Will ‘positive action’ promote women in the workplace?

2 Dec

Equalities minister Lynne Featherstone has announced new positive action laws allowing organisations to hire women over similarly qualified men.

The number of female directors on FTSE 100 boards has plateaued

The idea behind these well-meaning laws – part of the Equality Act – is to increase the representation of women areas of business where they are currently under-represented. In practice, it means that employers will be allowed to hire women promote them over similarly qualified men – though potentially laying organisations open to the risk of legal action from rejected candidates.

The Government insists that the new legislation will help protect employers, and will help achieve a better balance in their workforces. It says that ‘positive discrimination’ – where someone is given a job because she is a woman, or disabled, or from an ethnic minority – is still illegal. However, in its official statement, the Government Equalities Office said:  “This will help employers make their organisations more representative by giving them the option, when faced with two or more candidates of equal merit, to choose a candidate from a group that is under-represented in the workforce.”

Positive action is one of two initiatives introduced in the cross-government Equality Strategy. The second one will ask employers to carry out, and publish the results of, equal pay audits in a bid to shine a light on, and to eventually narrow, the gender pay gap. However, this will not be compulsory (which was the route the previous Government wanted).

“These plans are absolutely not about political correctness, or red tape, or quotas,” said Ms Featherstone. “It is about giving individual employers the tools they need to make their workforce fairer.”

There is clearly the need for some kind of action to change the gender make-up of Boards in UK, given the latest figures from the 2010 Female FTSE report from Cranfield School of Management.

2010 Female FTSE report

The number of female directors in UK boardrooms has reached a plateau over the last three years. There are only 135 female directors out of 1076 on FTSE 100 boards, equivalent to 12.5%. This is a negligible rise from 12.2% in 2009 and 12% in 2008 – and there are still 21 out of the top 100 listed companies that do not have any female representation in their boardrooms. In the FTSE 250, 52.4% of companies have no women on their boards.

The report sets out a series of five recommendations to increase the number of women in British boardrooms:

  1. To oblige chairmen to explain in their annual reports why they have less than 20% of women on their boards.
  2. To advertise all non-executive directorships in the private sector.
  3. To require headhunters to produce balanced candidate lists.
  4. To use skills audits to “make the appointments process as rigorous and objective as possible”.
  5. To get FTSE 100 chairman to encourage FTSE250 chairmen to seek out female candidates for board positions.

It will be interesting to see whether these high ideals and recommended measures – and the new Equalities Strategy – will boost that tiny 12.5% figure, and go some way to closing the gender pay gap, in the coming years. There is clearly a strong argument for doing so.

Theresa May, Home Secretary and Minister for Women and Equality, in the introduction to the Cranfield report, said: “It is important that business and Government work together to identify and tear down the barriers that prevent more women rising to the top. This is about improving performance and productivity, and is not just about gender.”

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