Requirement for gender balance on Norwegian boards

On 22 December 2023, the Norwegian Parliament decided to introduce gender balance requirements for a number of Norwegian boards, as proposed by the government in June 2023.

The law means that a number of companies above a certain size must have at least 40 % of each gender represented on the board.

The new rules

The new rules introduce requirements for gender balance on the boards of Norwegian companies of a certain size. This means that companies with more than three board members can have a maximum of between 67 and 50 per cent of board members of the same gender (depending on the number of board members). There are separate requirements for the gender composition of deputy board members, and for board and deputy board members elected by and among the employees.

Considerations for and against the new rules

For:

Development is moving far too slowly
In the long term, gender equality and diversity in the business world will create more innovation, a better working environment, better decisions and increased value creation.
The requirement can help to raise awareness of gender composition, and will be particularly effective where companies do not choose to work towards better gender representation on their own initiative.
Legislation can help to change attitudes in society, and broader representation at board level can help to ensure diverse recruitment from low level upwards in the company.

Against:

Who should sit on a board is primarily a question for the owner or owners.
Interference in private autonomy and owners' right to manage ownership as they see fit.
Strong intervention in the owners' right of control over their own companies and investments.
Placing new burdens on businesses.

Which companies are covered by the rules

Those who have such requirements under the regulations today.
Limited companies, co-operatives or housing associations that either have more than NOK 50 million in total operating and financial income, or more than 30 employees. The same applies to general partnerships
that only have legal entities as participants.
Co-operatives or housing associations with more than 500 members/shareholders.
Foundations that are commercial organisations or whose purpose is to distribute funds, or where a public authority elects at least one board member.

Phased introduction of the rules

The first stage must be fulfilled by 31 December 2024:

Companies with more than NOK 100 million in total operating and financial income

The second stage must be fulfilled by 30 June 2025:

Companies with more than 50 employees
Co-operatives and housing associations with more than 500 members or co-owners
Foundations that are commercial organisations or that have distribution as their purpose, or where a public authority elects at least one board member

The third stage must be fulfilled no later than 30 June 2026:

Companies with more than 30 employees

The fourth stage must be fulfilled no later than 30 June 2027:

Companies with more than NOK 70 million in total operating and financial income

The fifth stage must be fulfilled by 30 June 2028:

Companies with more than NOK 50 million in total operating and financial income.

Nearly 13,000 new board representatives needed

The new rules will mean that several companies will have to make changes to the composition of their boards. The extent of this work will vary between companies, for example depending on whether they regularly review
board composition and changes to the board, what expertise they need and what their network is like.

The Ministry of Trade and Industry's calculations show that there will be a need to recruit almost 13,000 new board representatives up to 2028. When the first stage is introduced next year, there will be a need for around 6,600
new board representatives, most of whom are women.

What should you do now?

Start by checking whether your organisation is covered by the new rules. If you are covered, a good tip is to start searching for suitable and competent board members and recruit them as early as practically possible.

Requirements for gender balance on Norwegian boards