The boardroom quota: Spillover effects on the corporate executive committee: An event study of Norway’s boardroom quota and its spillover effects on the gender wage gap and female representation in the corporate executive committee

Abstract

In 2006, Norway introduced a boardroom quota requiring a minimum of 40 percent of each gender in the boardroom of public limited liability companies (ASA). Companies were given until January 2008 to comply. This paper investigates whether Norway’s boardroom quota has had positive spillover effects on the corporate executive committee (C-suite). Through econometric modeling, I will test if there was a significant increase in female representation and reduced gender wage gap among chief executive officers (CEOs) and executive vice presidents (EVPs) post-quota. My empirical analyses on CEOs are conducted based on data from Statistics Norway from 2004 to 2015. For the EVPs, a case study examining the ten largest ASA companies in Norway is conducted. My empirical results indicate limited evidence of higher female representation in the C-suite post-quota (2008-2015). While the female representation has increased in CEO and EVP positions post-quota, my analyses fail to prove that this increase is due to the quota. When investigating a shorter time period (2008-2011) there is some evidence of higher female representation due to the quota. However, this finding only applies to CEOs in large firms where the workforce is dominated by women. Furthermore, I find that female CEOs and EVPs earn on average 28.9% and 16.2% less than their male counterparts when comparing the fixed salary, respectively. My analyses also find a significant gender gap in other types of remunerations. When investigating the effects of the quota, my findings suggest no reduced gender wage gap among CEOs and EVPs. Altogether, this study suggests that the boardroom quota has had no substantial spillover effects on the female representation and gender wage gap in CEO and EVP positions.