Women’s share of directorships in large Finnish listed companies remains at a high 29 per cent level. The fourth women executives report by Finland Chamber of Commerce, Women executives stepping up for more business responsibility, reveals two important findings. In the younger generation, women are increasingly being appointed to top executive positions. In the age group of 51 to 60 year olds, however, women hold only 5 per cent of line management positions. This is the reason behind the small number of women CEO’s and women’s smaller share of directorships.
The study focusing on female directorship on CEO and executive level covers all Finnish listed companies and is now conducted for the fourth time.
As for women’s directorship, the Finnish figures continue to be among the top EU countries. Women hold 29 per cent of directorships in large cap listed companies, 23 per cent in mid caps and 20 per cent in small caps. The average reaches 23 per cent (the same as in 2013).
Almost all board members in Finnish listed companies are non-executive. A one-tier board system is the governance model chosen by most Finnish companies.
According to Leena Linnainmaa, Deputy Chief Executive of Finland Chamber of Commerce, there is a simple reason for the smaller share of women’s directorships compared to men.
“There are very few women in line management positions in listed companies. The most sought-after directors have a background in line management and often have CEO experience. The large majority of women executives, however, lead support functions such as HR or communications rather than business operations.”
The good news is that women’s share of executive positions is on the rise. This year it reaches 20.7 per cent while the figure for 2013 was 19.2 per cent and 18.5 per cent in 2012.
Line management positions are still mostly held by men but the number of women in those positions has increased considerably. Currently 44 women executives (10 per cent) are in charge of business operations on the executive management level in Finnish listed companies while the number was only 26 in 2011.
“The figures reveal a positive trend but we are still far from an equal situation. It is especially good news that this year 39 per cent of executive appointments in listed companies have gone to women. That’s almost double the current overall share of 20.7 per cent”.
Young women stepping up for line management positions
The greatest change can be seen in the younger generation. Among them, women are increasingly appointed to line management. On the other hand, the vast majoritys of older women executives lead support functions. Among 51 to 60 year-old executives in line management, merely 5 per cent are women.
“CEOs and board members mostly come from that age group, and the very small number of women in line management in that age group explains to a large extent why so few women rise to CEO and board member positions”, says Antti Turunen, Legal Counsel of Finland Chamber of Commerce.
Turunen points out that there are signs of change in this regard. Only 17 per cent of the women in the age group of 51 to 60 years are executives in line management, whereas in the younger age groups below 50 years the number has doubled. Furthermore, 38 per cent of all women appointed to executive management teams in 2014 were appointed to line management.
“The women executives of younger generations are clearly taking more responsibility on the business side. In the last three years we have seen the number of women in line management double. If this trend continues, we can safely expect more women to take position as CEOs and board members in the future.”
Quotas do not promote women leadership at executive level
Leena Linnainmaa is concerned about the initiatives regarding quota legislation that are discussed at both EU and national level. According to Linnainmaa quotas are not effective in creating true progress – i.e. to increase the number of women at executive level or particularly in business management.
“Already today we have a clear discrepancy between the average background of male and female directors. Two thirds of the male board members have a background as CEOs, whereas the same applies only to one third of women in the same position. At the same time women are overrepresented in that group of board members that have a background as CFOs or general counsels. More attention should be given to the question how to increase the share of women in line management, since that is the only way to truly promote women’s leadership.”
- The fourth women executives report of Finland Chamber of Commerce: Women executives stepping up for more business responsibility
- Leena Linnainmaa’s videoblog: Female directors stepping up for executive position