Sanctions

The literature on the Norwegian experience has highlighted the importance of sanction in order for quotas to be a success (Storvik and Teigen, 2010). The Icelandic legislation on gender representation does not lay down any sanctions for non-complying parties. This section will present the opinions of the board members regarding the non-existence of sanctions and whether or not they think that firms will comply.

John claims he does not know if firms will comply and mentions that probably some private limited companies will not give a damn about the legislation. Later he states that he does not understand how a law can be established without having penalties or sanctions if the law is broken. Mary argues that not to comply could in the end be seen by others as lousy and old-fashioned. Moreover, she maintains that although there are no sanctions for non-complying parties, firms are still required to comply. She talks about how firms can use the law for their own good. For instance she argues that complying companies are likely to receive a better reputation. She does not understand how the law can be a burden and has this to say about non-complying firms:

“þú veist langar mig að vinna hjá fyrirtæki ef að ég er kona og ætla að sækja um vinnu sem millistjórnandi eða (konu), á ég séns á því að sko fá einhvern starfsframa ef að stjórnin

að þetta getur líka farið að hafa neikvæð áhrif á þessi stóru fyrirtæki” (Mary, 21 May 2012).

The quote can be roughly translated into: you know, do I want to work for a firm if I am a woman and am going to apply for a middle-management position, do I have a chance of any career advancement (within a firm) if the board cannot even comply with the law and have women on the board. In the end she suggests that non-compliance can start having negative effects on firms, especially bigger firms. Daisy claims that FKA and the Ministry of Economic Affairs are very positive that sanctions are not needed. Moreover, she points out that if it does not work out without sanctions the ministry can do whatever that it chooses. She stresses that there is great trust between the economy and the ministry and shows a lot of believe in firms and boards when she says that Icelandic board members are intelligent enough to comply. Mark argues that since there are no sanctions we will just have to try and see how it goes, monitor it and hope that it will work. He suggests that if the motive if clear and there are enough people supporting it and talking positively about it, it may work.

5.11.1. Sanctions – Ministry of Economic Affairs

Apart from the interviews I contacted an employee of the Ministry of Economic Affairs by phone to ask more into the sanctions, or rather the lack thereof. The following section will present what arrangements the ministry has in place to reach the aims stated in the law.

Moreover the justifications the ministry puts forth for not including sanctions will be introduced.

The ministry has mainly been working towards raising awareness about the law in consultation with various parties of interest, such as Iceland Chamber of Commerce, the Confederation of Icelandic Employees, FKA, the banks, KPMG Iceland and many of the bigger companies. Moreover, the ministry claims to be prepared to assist those firms that seek assistance in fulfilling the law. No measures are currently in place but KPMG Iceland

work out without sanctions but in case the provisions of the law are not being followed the situations may possibly be reevaluated where the reasons why it is not working will be considered. The law is not intended to make a ‘one size fits all’ culture on Icelandic boards according to the contact person and thus it is likely that circumstances may be taken into account in some cases.

It can be interpreted trough the answers given in the interview that the Icelandic law is though as a means to change board cultures and break up the homogenous nature that characterizes Icelandic boards. It can even be seen as a part of the reconstruction strategy after the financial crisis that hit Iceland so hard. The goal with the law enforcement is to ensure that the ideology behind the passing of the law is delivered which is based on increased competitiveness as a result of a more equal gender representation, but not so much based on gender equality. Further, the respondent makes a distinction between the reasons why Iceland on the one hand and Norway on the other passed a law on gender representation and argues that in Norway it was mainly based on gender equality while in Iceland it is was more about tidying up after the economic collapse and making some substantive changes on corporate boards as a means to improve corporate governance.

Furthermore, when the difference between the Norwegian and the Icelandic law came up for discussion i.e. that the Norwegian law covers public limited firms while the Icelandic law covers both private limited firms and public limited firms, the respondent argues that it is easier to avoid the Norwegian law by changing the legal status of a firm. This will not be possible for Icelandic firms. The respondent presumes that the ideology will be delivered and expects companies to comply. Further the respondent hopes that there will be no need for companies to try and find loopholes to avoid the law.

In the next section the discussion takes place. There I will discuss the results in the context of the literature review and relate the discussion to the case of Iceland.