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January 29, 2010

Reason 1001 Not to Imitate Europe..

They don't have the good sense God gave a gerbil:

Arni Hole remembers the shock wave that went through Norway’s business community in 2002 when the country’s trade and industry minister, Ansgar Gabrielsen, proposed a law requiring that 40 percent of all company board members be women.

“There were, literally, screams,” said Ms. Hole, director general of the Equality Ministry. “It was a real shock treatment.”

Even in this staunchly egalitarian society — 80 percent of Norwegian women work outside the home, and half the current government’s ministers are female — the idea seemed radical, if not for its goal, then for the sheer magnitude of change it would require.

Back then, Norwegian women held less than 7 percent of private-sector board seats; just under 5 percent of chief executives were women. After months of heated debate, the measure was approved by a significant majority in Parliament, giving state-owned companies until 2006 to comply and publicly listed companies until 2008.

I think we all know where this is going. Like the storied Camelot of olde, 'tis a silly place:

Nearly eight years on, the share of female directors at the roughly 400 companies affected is above 40 percent, while women fill more than a quarter of the board seats at the 65 largest privately held companies. To many feminists, this is the boldest move anywhere to breach one of the most durable barriers to gender equality.

Indeed, the world has noticed: Spain and the Netherlands have passed similar laws, with a 2015 deadline for compliance. The French Senate will soon debate a bill phasing in a female quota by 2016, after the National Assembly approved the measure last week. Belgium, Britain, Germany and Sweden are considering legislation.

But as the dust has settled, researchers are grappling with some frustrating facts: Bringing large numbers of women into Norway’s boardrooms has done little — yet — to improve either the professional caliber of the boards or to enhance corporate performance. In fact, early evidence from a little-noticed study by the University of Michigan suggests that the immediate effect has been negative on both counts. And the sixfold increase in women as directors has not yet brought any real rise in the number of women as chief executives.

Well now there's a shocker for you. Who'd a thunk that massive, government sponsored social engineering projects would fail to benefit the intended beneficiaries?

Fortunately, having learned from past experience we'll never do anything that dumb again. And I am so going to Hell for snickering at that woman's last name.

Posted by Cassandra at January 29, 2010 12:12 PM

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"Bringing large numbers of women into Norway’s boardrooms has done little — yet — to improve either the professional caliber of the boards or to enhance corporate performance."

No, reeeeelly? It's almost as if affirmative action didn't work. Well, if we didn't improve performance and overall well-being, at least we increased fairness and employed a lot of bureaucrats!

I love the "yet." Double down! It's bound to work if we ignore failure for another few years!

Posted by: Texan99 at January 29, 2010 03:11 PM

I love the "yet." Double down! It's bound to work if we ignore failure for another few years!

Undoubtedly, as with the eventual failures of communism and socialism, some bright spirit will declare this, too to be a failure in execution :p

Morons.

Posted by: Cassandra at January 29, 2010 03:19 PM

...some bright spirit will declare this, too to be a failure in execution

Well, obviously, it hasn't succeeded because there wasn't sufficient *diversity* among the women. I foresee a Cinderella-esque scouring of the fjords for Norwegian women-of-color (other than blonde or redhead) with Hispanic surnames...

Posted by: BillT at January 29, 2010 04:42 PM

"Bringing large numbers of __A___ into Norway’s boardrooms has done little — yet — to improve either the ________B__________ of the boards or to enhance _______C ___________."

A. jelly doughnuts
Teletubies
Na'vi drag queens
head lice
beer goggles
marmosett-stuffed olives

B. huge butts
suicide rate
television reception
short game
cognative dissonance
Cosmo quiz scores
lasagne

C. "Joani Loves Chachi" reruns
ego wrangling
ugly chicken feet
my pants
x-ray vision
tuna cassarole
John-Boy's "junk"

Posted by: spd rdr at January 29, 2010 05:20 PM

Or maybe that'll be women with Hispanic surnames scouring the fjords will be sought out... For their unique perspective... Sorta like when the local mass transit authority installed a career welfare recipient as Chairman of the Board of Directors.

"Atlanta's rapid transit agency, MARTA, is so grossly inefficient and beholden to unions that I just love pointing out their foibles to the rest of the country. Here's an update on the arrest of a MARTA patron for selling a token. Incredible. Remember, this is the multi billion-dollar enterprise that appointed a career welfare recipient as the chairman of its board of directors several years ago. Always political correctness over actual ability."
Through the looking glass...

Posted by: bt_semi-consciou...er-semi-retired_hun at January 29, 2010 06:04 PM

spd rdr, love it.

I'm not sure why, but this makes me think of the SEC's brilliant decision this week to require disclosure in annual statements of a company's risk from the consequences of global warming. I have a vision of lawyer grunts all over the country penning vacuous little blurbs to include in the filings, sort of the way they did when whatever it was -- Sarbanes-Oxley? -- required the inclusion of some kind of disclaimer about future-oriented hot air, and everyone immediately included a boilerplate paragraph warning that you never could tell about this prediction stuff, expressed in 500 words. The balderdash quotient in annual statements was already pretty high. We're going to have to create whole sections to address the nonsense that no sane investor would actually consider, like the company's diversity status, or how far above sea level its headquarters are, or how fully management has synergized the paradigms.

Posted by: Texan99 at January 29, 2010 07:43 PM

♪ It don't mean a thang if it ain't got methane... Do wop, do wop, do wop, do wop, do wop, do wop, doooo wopppppp. ♪

Posted by: Amos Pheric Hazing Jr. at January 29, 2010 08:02 PM

Someone has been playing 'Mad Libs,' again.
I guess 'Gabrielsdottir' doesn't even think of the irony.

I for one have no wish to be on the board of directors for a company; state or otherwise.
It is because I know my limitations.

It would be so offensive to me to be handed something because I am female and not because I had earned it.

Maybe when I finish my degree I will plot with HomeSixMom and Sly to take over the world.

Elaine Page makes an interesting point about Susan Boyle; she hasn't worked like a dog
the way she did. Well, maybe because no one gave her a chance, but I think she paid her dues
in rejection.

It doesn't make her talent any less valid. But
25 years ago, it did take word of mouth.

I dunno..I am just rambling because I have a paper to write.

On customer service and statistics.

With my paper or on it.

Posted by: Cricket at January 29, 2010 09:32 PM

20%.

That is the normal return rate on customer satisfaction surveys.

I help because I care. People....helping .....people.

Next Tuesday is Groundhog Day, in case anyone is interested.

Posted by: Don Brouhaha at January 29, 2010 10:11 PM

Don, I love you to death in a cyber-sibling sort of way. Do you have any documentation on that, say from someone reliable, like John Edwards?

Yes, it is ten minutes to six and I have been up for two hours organizing my notes.

Posted by: Cricket at January 30, 2010 05:51 AM

I've had experience with maybe one or two really good boards of directors, quite a few that were reasonably adequate if they were lucky in their CEO, and a good handful that were just pitiful chair-warmers desperate to avoid taking on liability for any decision. In bad companies, there's a tight little cabal of strong executives who manage to get compliant directors appointed who don't care about much as long as they get their stipends and their E&O insurance. You should hear these guys testify under oath about how they came to some particularly disastrous decision! They don't even know! They can't even lie about it convincingly!

That last kind of board of directors is where one might hope to be appointed, not because anyone really thought he could contribute to good governance, but because he is a member of a favored group. Often the group consists of "Friends of ____," a major investor, who will vote as directed, but it can also be "Plug in Trendy Disadvantaged Group Here."

In receiving this kind of appointment, no woman need fear that she's being handed something she didn't earn! Her predecessors didn't earn it, either. But it still stinks.

Posted by: Texan99 at January 30, 2010 09:52 AM

They didn't earn it, no; but it's interesting how they've responded to it all the same.

If someone gave you such a position, T99, I have a strong sense that you would interest yourself in every aspect of what the company was doing. They wouldn't get away with anything.

What we're seeing here is that the opposite seems to have occurred. That suggests that these women weren't chosen just for being women, but also because they were known to be incurious.

I wonder if this law hasn't been used to replace board members who actually tried to hold the company to account. "Sorry, John, but we've got to swap you out... need to hit that 40%, you know..."

The law provided a clear cover for doing that.

Posted by: Grim at January 30, 2010 11:23 AM

Cassie, I couldn't help notice her last name, but at least her first name wasn't Dig. I can only imagine her first initial and last name on stationery.

Posted by: Cricket at January 30, 2010 03:20 PM

My civilian job is with a Norwegian company, and I can say that "diversity" with respect to gender, sexual orientation, and all the other stuff has pushed the Peter Principle to the limit. We have Engineering managers who have MBAs from un-named institutes on the sub-continent who would have to be spoon fed clues to have one. I am fortunate that I am somewhat autonomous, however, a person of the opposite gender has deemed that we cannot respond to customer needs based on our knowledge of the customer. We must have a signed contract. So far I have had two long time customers tell me it was nice doing business with us, but if their word was not their bond....well....

I took that to my "manager" who told me that we do not do business like that any more and if a customer did not like it, they could find someone else to supply the service we do. I find that amazing to say the least; we (my little group) were "given" to our current manager by one of his higher ups who noted that we made more money than anyone else in the office (with less people) and the current managers' group was losing money. So to keep the Bengali Brotherhood smiling, we were transferred....

It's all about diversity....sorry to ramble so...but I am very, very upset. Deploying will be a good thing. It's tough to work for an engineering manager who can't even spell engineering....all they can do is sell, except they don't know what they are selling....sad sad sad!

Posted by: kbob in katy at January 31, 2010 07:48 PM

We have Engineering managers who have MBAs from un-named institutes on the sub-continent who would have to be spoon fed clues to have one.

My previous boss had an MBA and almost single-handedly destroyed the customer trust our little deployed group of itinerant contractor parasites had previously earned from the Iraqis.

Our current boss has a BA in Military History and common sense.

Took us six weeks to undo ten months' worth of *bad*...

Posted by: BillT at February 1, 2010 07:11 AM

Perzakly Bill T!!

an MBA with no background is at least as dangerous as a 2LT with an idea. The similarities abound!!

Posted by: Kbob in katy(@SFO) at February 1, 2010 07:36 AM

While I would be tempted to laugh, the sad part is we are hearing from liberals that the US lags in everything, especially education, and yet, I hear different with regard to rote memprization and fly-by-night institutions.

While I have some rather naive thoughts about that, I will just sit off to the side and let wiser heads educate me.

Posted by: Cricket at February 1, 2010 08:49 AM

I wonder if this law hasn't been used to replace board members who actually tried to hold the company to account. "Sorry, John, but we've got to swap you out... need to hit that 40%, you know..."

Yeah, my first thought was that they would do something similar to what happened when a local building code commission declared that there should be twice as many women's restrooms as men's because of the long lines. The building owners, instead of creating new women's restrooms simply closed half of the men's rooms.

One out of two *is* at least 40% ya know.

Posted by: Yu-Ain Gonnano at February 1, 2010 10:54 AM

I'm sure I've quoted this favorite phrase from Richard Feynman here before, but I'm going to do it again. When he was thoroughly exasperated with the silly NASA safety protocols in the wake of the Challenger disaster, he said, "If we wish to have a successful technology, reality must take precedence over public relations, for Nature cannot be fooled."

Ours isn't the first culture to elevate crazy preconceptions over the evidence of their own eyes, but we do have bizarre notions these days about pretending to find competence somewhere other than where we actually find it. I suppose it's a little like insisting that the aristocracy are necessarily smarter and better at running things than the common people, or that Jews and women can't succeed at university. The amusing thing is that it's held out as a movement AGAINST racism and sexism, when it's obviously the opposite.

When you hear people elevate "fairness" over "competence," don't you feel as though you'd been dropped into a scene from Atlas Shrugged? That was such a clumsy satire, but Lordy, it's been so overtaken by reality that it scarcely seems like an exaggeration any more.

Posted by: Texan99 at February 2, 2010 12:22 AM

"When you hear people elevate "fairness" over "competence," don't you feel as though you'd been dropped into a scene from Atlas Shrugged? That was such a clumsy satire, but Lordy, it's been so overtaken by reality that it scarcely seems like an exaggeration any more."
Through the looking glass....

Working in the hallowed halls of BACC for several decades I learned to accept reality as whatever I had to live with. And living with both goats and stars being indiscriminately sacrificed in the name of fairness was but one shade of that reality.

Kbob, the MBA RCI syndrome is not isolated to European Bid'ness Viceroys. U.S. corporations... ah, multinational corporations, are on an equal footing with their Human Resources keepers and interpreters of the Corporate Canon, right along side the Marketing Misfits. And, at least in my recollection, both types were running neck and neck with the MBA's who knew nothing of the business for which they found themselves charting a course. A course that would often place the business on the rocks. But by then, the well papered individual at the chart, playing with the pair of compasses, would be on the next rung up the ladder in their quest to actualize the Peter Principle.

Today it seems, the buck stops, somewhere, *lifts arms and waves hands* out there. Apologies to Give 'em H3!! Harry.

Posted by: bt_seeker-of-the-buckstop_hun at February 2, 2010 12:30 PM

In one way I've had a lot of experience in this, but in another I'm still blind. My work is in cleaning up the messes left by business failures. I have decades of experience seeing what worked and what failed -- after the fact. I still don't have a good grasp of how to predict success or failure in advance, in any but the most extraordinary extremes of incompetence, mental illness, and graft. It's not just a question of letting the people who know most about the nuts and bolts of the business run the strategic or financial parts of the show. It's also certainly not just about letting the pointy-headed financial and MBA types indulge their fantasies and then escape with their bonuses.

At GE Capital, which was at least as consistently well-run as any other place I ever ran across, they talked about the need to get both the ethical and the technical parts right. If your heart was in the right place but you blew the execution, they'd train you some more in the execution (to a point). If your execution was brilliant but your heart was iffy, they'd counsel you (to a point). If you blew both, you were out of there.

Even so, in this as in every other business I ran into, there were always quite a few folks who elevated illusion over reality, and seemingly could not make their word their bond. Surely truthfulness and the ability to face facts will count for a lot in the (very) long run.

Posted by: Texan99 at February 3, 2010 03:38 PM

Bet it caused the compensation of competent female board members to skyrocket!

Wouldn't every corporation want to get one of the few good female board members (or someone with demonstrated experience or credentials to do such a job)?

And lured in a bunch of people who's only qualifications were the correct DNA.

Posted by: ruralcounsel at February 3, 2010 04:11 PM

I can't be the only one who noticed the unfortunate name of the Director General of the Equality Ministry...

Posted by: Moose at February 4, 2010 03:20 AM

Of course there would be something to say for a policy that board members should be chosen purely on the basis of competence, and not the usual good-old-boys club. That might lead to the election of more competent female board members by honest means.

The question becomes what constitutes competence in a board member. It's good to be a quick study, and to have business experience, especially in the relevant industry, and of course honesty and strength of mind are a must. It's not important, however, to be a charismatic leader, or someone with chief executive experience. No need to be a workaholic, either. Director is a part-time job. Given the family pressures that keep many women out of the chief executive pool (or innate female characteristics, if you prefer), it should be easier to find competent female board members than it is to find competent female CEOs. You just need honest people with a "show me" attitude.

Posted by: Texan99 at February 4, 2010 08:02 PM

When did the Almighty give sense to gerbils?
Not only that, when did we find out they had sense?

Posted by: Cricket at February 5, 2010 12:59 AM

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