Too Few Women Directors
Too Few Women Directors
Despite women joining FTSE 100 Boards at a faster rate than was predicted since the publication of Lord Davies' report on "Women on Boards", Liz Whitehead , employment law solicitor at law firm Hart Brown, asks if women are still being discriminated against at Board level
In 2012 many Boards of Directors throughout the Western and developed world are still "all male and all white". Since 1975 The Sex Discrimination Act in the UK has advocated equality and made it unlawful to discriminate against anyone because of their gender. But women are still under represented in the most senior roles in companies, and, whilst equally qualified, still paid less than their male counterparts. Most cases of sex discrimination cite inequality of pay, but others also claim indirect discrimination based on lost opportunity as a result of child care commitments.
The Equality Act 2010 states that it is direct discrimination to treat a person less favourably because of their sex. But is the failure to appoint women to the Board because of sex, or lack of relevant experience? Can a woman obtain that first Board appointment, without positive action? The Equality Act enables companies to take positive action to appoint women to senior roles. This requires the company to evaluate the qualifications of all applicants, and, where candidates are equally qualified, appoint the most under represented. (Section 159 EqA 2010). But there is no obligation to impose positive action on a company. If two candidates have equal qualifications, a man may still be legitimately preferred over a woman.
Government intervention in Norway and Finland resulted in a significant increase in the number of women on Boards in 2005. The Governments directly intervened by setting targets to be increased to 44%. (Whilst there is evidence of a recent increase in the appointment of women board members in the UK, it is predicted that only in 2015 will these account for more than 25%). In October 2011 David Cameron encouraged companies to voluntarily set internal targets to increase female Board members. Cameron also commented (at the Commonwealth heads of government summit in Perth) that companies recruiting more female board members, in response to a report that FTSE 100 directors averaged £2.7m in 2010, would drive down pay rates. This implies that women directors will continue to be paid less, expect less, and will reward themselves less for success than their male comparators.
If society is able to recognise increased flexibility and increased paternity rights, then women should also benefit from equality in the work place. There is no longer any reason to categorise women as carers and men as career orientated.
The Equality Act initially sought to protect women from dual discrimination (including that of age and sex) but this was later deleted. Older women at director level may well face prejudice, but discrimination, either because of age or sex, will remain predictably difficult to prove.
A Government can implement change by giving compulsory quotas to companies, forcing an increase in the number of women directors. But the real change will come when companies realise that the women who have been appointed to the Board room are there on merit. Objectively women have acquired legal rights, educational equality, and the right to self justification and financial independence. But, according to the Davis report it will be 2015 before there is a significant increase in the number of women directors.