Sweden

Rose Kenerson, Associate
Paul Hastings (New York)

Sweden has long been a global leader in the fight for gender equality.  Women have advanced, particularly in the public sector, with the help of decades of work to combat gender discrimination.  In fact, the World Economic Forum’s 2017 Global Gender Gap Report ranked Sweden as the fifth most gender-equal country in the world, noting that it was one of only 13 countries that had closed more than 80% of its gender gap.1 

While Sweden has successfully increased female participation in politics, the private sector has lagged behind.  This has led to an ongoing debate on whether Sweden should follow the lead of other countries in implementing mandatory quotas. As of summer 2018, Sweden had declined to do so, but it remains a large topic of debate.

The Constitution and Anti-Discrimination Legislation

Although Sweden has not instituted mandatory quotas, it has integrated anti-discrimination language into its Constitution, as well as several pieces of legislation.  Article 13 of the Swedish Constitution notes that, “[n]o act of law or other provision may imply the unfavourable treatment of anyone on grounds of gender, unless the provision forms part of efforts to promote equality between men and women or relates to compulsory military service or other equivalent official duties.”2

In addition, the Swedish Parliament has passed legislation supporting this goal.  For example, the Discrimination Act, passed in 2008, seeks to combat discrimination based on sex, gender identity, ethnicity, religious belief, disability, sexual orientation, and age.3  The Discrimination Act addresses many areas, including education and the workplace.  Section 13 specifically outlines the requirement that employers with 25 employees or more must create plans for implementing the measures addressed in the Discrimination Act in their workplace, which includes demands for equal pay for men and women.4  The Discrimination Act also calls for the establishment of an Equality Ombudsman and a Board against Discrimination working together to supervise compliance with the law, review complaints, and ensure that discrimination does not occur.5

In the past, several draft bills requiring mandatory quotas have been introduced in Parliament, but have never passed.  For example, in 2006, the Social Democrats proposed requiring a minimum of 40% of each sex to be represented on boards.6  The bill never advanced, but the topic still attracted attention until the Conservative Party General Assembly rejected the mandatory quota proposal.  In 2016, this issue gained more attention, as the government again drafted legislation requiring 40% representation by 2019.7  In early 2017, however, the government again dropped the legislation.8

Swedish Parliament and Political Parties

Although the Swedish Parliament has passed legislation aimed at eliminating gender discrimination, its efforts to create mandatory quotas have failed.  Instead, some political parties have resorted to implementing their own quotas.9  For example, the Social Democratic Party has had internal quotas since 1978.10  At least three other political parties, including the Left Party, Green Party, and Moderate Party, have also implemented internal quotas, such as a “zipper system,” which requires that the sexes alternate on party lists.11

With the help of these internal quotas, the Swedish Parliament has seen a tremendous increase in the number of female politicians since the 1970s, when the number of Swedish women participating generally in the labor market started to increase substantially.12  Much of the advancement of women in the workplace has occurred in politics rather than business.  For example, “[i]n 2015, 97 women and 102 men were heads of Sweden’s public agencies – positions appointed by the government, which also sets the salaries for these.”13  In 2017, 44% of seats of the Swedish Parliament were held by women.14  This shows substantial growth since 1957, when women only comprised 10% of Parliament.15  Since the early 1990s, the number of positions held by women has stayed above 40%.16 

Swedish Corporate Governance Code17

Although much of its success has stemmed from advancing women in politics, Sweden still leads globally in equal representation on corporate boards.18  This has occurred through the use of both legislation to promote equality generally and other mechanisms that target corporate boards specifically.  For example, the Swedish Corporate Governance Code (“the Code”), which applies to both listed private and public companies, sets gender balance on boards as a goal for all companies.

The Swedish Corporate Governance Board (“Governance Board”) monitors adherence to the Code, which operates on a “comply or explain” basis.  The Governance Board has explained that, “companies are not obliged to comply with every rule in the Code at all times, but are allowed the freedom to choose alternative solutions which they feel are better suited to their particular circumstances.”19  This grants companies some flexibility, “as long as they openly report every deviation, describe the alternative solution they have chosen and explain their reasons for doing so.”20  In regards to representation on corporate boards, the Code notes in Article 4.1 that, “[t]he company is to strive for gender balance on the board.”21  This requires companies to either comply or explain why their boards have not reached equal representation.

Since the Code has been in place, private companies have seen an increase in the number of women on boards.  In fact, 33.9% of the companies listed on the Nasdaq Stockholm Index have at least one woman on their board.22  State-owned and large cap companies have paved the way, with state-owned companies having at least 50% female representation since June 2003,23 and large cap companies currently having 37.7% of their board seats occupied by women.24  In addition, “44.9% of newly elected board members today are women.”25

Despite these advancements, there is still room to grow.  If the improvements were to continue at the same pace they have held for the last five years, “it will take 12 years for boards to comprise 50 percent women, and 24 years for 50 percent of executive positions to be filled by women.”26  This pace, while positive, has prompted questions of whether instituting mandatory gender quotas would hasten the process.  The Governance Board has weighed in on the controversy, noting that, “[i]t would be a serious restriction of proprietary rights if legislators began to decide on the composition of the boards of individual companies.”27

The Code was last updated in 2015, when it underwent a comprehensive review after soliciting responses on a draft published on June 5, 2015.28  During that time, the Governance Board considered whether quotas would benefit the cause.  Ultimately, however, the Governance Board concluded that, “[g]iven a choice, we would not like to see any legislation that restricts proprietary rights.  It must be the shareholders, i.e. the owners, of each individual company to decide who is to represent them on the board and manage their property.”29  Whether the Parliament will continue to agree with the Governance Board and refrain from passing mandatory quota legislation remains to be seen.

EU Guidance

Finally, as a member of the European Union (EU), Sweden must also take into consideration its directives.  In 2012, the European Commission issued a directive calling for all EU members to achieve 40% female representation on corporate boards by 2020.30  Despite coming close, Sweden currently falls short of this goal, with only 32% of board positions in listed companies held by women.31  Despite being shy of the 2020 goal, Sweden remains one of the EU countries with the highest percentage of female representation.

Conclusion

As one of the most gender-equal countries in the world, Sweden has succeeded in increasing the number of women involved in politics and business.  Despite these advancements, however, women still make up less than 40% of corporate boards.  This has fueled the ongoing debate on whether to implement mandatory quotas for corporate boards.  In the past, the Swedish government has rejected all movements for implementing mandatory quotas, most recently in 2017.32  As 2020 nears, the Swedish Parliament may again revisit this issue in order to attain the 40% goal discussed in the EU directive. 


1 The Global Gender Gap Report 2017, World Economic Forum 8 (2017), http://www3.weforum.org/docs/WEF_GGGR_2017.pdf.

2 Constitution of Sweden: the Fundamental Laws and the Riksdag Act [Constitution] 2016, art. 13, http://www.riksdagen.se/globalassets/07.-dokument--lagar/the-constitution-of-sweden-160628.pdf.

3 Discrimination Act, 2008:567 (Swed.), https://www.government.se/information-material/2015/09/discrimination-act-2008567/.

4 Id.

5 Act Concerning the Equality Ombudsman, 2008:568 (Swed.), http://www.do.se/other-languages/english/act-concerning-the-equality-ombudsman/.

6 Ann Numhauser-Henning, The Policy on Gender Equality in Sweden, European Parliament (2015), http://www.europarl.europa.eu/RegData/etudes/STUD/2015/510011/IPOL_STU(2015)510011_EN.pdf.

7 Vilhelm Carlström, The Swedish Government Just Proposed a Law for Gender Quotas on Corporate Boards, Nordic Business Insider (Sept. 9, 2016), https://nordic.businessinsider.com/the-swedish-government-just-proposed-a-law-for-gender-quotas-on-corporate-boards-2016-9/.

8 Cynthia Kroet, Sweden Drops Female Board Members Quota, Politico (Jan. 12, 2017), https://www.politico.eu/article/sweden-drops-female-board-members-quota/.

9 Gender Quotas Database: Sweden, IDEA, https://www.idea.int/data-tools/data/gender-quotas/country-view/261/35 (last updated Mar. 22, 2018).

Id.

12 Numhauser-Henning, supra note 6. 

13 Gender Equality in Sweden, https://sweden.se/society/gender-equality-in-sweden/ (last updated June 28, 2018).

Proportion of Seats Held by Women in National Parliaments (%), World Bank, https://data.worldbank.org/indicator/SG.GEN.PARL.ZS (last visited Sept. 12, 2018).

15 Numhauser-Henning, supra note 6. 

16 Id.

17 Swedish Corporate Governance Code (Dec. 1, 2016), http://www.corporategovernanceboard.se/UserFiles/Archive/496/The_Swedish_Corporate_Governance_Code_1_December_2016.pdf.

18 Institutional Shareholder Services, Inc., Gender Parity on Boards Around the World, Harv. L. School F. on Corp. Governance and Fin. Reg. (Jan. 5, 2017), https://corpgov.law.harvard.edu/2017/01/05/gender-parity-on-boards-around-the-world/.

19 Swedish Corporate Governance Code, supra note 17. 

20 Id.

21 Id. at 4.1.

22 Asset Management Culture, Swedish Companies Boost Gender Diversity for Leaders, Chief Investment Officer (June 14, 2018), https://www.ai-cio.com/news/swedish-companies-boost-gender-diversity-leaders/.

23 Numhauser-Henning, supra note 6. 

24 The Proportion of Women on the Boards and in Executive Positions at Listed Companies Continues to Increase and Large Caps are Leading the Way, Andra AP-fonden/AP2 (June 11, 2018), http://www.ap2.se/en/news-reports/news/2018/the-proportion-of-women-on-the-boards-and-in-executive-positions-at-listed-companies-continues-to-increase-and-large-caps-are-leading-the-way/.

25 Id.

26 Id.

27 Swedish Corporate Governance Board, Questions and Answers Regarding the Swedish Corporate Governance Board’s Efforts to Improve Gender Balance on the Boards of Listed Companies (May 30, 2014), http://www.corporategovernanceboard.se/UserFiles/Archive/334/gender_qa.pdf.

28 Swedish Corporate Governance Code, supra note 17. 

29 Swedish Corporate Governance Board, supra note 27.

30 Proposal for a Directive of the European Parliament and of the Council on Improving the Gender Balance Among Non-executive Directors of Companies Listed on Stock Exchanges and Related Measures, European Commission (Nov. 14, 2012), https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52012PC0614&from=EN. 

31 Agence France-Presse, Sweden Rejects Quotas for Women on Boards of Listed Companies, The Guardian (Jan. 12, 2017), https://www.theguardian.com/world/2017/jan/12/sweden-rejects-quotas-women-boardroom-listed-companies.

32 Id.