Gender Balance on Corporate Boards

Debate between Mary Macleod and Julian Smith

Monday 7th January 2013 Commons Chamber

[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.

Promotion of Women in Business

Debate between Mary Macleod and Julian Smith

Tuesday 22nd March 2011 Westminster Hall

[Julian Smith]

My hon. Friend makes an important point. There is a great deal of work to be done in the public sector as well as the private sector, but the Government now need to put significant pressure on the private sector, and not just on targets. One area I would advocate as well worth looking at is performance management generally in organisations. Can the Government do more to highlight those organisations that performance manage their staff and that look at things such as the approach that my hon. Friend the Member for Devizes (Claire Perry) suggested? Can we highlight, as well as company growth, those companies that manage their human resources positively?

[Mary Macleod]

Does my hon. Friend think that it is important to have real performance measures and that that should affect how people are remunerated? If they are not assessed on that, which might affect what they earn, people tend to forget about it. It is a nice-to-have, but there is no focus on it and nothing ever gets resolved. If people are actually measured on that and remunerated accordingly, something might change.

[Julian Smith]

My hon. Friend is absolutely right. The client that I worked with that did best in this area had such considerations hard-wired into compensation and promotion at all levels in the organisation, not just at board level. To get a pipeline of candidates for board positions, one has to work right down the organisation, at every level of management. In that organisation, the key question at every performance review was, “What diversity hiring have you done in the past six months?”

A relentless focus is required in the House and at every level of government. I am not convinced that having a unit on women and equality is the right way to go. We need this to be driven from the highest level in the Department for Business, Innovation and Skills, and we need to showcase with awards and in every way possible those organisations that are doing the right thing.