegian
economy.
Another noteworthy feature of Norwegian law is the gender neutrality of the mandated quotas. This signifies that
the quotas apply to both men and women. According to the Norwegian Public Limited Liability Companies Act §
6-11a, neither gender can be underrepresented in a manner inconsistent with the stipulations of this provision.
Importantly, these rules are directed explicitly at the boards of directors of public limited liability companies and
do not extend to members elected among employees by employees (Norwegian Public Limited Liability
Companies Act § 6-11a).
It is essential to mention that the determination of quotas depends on the composition of the corporate board:
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In cases where the board comprises 2 or 3 members, the law mandates representation of both sexes.
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For boards with 4 or 5 members, each sex must be represented by at least two members.
