30 October 2012
Employment Lawyer Kate Warrington discusses the European directive on female board quotas
Equal Pay for woman became a legal requirement following the Equal Pay Act of 1970. 5 years later the prohibition of Discrimination, primarily preventing discrimination against women in the workplace, was introduced. This month, some 41 years later after the first step was taken to protect women's rights in the UK, the EU has asked the question as to whether or not a law needs to be introduced to ensure that woman are sufficiently represented on company boards.
It's widely accepted and acknowledged that the majority of senior positions within organisations are held by men and this has been the subject of criticism by the European Central Bank. This critique has led the European Parliament to consider the introduction of a Europe-wide mandatory quota for women on company boards. To solve the problems with inequality the European Parliament will vote on introducing a 40% mandatory quota for companies by 2020.
Norway has had a 40% mandatory quota for 9 years and a number of EU member countries, such as France, Spain and Italy, also have quotas. Many believe that it's not enough to expect companies to have voluntary targets and whilst the UK has made progress last year only 16% of FTSE 100 board members were women - this is some way off a target of 40% and without new legislation on the matter it is unlikely that UK companies would hit 40% by 2020 of its own accord.
Most people are in agreement that women should be paid, and treated, exactly the same as their male counterparts and yet in practice we all know that this, unfortunately, doesn't happen. In the last year alone Russell Jones & Walker, part of Slater and Gordon Lawyers has represented hundreds of women whose rights have breached. Whilst the glass ceiling in the UK has taken a few blows over recent years it still exists and many women remain on the back-foot. Indeed, this was one of the reasons why it has been proposed that the Companies Act (Strategic Report and Directors' Report) Regulations 2013 include an express provision that quoted companies are required to disclose the number of woman on the board, in Senior Executive positions, and in the whole organisation.
The UK clearly has the talent available for women to progress within businesses, for example women make up around 50% of the student body at the London School of Economics and Political Science and women have made up more than half of graduating professionals in law and medicine for over 20 years. The issue is that greater support is required for women at lower levels and at all stages of their career to enable them to reach their full potential and progress. This means companies need to introduce clear career plans for women, which take into account Maternity leave and childcare responsibilities. This is what the UK needs, alongside mandatory targets, to make sure that women are sufficiently represented at board level.
There has been great debate on the proposals and the European Parliament is now reconsidering the scope of the proposals, discussions have been postponed until 14 November; the result of which will be eagerly awaited by many.
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