Europe's new old-girls' club

Laws setting gender quotas for corporate boards have created another set of elites.

When the Norwegian parliament introduced legislation setting quotas for women on company boards, the goal was to increase diversity in corporate management. The effect, though, might have been to just trade one set of elites for another.

After the law was passed, the percentage of board members who were female rose to 44% in 2008 from just under 7% in 2002. But according to Benja Stig Fagerland, a Danish economist who started a business in 2003 to recruit female directors, the same women are appearing on all the boards in Norway.

“The all-men’s club has been replaced by an all-women’s club,” says Fagerland, “It’s still about knowing the right people.”

This pattern is being repeated in France, where pending legislation would require that the boards of companies on the CAC 40 achieve gender parity by 2015. But in a typically Gallic twist, the friends and relatives of company bigwigs tend to be more fashionable and less skilled than their Scandinavian counterparts.

Take 76-year-old Bernadette Chirac, who was recently appointed to the board of the luxury group Moët Hennessy Louis Vuitton. To justify her qualifications, the company told The Economist, “As first lady, she supported fashion and attended catwalk shows.” Also likely to have factored into the appointment, says Diane Segalen, the vice-chairman of Paris headhunter CP Partners, is the fact that Chirac’s daughter is head of communications at the company.

Segalen says that 170 female directors will need to be hired in France in the next six years to meet the quota, and a woman’s skill and experience are not always the company’s top priorities. Segalen was shocked to find some directors took the appearance of female candidates into consideration.

“There is a man who sits on the board who said, ‘At least this woman, she looks quite ugly, so no one will think if she is on the board that I am having an affair with her,'” says Segalen. “Obviously, no one would make such comments about men.”

Elevating competent women to high-level positions may be more of a battle in the traditionally male-dominated corporate culture of France than it was in Norway, where egalitarianism is deeply ingrained in many aspects of society.

Parity laws are in place in both countries requiring that women hold a certain number of government positions, but the quotas have been much more effective in Norway. In France, many parties prefer to pay fines than to hire the requisite number of women.

Critics of quotas say they can force businesses to hire directors with less professional experience than their male counterparts. But according to Segalen, some companies — particularly family-controlled businesses — are deliberately choosing women with little experience because they don’t want a director that will interfere with the status quo.

This has led to the practice of appointing elderly relatives of people in the company who wield influence. For example, Dassault Aviation recently appointed Nicole Dassault, the wife of the company’s controlling shareholder, to the board. “What does it tell you when they say, ‘You want a woman on the board, we appoint Nicole,'” says Segalen, “She’s 80 years old, she’s never worked — of course there are people who are more skilled than her.”