How can employers promote diversity at board level?

Posted Friday 22nd March 2019

News that The Investment Association has written to 69 major companies asking them to increase the number of women in their boardrooms is clearly a positive step in addressing gender imbalance at the most senior level. The news may also prompt employers to consider how they might narrow their gender gap in a practical way.

What is the current legal landscape?

Despite it being well documented that women hold a minority of roles at board level across most major companies in the UK, there is currently no statutory requirement to address this imbalance.

The first step towards a government backed proposal to formalise the need for more women on boards was in 2011, when Lord Davies first published his report ‘Women on Boards’, recommending that FTSE 100 companies achieve at least 25% female representation in the boardroom by 2015.

Legislation requiring businesses that employ more than 250 people to publish their gender pay gap statistics also highlighted the issue, but in a more oblique way. The critical point arising from this requirement is the stipulation that a breakdown of data between pay levels is included, which increases the focus on disparities between pay grades.

However, the recent initiative from the Investment Association shows that greater steps are needed to address the gender imbalance at board level. Consequently, the Association has called for the companies in question to have 33% of their board membership to be women by 2020. While the Association’s CEO has stated that “Companies must do more than take the tokenistic step of appointing just one woman to their board and consider that job done”, for many employers, knowing how to approach gender diversity at board level in a sustainable way is difficult.

What can employers do?

Employers should approach gender diversity with a long-term view that takes a holistic approach. This is likely to be more sustainable when compared with a quota system. For many companies, both large and small, gender inequality may be so deeply ingrained in company culture that without addressing the root cause, quotas will only serve as a short-term ‘quick fix’.

Employers could also follow the examples of companies such as Bloomberg, which is running a series of initiatives throughout March 2019 to celebrate International Women’s Day. While gender balance can’t be solved with an anniversary, the day does create opportunities for employers to learn from others, celebrate the achievements of women in business, industry, art, science and beyond, and use the day to raise awareness throughout a business.

Businesses should start by asking themselves if they have active female role models at leadership level, so that those rising through the ranks have senior female role models to aspire to. If not, are there male leaders who are vocal and openly supportive of women’s female progression to board level?  Initiatives like the UN’s HeforShe offer men the opportunity to reflect on the role that they have in supporting women in the workplace, and may also empower women who see these visible male cheerleaders.

Every employer’s approach to tackling gender inequality will necessarily be different, according to the extent of the imbalance and the size of the business. However, a holistic approach that goes beyond merely paying lip service to the idea of equality should ensure that employers are making steps in the right direction.

This article is for reference purposes only. It does not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking or deciding not to take any action.

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