The application of the gender quota directive seems to be gaining traction, as two-thirds of companies falling under its purview now meet the quota requirements. Only two small listed companies have recently appointed all-male boards. Meanwhile, the proportion of women on the boards of First North companies stands at 25 percent. These figures are part of the Central Chamber of Commerce's latest review of female leadership.

In large listed companies, the share of women on boards has increased by two percentage points to reach 37 percent. In mid-sized listed companies, women's representation on boards rose by one percentage point to 33 percent, and in small listed companies, it surged by a remarkable three percentage points to 28 percent. Additionally, women accounted for a significant 44 percent of new board appointments.

"The preparations for the gender quota regulation, which will come into effect in the summer of 2026, appear to have begun. Moreover, the representation of women in the boards of smaller companies, valued by market capitalization, has again shown an upward trend after a period of stagnation over the past several years. Despite the upcoming quota regulation, it is essential to remember that board diversity is not solely about gender. Diversity in skills, experience, and perspectives supports a company's business and its development," says Ville Kajala, Chief Expert at the Central Chamber of Commerce.

According to Kajala, the method of preparing board compositions and the gender balance of the committee responsible for this process have an impact.

"The average proportion of women on boards is highest when the shareholders' nomination committee or the board's nomination committee includes at least one woman. However, it is worth noting that in smaller companies, where the entire board or the largest shareholders propose the board composition, the recruitment processes for board members may not be as systematic as in larger companies," explains Kajala.

Disparities in Gender Representation on Committees Widening

The majority of listed company boards have established one or more separate committees, such as audit committees, remuneration committees, or nomination committees. The proportion of women on these committees is 35 percent. However, the representation of women varies significantly among committees. In audit committees, the share of women has already risen to 45 percent, while it stands at 30 percent in remuneration committees.

On the other hand, the gender representation in the committees responsible for board composition remains low. Women make up 22 percent of members in the boards' nomination committees and a mere 11 percent of members in the shareholders' nomination committees. The gender balance of committee chairpersons follows a similar pattern.

Kajala points out that the distribution of committee positions is influenced by the background and experience of each board member.

"The overrepresentation of women in audit committees and underrepresentation in nomination committees reflects the fact that female board members more frequently come from support functions rather than CEO or business management positions. In contrast, the composition of shareholders' nomination committees reflects the fact that the largest shareholders of listed companies are typically men. Institutional investors, on the other hand, often nominate their CEOs, who are also usually male, to the largest listed companies' nomination committees," explains Kajala.

One in Four First North Board Members is Female

For the first time, the Central Chamber of Commerce also examined the proportion of women on the boards of First North companies. The share of women on First North company boards stands at 25 percent, rising to 33 percent for First North Premier companies. However, it's worth noting that there are currently only two companies in the First North Premier segment.

"The First North market is less regulated, and, for example, corporate governance codes do not apply to these companies. First North companies are often smaller growth-stage companies, with many being entrepreneur-led. This is also reflected in the governance structures of First North companies," says Kajala.

"We wanted to expand our review of female leadership to include First North companies because the significance of the First North market has grown in recent years, and there are now over 50 companies listed. Nearly nine out of ten First North companies have both men and women on their boards. Only six First North companies have all-male boards," Kajala adds.

The Central Chamber of Commerce has long promoted female leadership successfully through self-regulation measures. Since 2012, the Chamber has organized a mentoring program for female leaders, with over 300 participants to date. The next female leadership mentoring program is set to begin in the fall of 2023.