| 21.02.2023

New study: More women on listed company boards through improved recruitment processes and change in values

Kvinna som pratar till en grupp människor vid ett mötesbord
Adopt more systematic recruitment processes, quickly implement the EU directive on gender quotas, and a proactive attitude among women. These are some of the recommendations in a new study on how to increase the proportion of women on boards and management teams of publicly traded companies.

Porträttbild av Emilia Vähämaa
Emilia Vähämaa

The proportion of women on the boards of Finnish listed companies clearly increased during the 2000s, but the positive trend appears to have slowed. The proportion of women on boards was 31% last year.

Associate professor Emilia Vähämaa, together with professor Kim Ittonen and assistant professor Jesper Haga at Hanken School of Economics, are some of the researchers behind the report "Listayhtiöiden hallitus- ja johtoryhmätehtävät: Naisten urakehityksen haasteet Opens in new window " which has been done in collaboration with the consulting company KPMG.

According to Emilia Vähämaa, businesses should question and evaluate their recruitment processes in order to make them more systematic. A systematic recruitment process entails the company defining what skills are required and how candidates are evaluated, among other things. The company ensures that there is sufficient diversity among those who are interviewed as well as those who interview. 

“The recruiting group must not be too homogenous. People tend to hire people similar to themselves.”

According to the research, one of the most significant barriers for women to enter the management and boards of listed companies is the area of operation.

“The metal and forest industries are examples of male-dominated industries, with men making up the majority of management. It has proven difficult to achieve greater equality through self-regulation and personal choices alone”, says Vähämaa.

New EU directive prohibits boards with only men

From 2026 at the latest, self-regulation will end, when a new EU directive on gender quotas Opens in new window enters into force. The directive requires at least one-third of the members of listed company boards to be women. Only Norway and Iceland have implemented gender quotas among the Nordic countries. The report recommend that Finland implement the new directive as soon as possible.

“Nobody thinks quotas are optimal, but many see it as necessary to achieve change. There is also hope that not only gender equality, but overall diversity, will increase in companies as management needs to broaden their horizons”, says Vähämaa.

Family leave and wage differentials still obstacles

The report highlights personal characteristics as potential barriers to career advancement. The researchers urge the women to actively promote their knowledge and create networks themselves.

“Women tend to be more critical of their competence and less prone to risk compared to men. Mentorship can be beneficial in career planning.”

Family leave is a barrier because women continue to bear the majority of household responsibilities. Another persistent issue is the wage disparity: the motivation to invest in a career can be influenced by the fact that the average wage for a woman doing the same job as a man is lower.

Emilia Vähämaa nevertheless views the development positively.

“I think we will see much greater diversity in the boards of listed companies in the future, not just because of the quotas. Because of societal attitudes and values, companies are increasingly paying attention to the role of women in management. Companies are becoming more aware of the benefits that diversity brings.”

You can read the report (in Finnish) and related policy briefs (in English and Finnish), which were produced as part of the Finnish Government's analysis, assessment and research activities here:

Text: Jessica Gustafsson