Norway will shut companies that refuse to recruit at least 40 per cent women to their boards by 2007 under an unprecedented equality drive, a cabinet minister said.

“Companies have been dragging their feet. They really have to recruit more women,” Children and Family Affairs Minister Laila Daavoey said. “In the very worst case, they will face closure.”

Norway’s parliament told firms in 2002 to ensure at least 40 per cent of each sex in boardrooms by mid-2005 to force corporate leadership to match Nordic traditions of sex equality elsewhere in society.

Before today, however, Oslo had not spelt out sanctions for non-compliance. Many companies denounce the scheme as the toughest corporate sex equality goal in the world.

“Since 2002 the percentage of women in boards has risen to only 11 per cent from six,” Ms Daavoey said. “Yet there are thousands of qualified women out there – companies can choose from half the adult population.”

Many European nations have more women in boardrooms than Norway and the male bastion is a paradox for a country where 40 per cent of the cabinet of Prime Minister Kjell Magne Bondevik and 37 per cent of parliamentarians are women.

Ms Daavoey, who oversees sex equality rules, said that all state-controlled firms including oil group Statoil and telecoms firm Telenor had already complied.

But many other firms are lagging, including energy and engineering group Aker Kvaerner or internet search group Fast. Many business leaders say the rules will force them to recruit ill-qualified women as quota fillers.

“If we can recruit women to our state companies why can’t private businesses do it too?” Ms Daavoey said.

She said the threat of closure was meant as a spur.

“I don’t believe that companies will get into a situation where they risk closure. Companies will obviously find women,” she said.

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