Gender Balance on Corporate Boards

Mary Macleod Excerpts

Monday 7th January 2013 Commons Chamber

[Mary Macleod (Brentford and Isleworth) (Con)]

As others have said, this is an important debate. I spent 20 years working in business in the City, and I often found that for days on end I was the only woman sitting at the table during meetings. I spoke out about that to the many organisations with which I was connected.

As the Minister said, the coalition set out to change the position—that is in the coalition agreement—and it has done so. Many Members have pointed out today how important that change is to the economy. It is good for business, and, of course, it is good for women. We should focus on the incredible amount of talent that exists among women in the workplace throughout Britain, and on using their skills and experience for the benefit of the economy as well as enabling them to fulfil their own potential. Other Members, including my hon. Friend the Member for Reading West (Alok Sharma) and the hon. Member for Feltham and Heston (Seema Malhotra), have already referred to the advantages for business, and I shall not repeat their arguments. Suffice it to say that we need to use those talents, which can benefit individuals, companies and the country as a whole.

I do not believe in quotas; I believe we need business-led change based on absolute merit. My hon. Friend the Member for Esher and Walton (Mr Raab) explained very articulately why that is so important. However, I also believe that businesses should work hand in hand with the Government, who can highlight the issue—as we have today—in order to promote further progress. A great deal of good work has been done, and I congratulate the Minister and the Government on what has been achieved by Lord Davies’s report and the measures that have been introduced to help business.

We have already heard about the improvements in the FTSE 100 and 250. In the last year alone, 49% of FTSE 100 and 44% of FTSE 250 non-executive directors have been women. That is real progress. According to the FTSE board report published by Cranfield school of management in 2012, if we maintain the current momentum, female representation on boards could be a record 26.7% by 2015 and 36.9% by 2020. The report identified some great performers. Four women are members of Diageo’s board—44% of the overall membership—while three out of eight members of the Burberry board are women, including the chief executive and chief financial officer, and 33% of Pearson’s board members are women. Some organisations are leading the field, and are already doing a great job.

The role of women in Parliament, and in politics generally, was mentioned earlier. I chair the all-party parliamentary group for women in Parliament, which is determined to change the current position. In 2010, the number of female Conservative MPs increased from 17 to 49. Of course there is more work to be done, but we have made significant inroads. In the recent reshuffle, 50% of the 2010 intake who were appointed to Government roles were women.

The solution to the remaining problems lies partly in what the Government can do to encourage female representation and partly in what can be done by those in business, such as head-hunters, nomination committees and investors. Businesses can nurture talent by encouraging and mentoring women, and by changing the organisational culture of which Members have spoken today. Chief executives should lead from the top. If they really believe in a change in the culture, and if they can drive that change through their organisations, they will make a difference. I recently organised a women on boards leadership forum in the House, and was heartened to hear Antony Jenkins, the group chief executive of Barclays, speak so passionately about what the bank has done and will do in order to make a difference. We need more people like him.

I agree with Members who have said that non-executive director roles are still an issue. As was pointed out by the hon. Member for Sheffield, Heeley (Meg Munn), we must continue to increase the number of women in both executive and non-executive positions.

As for the directive, it is important for subsidiarity to be respected, and for women to be appointed on merit. This is not something on which we should receive directions from Europe; it is something that we can do ourselves, and we have made progress already.

--- Later in debate ---

[Julian Smith (Skipton and Ripon) (Con)]

I refer Members to my declaration in the register of Members’ interests.

This really is a dodgy dossier of an EU proposal. The reason given for the proposal on page 3 is that it will ease the functioning of the single market, but on page 9 it states that it will address the fundamental objective of gender equality. The polling support by the reliable Eurobarometer is also shaky. In fact, it shows more support for self-regulation than for legislation. The impact assessment states that there is only a weak case for the EU intervening in this area, and there is no rigorous detail of the important work already being done by member states. Only France is held up as a holy grail, with its 40% statutory level—France, with its Strauss-Kahn-style commitment to sexual equality.

More worryingly, the directive proposes stringent mandatory quotas on EU-listed companies, but glosses over the many and complex reasons for the poor numbers of female executives and non-executives. Where is the self-analysis of the EU’s long list of employment rules and regulations, which might have made matters worse for female business leaders over the past few years? Where is the hard-headed debate and evidence of whether current maternity and paternity rules risk keeping women out of the workplace for too long? Where are the apologies for forcing employers into the most soul-destroying transactional relationship with female employees going on maternity leave, rather than encouraging ongoing contact and involvement? EU policies have driven a wedge between employers and female employees.

We should be proud of the work that the Government have done in this area, which I am delighted the shadow Secretary of State recognised. Lord Davies adopted a sensible and pragmatic target of 25% and the focus on transparency has been working. Furthermore, the Financial Reporting Council has now introduced its requirements and there will be a focus on the top 350 companies setting out their aims for the number of women on boards by 2013-15. Furthermore, the Cranfield school of management has recognised that the Government are on track for 37% take-up by 2020.

[Mary Macleod]

Does my hon. Friend agree that the Women’s Business Council, set up by the Government, and the extra funding for female mentors for female business women will also help?

[Julian Smith]

I think it will help, and I pay tribute to my hon. Friend’s work on this issue since entering the House.

Transparency is putting pressure on companies to change. The Association of British Insurers and the National Association of Pension Funds are now reporting the number of women on boards and incorporating the figures into the voting information service for investors. Some asset management companies, including that run by the co-operative movement, which Labour Members are close to, have started to request data about board compositions from companies in which they invest. The Government have nudged the private sector to do more, and it is doing more, going with the grain of business and encouraging investor-led decisions to get more women on boards.

The UK is right with its approach of focusing on pipeline. Because companies are being forced to report on the number of women on their boards and the number of female employers, industry groups, mentoring groups and board clubs, which have been mentioned, are springing up, and head-hunters have now signed up to a code of conduct.

The UK is also right to look at overall numbers. My hon. Friend the Member for Esher and Walton (Mr Raab) mentioned the drop-off rate when women have children. This is where the EU proposals are so hypocritical. Its equality policies have focused too much on length of leave and rights, and not enough on how to keep women and employers engaged. Here again, the Government have taken the right decision by pushing ahead with right to request, maternity legislation and in relation to child care. As has been mentioned, the main reason the change is happening is the rapid change in social attitudes; we have much more enlightened employers. I know that the City got a hard time earlier in the debate, but in fact the American banks I was working with as a head-hunter were the most forward-thinking on this issue. We also have more enlightened men now. My wife is expecting a baby in a couple of weeks—[Interruption.] Thank you. Only three months ago, I was making the case that she should stay off work for a year to look after our child, but I have since seen the error of my ways and realised that her career is more important. I will be looking to the Minister for nappy changing advice—I hear that he is an expert—in order that I can fill the gap.

Attitudes at home and attitudes in the workplace driven by national Governments nudging business to look at the business logic of maximising women in the workplace are what is going to get us there much better and much smarter than this EU diktat.