HM Insights

International Women's day brings equality in the boardroom back into focus

Comments by UN Women Executive Director Phumzile Mlambo-Ngcuka in the lead up to International Women's Day on 8 March have brought gender inequality, and more specifically equality in the boardroom, back into focus.

Why is the head of the UN agency for promoting equality for women lamenting that a girl born today will be an 81-year-old grandmother before a woman have the same chance as a man to be CEO of a company? Or that the same girl would have to wait until she is 50 to have an equal chance to lead a country?

The answer can be found in the report on the 20-year review and appraisal of the Beijing Declaration and Platform for Action (which 189 countries adopted as a blueprint to achieve equality for women) which found that not a single country has reached gender parity and equality.

That doesn't reflect the whole picture, as gender inequality overall has decreased and today's generation of women are benefiting from the Beijing Declaration's impact over the past 20 years. The problem is the pace of change, which demonstrates the scale of work still to be undertaken.

Gender equality in the UK - voluntary

That doesn't mean the UK Government has not addressed the issue of gender equality and equality in the boardroom in particular. It has, though, rejected the approach by the European Commission to impose mandatory quotas for listed companies to have female non-executive director participation of at least 40% in favour of a voluntary system.

If we go by the latest update from Lord Davies' Women on Boards report it shows that from 2011 to 2014, the proportion of women on the boards of the FTSE 100 companies has increased from 12.5% to 22.8%. In the same period there has been an increase from 7.8% to 17.4% among FTSE 250 boards.

If the current trend of the proportion of women on boards of FTSE 100 companies continues, the Government will have met its target to have 25% of women at board level in FTSE 100 companies by 2015, set back in 2011.

Gender equality in Scotland – a Pledge

Not that this will give companies in Scotland time to breathe. First Minister Nicola Sturgeon, as part of Scotland's first ever 50/50 gender balanced cabinet, has launched a "Partnership for Change Pledge" to achieve a 50/50 split on boards by 2020 ("50:50 by 2020"). While the Scottish Government is in favour of a quota system similar to that of Norway it doesn't yet have the power to legislate for gender quotas. This is a voluntary pledge to challenge all private, public and third sector bodies to achieve gender balance on their boards by 2020.

Regardless of the voluntary approach used by both the UK government and the Scottish Government, all companies will be under increased scrutiny to bring about equality in the boardroom. Lord Davies states that government must reserve the right to introduce more prescriptive alternatives if the recommended business-led approach does not achieve significant change.

It is clear that there is a real political drive to push gender equality. As this filters into public sector employers, it will also become, in the near future, a practical consideration for private sector employers also.