Since 2008, the gender composition of boards of directors in all public limited companies (PLC) in Norway has been regulated by law. The consequence was a sharp increase in the proportion of female directors reaching 40 % in 2008, thus meeting the minimum requirement. In this paper the effects of the law on the interlocking network of directors is analysed, using data from the period 2008 - 2016.
From a network perspective, the concept of old-boys network highlight not only the gender imbalance in leaderships positions in business, but also the restricted pool of candidates from which leaders and directors are recruited (the men with connections), as well as the recruitment mechanism (informal and network-based). Furthermore, the concept of social homophily is relevant. It has been shown that networks are an important recruitment mechanism to leadership positions, and specifically that the presence of female directors increase the likelihood of recruiting female directors. Thus, although not directly regulated by the law, there are strong reasons to analyse the effects of the law on this network.
Earlier studies show that the law had a large effect on the network of interlocking directorates. Female directors became central in the network, completely reversing the earlier situation. There is, however, reasons to believe that this could be a temporary effect. When the law was implemented, there were a large number of positions to be filled by women in combination with relatively few women with relevant experience. This has changed: there are fewer corporations regulated, and more female directors gain relevant experience.
Thus, in this paper, effects of the regulation on networks of interlocking directorates over time are analysed. The first main question explored is whether women keep their central positions attained immediately after the full implementation of the law during the period until 2016. Analysing the two-mode networks directly, using several measures of centrality, the main finding is in the affirmative – women keep their central positions.
The issue of gender imbalance in business is general in nature, while the law is narrow in the sense of targeting only one legal form of corporation, public limited companies. Possible effects beyond this form of corporation is important to consider, particularly since the number of public limited companies decrease during this period. Thus, the second main question is on possible effects of the law on corporations not directly regulated by the law, specifically private limited companies (Ltd). Here, the main finding is that there seem to be few discernible effects. In addition, there are few ties between this type of corporations and PLCs. Furthermore, when analysing the overall network, most of the network ties are among PLCs. From a network perspective, it can be argued that regulating PLC is effective when aiming to improve the gender balance among corporate directors in business, but that the effects beyond this legal type of corporations are small.