When it comes to women on boards we must avoid ‘chicken or egg’ thinking

Labour Party

Based on an article originally written for LondonLovesBusiness

In a landmark moment the European Parliament today voted in favour of 40% female representation on boards by 2020. The plans, originally put forward by the European Commission’s Viviane Reding, went through the parliament this afternoon. This represents the biggest step yet in the EU’s drive to get women into economic decision-making positions.

The vote does not just represent a symbolic move, but a potential transformation of the way in which businesses operate. To achieve the kind of ‘cultural changes’ that Conservatives – such as the Equalities Secretary Maria Miller – propose, we surely need women to be at the top of companies making these changes happen. EU endorsement could therefore be the trigger for a sea-change in the way business is done; an effective end to the ‘boys club’ mentality.

Despite the fact that Germany – Britain’s most direct business competitor – this week signalled a commitment to quotas, the UK remains among the rump of EU countries which still favour voluntary or no action. This is a stance which will come under ever more intense scrutiny once the proposals passed on Wednesday go to the Council of Ministers (the body comprising the domestic leaders of the 28 Member States) next year.

With Cameron currently among the seven or so national leaders expected to block the plans, the UK government will have to explain how they expect to achieve gender parity without quotas. In light of the huge success that binding legislation has had in accelerating progress in France, Italy and Holland this will be a difficult case to make. Despite being Europe’s financial capital, Britain could once again find itself swimming against global tides as a Europe-wide consensus on gender equality builds.

The claim the government makes is that getting women onto boards will not change the ‘fundamental’ issue. The Department for Business proposes instead an educational and cultural approach, which they say will get women into executive positions from the ‘bottom up’. When I discussed this with Conservative MEP Marina Yannakoudakis on the Daily Politics yesterday she was keen to distinguish between non-executive positions and “other levels of business”. The Tory strategy is clear: depict female board representation as a sideshow – an impediment to focusing on the lack of women in management.

For me this argument is flawed. It suggests that getting women onto boards must either be the catalyst for a change in business culture or the product of it – that there can only be one, exclusive solution to this problem. This is an example of ‘chicken or egg’ thinking gone mad, and presents a false binary – as though getting women into boardrooms and making businesses more female-friendly lower down somehow contradict one another.

In fact, they are mutually reinforcing; more balance in the boardroom means a company ethos more sympathetic to women, which in turn increases the chances of women rising to board level. A virtuous circle is created. Higher quality part-time or flexible work, for example, is for me one of the best methods of preventing a pay gap opening up while women are in their thirties and forties (and thus approaching boardroom age). But it is something which companies are far less likely to consider if they do not have confident female advocates among their directors.

For Britain to capitalise on today’s vote we must stop the UK government from turning the women on boards issue into an artificial ‘top-down vs bottom up’ choice. To genuinely overcome the glass ceiling we need both: women pushing from below and women pulling them up from above. Gender parity from the tip to the base of the jobs pyramid.

With a Europe-wide consensus now establishing itself on this issue, we must increase pressure on the UK government to be proactive. We can no longer pretend that a fairer workplace will take place in splendid isolation.

BBC Worldwide on New Proposals for Women on Boards

Labour Party

Today I discussed on the BBC news channels and BBC World the revised plans for compulsory EU-wide quotas for women on company boards. You can see my interview here.

The European Commission will to press for 40% minimum female representation among non-executive board members by 2020 for publicly-listed companies except small and medium-sized firms, the Press Association reported.

Public sector listed companies will have to meet the target two years earlier the report said.

The revised gender rules do not apply to member states “which have already taken measures for more balanced boards… so long as they can demonstrate the measures are of ‘equivalent efficacy’ to reach the objective” (of the EU Directive).

The report explains what this will mean for the UK: ‘But all member states “will have to lay down ‘appropriate and dissuasive’ sanctions for companies in breach of the Directive”, says the proposal.

The Commission says the share of company board posts held by women in EU countries average less than 15%, compared with 16% in the UK.

According to latest UK figures in the Cranfield School of Management Female FTSE Report, female board representation could reach 27% by 2015, and 37% by 2020.

That should put the UK in the category excluded by Brussels from the new provisions.’