Independent Article with Commissioner Reding on Women on Boards

Labour Party

This article was published in the Independent on Thursday 21st November 2013.  It was co-authored by myself and Commissioner Viviane Reding, who is the person in the European Commission responsible for the proposed ‘Women on Boards’ directive.  If you would like to read the Independents further coverage of the story, you can do so by following the link here.  

Today’s overwhelming European Parliament backing for a 40% quota for women in the boardroom was a landmark for gender equality in Europe.

It has sent a clear signal that boardrooms can no longer be boys’ clubs.

The European Commission put the proposal on the table in November 2012. At its heart lies a reasonable requirement – 40% female representation among non-executive directors in publicly listed companies by 2020. This is accompanied by guidelines about how to achieve this in a clear and transparent way.

This will not mean anyone getting a job just because they are a woman. Nor is it about breathing down the neck of businesses. It is about stopping people being crowded out of boardrooms because they are female.

We want recruitment based on clear criteria and a comparison of the candidates’ skills and qualifications. This is fair both for the business world and for women – who have the same right to pursue careers as men.

Some say this should be left to voluntary action. They argue that, given time, businesses will tackle this issue on their own. But increases in female representation have happened at a snail’s pace in many EU countries.

At the current rate of progress, it would take until 2050 to get even close to gender balance in Europe’s boardrooms (that is to say, at least 40% of each gender). Company boards remain dominated by one gender. 83% of board members and 97% of boardroom chairs are male.

There is clear evidence that proportionate legislation is the best way of accelerating progress. The most rapid advances have been in countries such as France, Italy and Denmark, which have introduced legislative measures.

Germany’s prospective coalition partners announced earlier this week a 30% quota by 2016 for the proportion of women non-executive directors.

These countries are the motor of change. They have understood that if they want to remain competitive in a globalised economy they cannot disregard women. More and more companies are competing to attract the best female talent.

Yet representation for women at the top level remains the exception rather than the rule in Europe. This is all the more shocking given that 60% of graduates in the EU are female, and the proportion of women in work has risen steadily to 62% – up from 55% in 1997.

Since 2000, women have taken three-quarters of the new jobs generated in Europe. But this is not being reflected in the top positions.

We believe today’s vote is good news for the UK, where women occupy 18.5% of board places. That is slightly above the EU average. But it is hardly equality of opportunity. Yes, the glass ceiling in many companies has been raised, but it is still there, nearly as tough to crack as ever.

Our economies carry the burden of this. Gender equality at work is not just a women’s issue, but an economic imperative.

While there are signs of tentative economic recovery in the UK and some other countries, the challenges of an ageing population, falling birth rates and increasing skills shortages will not go away.

Europe – Britain included – will not meet these challenges without capitalising on the talent and skills that women offer.

The European Union has been a pioneer for gender equality. From equal pay to workplace rights, we can be proud of progress over the last few decades.

Today’s vote was another major step.

But for the proposal to become EU law, we will also need national ministers in the EU Council to back the 40% “quota”.

Will those ministers support MEPs, directly elected by European citizens, in helping advance gender equality in Europe?

Or will they drag their feet on the false basis that equality in multinational businesses can be tackled at national level, in isolation?

Will they send a strong message that 21st century boardrooms are no longer the realm of ‘old school tie’ networks? Or will some still argue that so-called ‘cultural changes’ will happen by themselves?

Today’s vote means decision time for national governments is approaching fast.

Women on Boards: Britain Must Lead Not Follow the Rest of Europe

Labour Party

It was announced on Tuesday that Burberry Chief Executive Angela Ahrendts would be leaving the company. Ahrendts’ move to Apple reduces the number of women heading up FTSE 100 companies to just two – Imperial Tobacco’s Alison Cooper and easyJet’s Carolyn McCall. It illustrates that, while the glass ceiling may be (slowly) rising, it is not going away. The very top of business is still uniformly male.

Ahrendts’ departure was timely, coming on the same day as European Parliament committees voted in favour of draft legislation requiring 40% representation for women among non-executive board members. The proposals, once enshrined in law, would require company boards to be two fifths female by 2020. A comprehensive 40 of the 51 committee members voted in favour of the plans, meaning that they can now go to the European Parliament for its next full session in November – and after that on to the Council of Ministers (the 28 Member States’ respective governments).

The UK’s existing self-regulatory measures have brought about incremental improvements when it comes to the number of women on boards. Last week figures showed that FTSE 100 non-exec directors are now 19% female, suggesting we are likely to hit Lord Davies’s 25% target by 2015. We are moving in the right direction.

However, our record on the issue remains distinctly average compared to other Member States. France, Holland and Italy have all had dramatic rises following the introduction of quotas in 2010, with France’s level of female representation increasing from 12.4% to 26.8%. The proportion of women on British boards, by comparison, is pretty much in line with Europe-wide figures – no better, no worse.

London, Europe’s main financial centre and home to some of the world’s largest companies, should be leading the way on this issue. Diversity at the top of businesses brings better leadership and a more rounded, innovative approach. I hope that the 40% target voted through yesterday will ultimately pass into EU Law, and that it will encourage UK businesses to look at competitors on the continent and try harder to set the pace. 60% of British graduates are now female; we need this to be better reflected in the people doing the top jobs.

Setting out a 2020 EU target for the proportion of women on boards would not mean telling individual Member States exactly how to go about addressing the problem; every country has a different economy and a different business ethos. Nor would it set unachievable goals for countries that are already doing well. What it would do is speed up the varying rates of progress across Member States, so that a gold standard for women on boards was reached by more quickly by more countries.

For me this is exactly what the European Parliament is there for: helping Member States to set out a shared vision for a more progressive Europe, and then working flexibly with them to help achieve it. Countries become fairer and more efficient when they work at a problem together rather than in isolation.

I hope the 40% target is formally introduced across Europe, and that its effect trickles upwards, so that if a female Chief Executive leaves a FTSE 100 company in 2020 it is less notable, from a gender equality perspective, than Ahrendts’ departure was yesterday.

The Tories should look to their own record in the House of Commons before ruling out quotas for women on company boards

Labour Party

Maria Miller in the Sunday Times a couple of days ago derided what she called Labour’s “obsession” with the number of women on company boards.

At least we now know where the Tories stand on the issue. As the Sunday Times points out, Miller’s comments signal a shift in the Tory-led Coalition’s approach to women in the workplace.

In February 2011 Government Ministers welcomed a landmark report by Lord Davies of Abersoch which set a target of 25 per cent female representation on the boards of the top 100 listed companies by 2015. Earlier this year David Cameron said he would not rule out going further and using quotas as a means of getting women into top executive jobs, according to the Sunday Times.

Miller, it appears, is now moving away from Cameron’s position. She apparently sees helping women juggle work and family life and providing greater access to childcare as the answer to getting more women on to company boards.  While both of these are extremely laudable aims, they are only steps on the road to equality for women in top posts.

A look at the Tories’ record in electing women to the House of Commons is instructive. Having introduced all women shortlists (the parliamentary equivalent of quotas) for Commons constituencies before the 1997 general election, 31 per cent of current Labour MPs are women. The Tories, who have no mandatory system but rely on voluntary measures, have only 16 per cent.

Later this week European Commissioner Viviane Reding will make a further announcement about her plans for more women on the boards of leading companies. Miller will, of course, continue to oppose quotas. She also claims that Viviane Reding’s proposal has already been rejected once, which is quite simply not true. In actual fact, as opposed to Tory EU make-believe, when Reding introduced her ideas at a recent meeting of the European Commission, no decision was taken in order to allow time for further discussions – hardly a rejection.

In the course of the Sunday Times article Miller inevitably trotted out the old cliché that women want and expect to reach the top on merit not because of political correctness. I get extremely angry with this attitude, implying as it does that women do not have the ability to fill and do well in top jobs and that women appointed as part of a quota system will merely be tokens.

Women are just as able and intelligent as men. They do, however, have children and sadly discrimination still exists. Quotas are a means of getting women to where they should be. Once that is achieved, quotas will no longer be needed.

Tories vote against Women in Boardrooms

Labour Party

Yesterday the European Parliament took a historic step forward in ensuring women’s leadership in business by urging the Commission to propose legislation including quotas by 2012 for increasing female representation in corporate management bodies of enterprises, if voluntary measures do not manage to increase the number of women.  

Women currently make up 10% of directors and only 3% of CEOs at the largest listed EU companies. The Parliament voted by a very large majority to address this inequality by adopting a resolution that calls for women to make up 30% of top management in the largest listed EU companies by 2015 and 40% by 2020.

Unsurprisingly, Tory MEPs were once again shown to support the extremist ring-wing position in the Parliament, an honour previously reserved for UKIP. The 17 out of 26 Tories that bothered to turn up to the vote voted against any legislation that would ensure women take their rightful place in business leadership. They also voted against the report as a whole, showing that not only do they disagree with legislation to enforce women’s equality but they disagree with encouraging women in business leadership at all.

This just goes to show just how out of touch with real issues the Tories are. Firstly, such legislation would only come into effect when voluntary measures fail, giving businesses an opportunity to change their practices voluntarily. Secondly, not only have several countries, notably Norway, the Netherlands, France and Spain, pioneered this approach already but our own experience in the UK shows that quotas are a necessary tool for breaking down the barriers to women’s access to high power jobs. They are one of the only ways in which the masculine culture of boardrooms and politics can be forced to change. The Tories’ however have shown that they have no interest in such change, nor in having women in positions of power.

I have always been a supporter of the introduction of gender quotas and spoke in their defence on Women’s Hour yesterday morning which you can listen to here:

I wholeheartedly welcome this decision and congratulate the Parliament’s Vice-President Rodi Kratsa-Tsagaropoulou who drafted this resolution. I hope that the Parliament’s decision yesterday will lead to real changes for the women of Europe. It is shameful however, to know that so many of the MEPs Britain sends to the European Parliament only seek to block and derail the best of its work.