International Women’s Day – Connecting Girls, Inspiring Futures

International Women’s Day – Connecting Girls, Inspiring FuturesThursday 8th March marks the annual celebration of women’s achievements as thousands of events take place worldwide for International Women’s Day. Whilst we must all celebrate and reflect on the achievements of women, what is the status for women when it comes to equality in the workplace?

The evolutionary balance

It is obvious that discrimination exists, we are not going to debate whether or not this is the case. It is further evident that women do not always have the opportunities that men do. The fact is that a woman who aspires to be a director, CEO, or chairman of the board does so for exactly the same reasons as any man. Basically, these are that she thinks she can do the job and she wants to try. A sense of injustice surrounds why women have been held back in the workplace as there are very few jobs that can only be done by either a man or a woman. So is it that the boardroom regards the harder traditional alpha male skills and attributes such as drive, aggression and fearlessness more highly than the softer traditional female skills and attributes such as team building, communication and cautious optimism? In evolutionary terms it has been the balance of the genders which has enabled survival. Is it any different in corporate terms?

The boardroom balance

On 24 February 2011, Lord Davies published a review recommending that UK listed companies in the FTSE 100 should be aiming for a minimum of 25% female board representation by 2015 and that the FTSE 350 companies should be setting their own targets. The report, Women on Boards (PDF), also called on companies to disclose the number of women who sit on their board. In 2010 women made up only 12.5% of the members of corporate boards of FTSE 100 companies, which means women are significantly under represented on corporate boards, this is fact.

Research has shown that strong stock market growth among European companies is most likely to occur where there is a higher proportion of women in senior management teams and so many companies are missing out. Women on boards lead to better decisions being made as a more diverse team can offer different skills and a wider range of perspectives and experience, having a positive impact on company performance and profits, and ultimately contributing to the economic growth we need.

Improving futures

A six month progress report on the back of Lord Davies review in October 2011 revealed that 61 of the FTSE 100 companies responded to the report, acknowledging that gender diversity is an issue. The update also showed that women now make up 14.2% of FTSE 100 directors, which is a small improvement on the 2010 figure, but far short of the 25% target figure. That said, with female directors in the top 100 listed companies increasing by 2.5% to 14.2% and those in the top 250 listed companies increasing from 7.8% to 9.4% although these figures are still some way off the ideal ratio of 50:50, they show a marked improvement on previous years and with research now showing that companies with three or more women in the boardroom have better financial returns, it will hopefully not be long until the balance is further redressed and we see a pattern emerge towards what must be the right direction.

Carrot or stick?

The original report decided against mandatory quotas as board appointments should be made on the basis of business need, skill and ability. However, the report also predicted that at the current rate of change it will take over 70 years to achieve gender-balanced board rooms in the UK. David Cameron has said that he would prefer positive action by companies to voluntarily reduce the gender imbalance, however if this does not work quotas may have to be introduced.

The opinions and arguments surrounding quotas are varied. On the one hand, imposing quotas would force all companies to take positive action and ensure that corporate appointments are made from a broad spectrum of backgrounds and job sectors. In Norway legislation was introduced in 2006 giving companies a final deadline of 2008 to raise the proportion of women on their boards to 40%. This target was hit by 2009.

On the other hand, a ‘comply or explain’ code rather than a quota system provides the flexibility to allow companies to take action without enforcing constricting legislation which could force some companies to make appointments based solely on gender rather than on merit. All candidates want to feel they have earned the position based on talent and ability not because of a quota. Quotas could lead to a lack of respect or resentment.

The government has not yet introduced quotas in the UK, however if the figures continue at their current rate they may decide to do so. If companies do not become more proactive in recruiting women onto their boards, their choice to do so could be removed. The evidence suggests that electing women to these top positions is beneficial for all concerned.

If we then look at our employment laws, some 42 years after the Equal Pay Act was introduced, it appears that the gender divide has shrunk to the lowest level recorded – 9.1% according to the Office of National Statistics. Furthermore, in certain sectors such as marketing, women are earning more than their male counterparts, with graduate trainees outstripping the earnings of their male peers – a reversal of last year’s trend! Recent research also indicates that young women in their 20s now earn on average 3.6% more than male employees of the same age.

The Employment Tribunals have also been supporting women in their drive for equal pay, with claims resisted by Bury Metropolitan Borough Council and Council of the City of Sunderland both failing to establish a defence to equal pay claims where productivity bonuses were paid to a predominantly male group. The Court of Appeal made it clear in the 2011 decision of Helens and Knowsley Hospitals NHS Trust v Brownbill that the focus in equal pay claims should be on the equality of the terms and not purely on the total pay received, further highlighting the seemingly shrinking gender divide.

Evidence seems to suggest, that despite the wide inequality which still exists between men and women in the workplace, the divide appears to be shrinking for the first time. There is a long way to go to finally close the gender division once and for all but with many women now choosing to balance a successful career alongside family life it will hopefully not take 70 years to achieve gender balance in the boardroom, a just and real ‘triumph’ for women!

Organisational behaviour

On a concluding thought, it could perhaps be said that organisational behaviour has been in part responsible for women not being allowed to advance in their careers at the same pace as men, or at all. How an organisation thinks and behaves at managerial level, will inevitably determine and shape the ability of women to progress within a business. With more women gradually getting through the boardroom door perhaps it is inevitable that in time the UK will achieve an equal footing for women.

by Allison Grant, Partner, Lester Aldridge LLP

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