THE BLOG
11/05/2014 11:31 am ET Updated Jan 05, 2015

Finns: The First and Last

By Katharina Miller, Associate, Dr. Frühbeck Abogados, S.L.P.

What do we know about Finland? Geographically, it has a border of 1,300 km with Russia. Finnish, along with Hungarian and Estonian, belong to the Finno-Ugric languages (personally, I gave up learning Estonian after a week as it is a very ambitious language, with 14 cases ). Finnish tango is becoming increasingly popular; the Finns love vodka; "Leningrad cowboys go America", a movie by Finnish screenwriter and film director Aki Kaurismäki, was a huge success ( at least in Germany); and the current Finnish Prime Minister is a young man who survived the Thai tsunami in 2004 and wrote a book about the death of his first wife. One more thing: The Organisation for Economic Cooperation and Development (OECD) began in 2000 to develop its Programme for International Student Assessment (PISA), and from that moment on Finland has always been on top in Europe for its excellent education.

These are some of the stereotypes and quirks that come to mind when I think of Finland. You cannot imagine how surprised I was when I realized that Finland is not the Wonderland I had thought regarding compliance with the Finnish Corporate Governance Code and, in particular, with respect to the transparent selection and appointment of board directors.

Let's start by chronological order. In 2003, the Finnish Code of Good Government was the first to mention worldwide and to highlight the importance of women directors on boards of directors. Since 2010, private companies are required to have a gender representation in the governing bodies. Failure to comply with this recommendation (it's recommendation number 9), companies have to explain the reasons for the failure. There is still 11% of governing bodies that only appoint male members. Their motivations relate to identical arguments as in Spain and Germany, especially in the sectors of construction and engineering and they are generally spoken that, "there are no women capable for the job." However, one must admit that in spite of this argument, the Finns have reached a fairly high presence in the governing bodies, namely 23%.

The bad news is that there are not many women executives: there is only one female CEO and 19% of women in management groups (management group), followed by 21 % women CFO. In contrast, Spanish listed companies have 10% of female executives, and Germany, which is the second to last in the list, with 6%, followed by Italy with 5%.

From an objective point of view, it seems that the numbers are fine. Finland has met its self-imposed duties four years ago. So, why am I complaining? Firstly, it should be noted that the training and the career path of the women that are entering in the governing bodies consist in around 89% of CEOs, CFOs or business operations, or what is the same, women directors are in 89% women executives. We have previously mentioned that executive women's presence leaves much to be desired, as most of the Finnish women employees and managers are active in the areas of human resources and communication. Second, Finnish companies can improve their transparency with regard to sex ratio in the administrative and management levels. And the third reason why we all need to worry about Finland is its gender violence: according to a report by the European Union Agency for Fundamental Rights (FRA), the Finns lead the list of the 28 EU Member States thus women experience physical and/or sexual violence by an intimate partner since age 15. I wonder if there can be gender equality if there is so much violence.