Norwegian OBX boards are becoming more diverse, but there is still more to be done
Research shows that having a diverse professional board of directors encourages a variety of perspectives in the decision-making process and therefore contributes to safeguarding the future of the company.
The Norwegian Code of Practice for Corporate Governance states in Section 8 that the composition of the board of directors should ensure that the board can attend to the common interests of all shareholders and meets the company’s need for expertise, capacity and diversity. Attention should be paid to ensuring that the board can function effectively as a collegiate body.
Leadership Advisor Group has conducted in-depth desk research to track the details of these boards since 2019 (including analysis in 2022 of nearly 160 CVs) and can illustrate the status today as well as changes over time in key diversity dimensions including:
- Type of experience of the board members (Finance, CEO, Strategy, HR, etc)
- Breadth of experience types on the board (e.g., avoiding a concentration of people with mainly Finance backgrounds or similar)
- Nationality (% Danish vs non-Danish)
- Size of the board (number of board members)
- Tenure of the board members
The main findings on the developments 2019 vs 2022 are these:
- The biggest change is that boards today have a higher % of board members with commercial experience (i.e., non-executives with experience in one or more of the areas of Marketing, Communication, Business Development, and Sales).
- In 2019 only 8% of the members had commercial experience, which has grown to 20% in 2022.
- This shows that boards have prioritized recruiting members with strong commercial experience.
- Another substantial change is within international experience (i.e non-executives who have lived in a country other than the country of their origin).
- n 2022, on average across all boards, 24% of the members had international experience, which has grown from 15% in 2019.
- The % of non-Norwegians on the boards has increased by 12 points, from 33% in 2019 to 45% in 2022.
Both trends show that the Norwegian boards have prioritized members with experience outside of Norway, which provides better diversity.
- Interestingly, there are six experience areas with continued low representation on OBX boards in 2022:
- HR & Organization, Laws & Regulation, Strategy, IT , Production / Supply Chain and R&D / Innovation.
- It seems that these boards are nearly universal in not valuing these areas for board recruitment. The question could be raised whether boards still recruit in a very traditional way, looking for experiences that current members believe will be important, based on their own specialty / experiences?
- As for breadth of experience, Gjensidige Forsikring seems to have the broadest composition with 10 experience areas covered, whereas Kahoot! has the narrowest composition, covering only four experience types.
- There are no significant changes in % female (40%), average age (58 years), or size of the board (6 members, on average), but there is a slight reduction in average tenure, from about 5 years in 2019 to just over 4 years in 2022.
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