More women on corporate boards "is just common sense"

By Larry  Sherwin

Hreggvidur Jonsson, Chairman of the Icelandic Chamber of Commerce and of Veritas Capital, is the only man on the Women in the Economy: Boosting Transition through Diversity panel at the 2014 EBRD Annual Meeting and Business Forum.

EBRD.com spoke to him about gender equality in Iceland and the Nordic countries.

Iceland, and the Nordic countries in general, are seen as pioneers in the area of gender equality. Why do you think this is?

Yes, the results show that the Nordic countries are at the very top when it comes to gender equality in general as measured by the World Economic Forum. However, we still have ongoing debates and discussions about how to increase the role of women in the boardroom and in the upper echelons of senior corporate management.

With regard to gender equality in general, I believe it has much to do with the historical structure of our societies. We have a history of democracy in our societies, and women received the right to vote early in the 20th century. We have a homogeneous population with a very limited gap between the social classes. We have built up strong welfare states that provide the backbone and services needed for employees and families with children to participate in the economy.

As a result, the employment rate of women is very high as is their participation in government and politics. The salary gap between women and men is among the lowest in the world and the enrolment of women at university has exceeded that of men by up to 50%.

In the wake of the financial crisis, a number of commentators suggested that gender had somehow played a role, that had there been more women at the helm of the finance industry, this would never have happened. What do you think?

It is very difficult to make such a generalised claim. There have been many theories about what caused the crisis such as lack of regulatory oversight, etc., but I believe it is a combination of factors.

I don’t believe it’s possible to simplify the matter, making it entirely gender-based. I believe more diversity at the board and management level of the financial industry would have reduced herd-like behaviour and subsequent risk-taking.

By “diversity”, I don’t only mean more women, but also people with broader background and experiences. However, we cannot dismiss the fact that plenty of research does show differences in leadership behaviours between men and women and one of the conclusions is that men are more likely to be lone decision-makers and risk-takers.

What would you say to those business executives who have resisted promoting women into more senior roles? Why does it make good business sense to have women on corporate boards?

I would say that they are not maximising the potential of their organizations – and subsequently the financial bottom line. To me, it is just common sense, based on the fact that women make up half of the world’s population and control about 80% of household spending decisions.

Women outnumber men at the university level in most western countries and graduate with higher grades. If this is not enough, there is plenty of research that shows why it makes good business sense to have women on corporate boards and in leadership positions. The research shows that companies with women board directors, especially those with three or more women directors, have better financial performance than those with the few or no female board directors.