Promotion of Women in Business

Baroness Burt of Solihull Excerpts

Tuesday 22nd March 2011 Westminster Hall

[Lorely Burt (Solihull) (LD)]

I congratulate my hon. Friend the Member for Maidstone and The Weald (Mrs Grant) on securing this important debate. I also echo the excellent suggestion of my hon. Friend the Member for Skipton and Ripon (Julian Smith) to introduce a Select Committee on women and diversity. The Minister will be listening carefully, and I shall make representations through the Liberal Democrats’ Business, Innovation and Skills parliamentary committee, which I co-chair.

We have heard excellent contributions this morning, and I need not reiterate why we must bother with women on boards. The aspiration of equal opportunities clearly does not work. It is 40 years since the Equal Employment Opportunity Act 1972, but still only 12.5% of members of FTSE 100 boards are women, and only five are run by women. Evidence shows that companies that increase the number of women in leadership positions outperform those that do not. Clearly, it is good for business to have more women.

On stereotyping, Martin Vander Weyer said in The Spectator on 26 February:

“Women are more risk-averse, less driven by raw competitive urges, and more likely to stay focused on generating steady returns; and those are precisely the qualities needed in non-executive directors to counterbalance the machismo of thrusting executives.”

Such stereotyping is dangerous. Not all women are like that, any more than all men are testosterone-fuelled risk-takers. We all have a bit of yin and a bit of yang in us, and it is important not to accept stereotypical opportunities.

Who is calling for change? Last year, the CBI called for a comply-or-explain policy for all businesses, and Viviane Reding, European Commissioner for Justice, is considering calling for quotas. She has started a five-year strategy to achieve 30% of women on boards by 2015 and 40% by 2020.

What are the problems? Many have been discussed this morning, and they include lack of flexibility, and linear advance patterns. My hon. Friend the Member for Brentford and Isleworth (Mary Macleod) talked about whole-life careers. We now have many careers during our lives, and the idea that one must go from one step to another clearly does not work for women or for men.

The male culture of people of the same sex, who perhaps went to the same school or who even belong to the same club, is harmful in achieving diversity of view and opinion and opening up boards to new ideas in all sorts of ways. On nominations committees, we heard an expert speech on the position that head-hunters are in. They may be eager to please, but I welcome the voluntary code that is being promoted by Lord Davies.

There are many things we can do to help—for example, flexible working. I am delighted that the Government are committed to flexible working not just for women and not just for men with children, but for everyone, because quality of work and life makes people better contributors to the work force. We must recognise people for their contribution, not for the number of hours their coat is on the peg at work. I call that “presentism”.

Collaborative leadership styles would be much more positive and helpful in some circumstances, as would effective succession planning. Women respond really well to coaching and mentoring, and we are often our own worst enemies, because we do not recognise how good we are. I had to have a stiff talking to by a friend before I accepted that I would be good enough to become a Member of Parliament. Talent must be recognised in organisations. My hon. Friend the Member for Maidstone and The Weald referred to the leader of the Conservative party and said how well the Conservatives have done in bringing on women. One could argue about whether that constitutes positive discrimination, but the A list has certainly introduced a new generation of women MPs, and I assure you, Mr Caton, that there are no token women in this Chamber; they are all full-on, first-class Members of Parliament.

[Mary Macleod]

Does my hon. Friend agree that the Conservative party increased the number of its women MPs at the last general election partly because we had a leader overseeing the matter from the top? He promoted it and ensured that it was at the top of the agenda. The same must happen on boards. Does she agree that it is important for chairmen, chief executives and board members to say, “This is really important; we must do something about it.”? If that happens, something will be done?

[Lorely Burt]

I could not agree more.

I want to finish by referring again to Lord Davies. I have spoken about head-hunters and the requirement on listed companies to disclose annually the proportion of women on boards, how many are senior executives and how many are in the work force generally. That would shame a lot of companies into looking at the poor representation of women.

Lord Davies leaves formal quotas as a future possibility, but states that there is overwhelming opposition to them. Well, there would be. To require someone to comply would challenge the stereotypical grey men in grey suits. Will we need quotas? The Davies challenge is for the make-up of boards to include 25% of women within four years. I believe that we will probably need to move towards some form of quota system if boards do not comply with that. This is the last chance saloon for the grey men in grey suits.

[Martin Caton (in the Chair)]

I will now call Andrea Leadsom, but I advise the Chamber that five hon. Members wish to speak and I want to start the winding-up speeches by 10.40 am. We need more brevity and more speakers.

--- Later in debate ---

[Nia Griffith (Llanelli) (Lab)]

I warmly congratulate the hon. Member for Maidstone and The Weald (Mrs Grant) on her excellent opening speech and on securing the debate. I thank the many Members who have contributed in a positive way. There is much that we can agree on in terms of the need for encouragement, mentoring, sponsorship, role models and enterprise awareness, and those are very much the steps we need to take.

Ensuring that women can participate as fully as possible in business and enjoy full recognition of their abilities and potential is vital not only to promote a more equal and just society, but to make the best possible use of their skills to increase wealth creation and make a more prosperous society. Women are, of course, involved in many different types of business, from the self-employed woman who works just a few hours a week to the woman with the busy corner shop or the woman working in the very largest of companies. Many of the difficulties they face are not necessarily specific to women. Generalisations over the huge diversity of business can be misleading, and there are, of course, many excellent examples of good practice and success stories.

Over the past 30 years, women’s employment has significantly increased and women are making a greater financial contribution than ever to family incomes. Therefore, it is not surprising that more women’s jobs, particularly jobs in the service sector, have been affected in the current economic crisis than in previous recessions. With the expected job losses in the public sector likely to affect women disproportionately due to the high concentration of women in the public sector, it is important that the Government do more than simply hope that the private sector will grow. There needs to be a clear strategy for growth and encouragement for women to take up jobs in the private sector, particularly those who have not worked there previously.

During Labour’s time in office, we introduced measures that have supported women. We extended maternity leave and introduced paternity leave. We also introduced the right for parents and carers to request flexible working, and many speakers today have mentioned its importance. There is more to do to ensure that employees and employers are aware of the right to request flexible working. It can be daunting to be the first in a workplace to make the request. Many women are worried that such a request might harm their career prospects or make them look half-hearted about work. Properly managed, flexible working, such as changes in working hours to allow a parent to drop off children at school in the morning, can result in the mum or dad feeling much less stressed and better able to concentrate on their work. For some women, it can make the difference between continuing in work and having to leave a job.

[Lorely Burt]

I agree with all the points that the hon. Lady has made. Is it not good that the Government are introducing flexible working for everyone, because that deals with the stigma of asking? Anyone can ask for flexible working, whether they are picking up their children or going to the golf course, so it is seen as part of the norm and not a condescension for someone because they happen to be a parent.

[Nia Griffith]

Indeed, the opportunity to have flexible working is extremely important. That is why it is particularly perturbing that news is coming through of an exemption for microbusinesses. That effectively denies employees in businesses with fewer than 10 employees the right to request flexible working. I question the Government’s rationale for making that exemption. They seem to be saying that denying employees that right will somehow stimulate growth in the economy.

If we cast our minds back a few years, we will remember that the Prime Minister, in his speech to the 2007 Conservative party conference, spoke about flexible working:

“Companies that have adopted this have found that they are able to grant the request in the vast majority of cases, they have actually found that productivity has gone up, profits have gone up, staff morale has gone up and keeping staff is easier.”

So what exactly has changed? Will the Minister explain what sort of analysis his Government have done that suggests that flexible working hampers growth? What economic impact assessment did his Government do before deciding the exemption for microbusinesses? How will this move impact on women in business? How is it compatible with the Prime Minister’s promise when he was in opposition that a Government whom he led would be the “most family friendly ever”?

The loss of the right to request flexible working will affect both men and women, but at the moment, it is likely to affect women far more widely than men. It will be yet another obstacle to women being able to combine work and family responsibilities. It might mean some women giving up work altogether, or it might deter women from seeking promotion. Was an equalities impact assessment undertaken on the exemption decision, and if not, why not? We are getting used to the Government breaking promises, and that action is usually accompanied by some sort of lame explanation, so I am curious to learn how denying employees the right to request flexible working will stimulate growth in the economy. To most people, it just looks like a backwards step.

When in office, the Labour Government introduced the Equality Act 2010, which not only streamlined the law by replacing nine major pieces of legislation and around 100 statutory instruments with a single Act, but introduced measures to create a more level playing field and make life fairer for women. Those measures include requiring gender pay reports, using public procurement to improve equality, extending the use of positive action in the workplace, and protecting carers from discrimination—although that, of course, applies equally to men and women, the reality is that women are more likely to be carers. Can the Minister confirm that his Government will implement in full all the measures in the 2010 Act?

We, on the Opposition Benches, welcome the work undertaken by Lord Davies of Abersoch in producing the Department for Business, Innovation and Skills report, “Women on Boards”. In particular, we welcome his recommendations that UK-listed companies in the FTSE 100 aim for a minimum of 25% female board member representation by 2015, that FTSE 350 companies set their own challenging targets to ensure that more talented and gifted women can get into top jobs in companies across the UK, and that those targets be set in the next six months and chief executives review the percentage of women they aim to have on their executive committees in 2013 and 2015.

The question is how we ensure that companies really make progress. The lesson from Norway, which is often quoted as having 40% women on boards, is that it does not happen simply by exhortation. That was tried first, but it took quotas to achieve the 40%. It is not nice to be accused of being on a board solely to make up a quota or to be used as a symbol that a company is addressing gender equality, but companies need to ask themselves exactly how appointments to boards are made. Does the process stand up to scrutiny? Is the best person for the post appointed? It may be that the best person for the post may not even be encouraged to apply. I hope that the recommendations in the report will make companies look very carefully at the whole pattern of promotion within the organisation, as many hon. Members have suggested, and identify whether there are factors, such as particular types of socialising after work, which tend to exclude women. It may be that much more subtle forces are at work, which amount more or less to that well documented tendency to select people like oneself.

What exactly will the Government do to ensure that the recommendations in Lord Davies’s report are fully implemented? Will the Government require companies to disclose each year the proportion of women on boards and in senior executive positions, and the proportion of female employees in the whole organisation, as recommended by Lord Davies? Will the Government insist on the disclosure of meaningful information about the company’s appointment process, as recommend by Lord Davies? How will the Government take forward the recommendation that a

“combination of entrepreneurs, existing providers and individuals needs to come together to consolidate and improve the provision of training and development for potential board members”?

The situation of part-timers needs particular attention. Some women find that they need to go part-time to combine work and a family. Other women would like to work part time, but are afraid of the consequences of doing so, knowing that too often going part time will set them back a long way in the pecking order. I have employed women part-timers, and have always found that their attitude to work is anything but part time. They invariably give over and above what is required for the hours they work. We need companies to take a serious look at how they deal with employees, largely women, who are working fewer hours than the full working week. Are they included in decision-making meetings? Are they encouraged to further their careers and seek promotion while remaining part time? Are they given training opportunities? Are they allowed to work part time only if they can find a person with whom to job share to replicate the exact pattern of a full-time post? Is part-time working considered appropriate only in the lower ranks of the company?

What is happening in other countries? In Spain, gender equity laws passed in 2007 obliged IBEX 35 firms to get a minimum of 40% women on boards in eight years. France passed a Bill applying a 40% quota for female directors by 2016. In Germany, the Justice Minister has threatened legislation if boards do not achieve a better balance in the next 12 months. Can the UK also move forward and can that be done without introducing quotas? Will the Government give companies sufficient encouragement to make the necessary changes voluntarily or will we find ourselves back here in two, three or four years’ time ruing the lack of progress?