24 January 2013
Employment Lawyer Welcomes Revolution on Gender Discrimination
Embarrassing old relics of a bygone age? Republicans might argue that that describes the monarchy, but perhaps more accurately it describes old laws on royal succession discussed in Parliament this week.
Reform is timely, given the Duchess if Cambridge's pregnancy. It would be outrageous if a daughter born to the future Prince of Wales had to give up the throne to a younger male sibling, perpetuating the sexism of antiquity.
Yet, surely if an institution as ancient and creaking as the monarchy can finally be gender equal, the fast-paced world of business can do the same? It's about time something changed. Almost half a century after Equal Pay first became the law; men are still on average paid about a fifth more than women. And get 93% of executive directorships on FTSE100 boards.
Mere laws that prohibit sexism in the workplace clearly aren't enough. Although workplace discrimination is against the law, that is routinely flouted, with apparent impunity - looking at these stats. It's time UK plc rolls up its sleeves and shows that it means business on this.
Reforms to the Companies Act will mean that companies soon have to report how many men and women they employ. But while that's a step in the right direction, it is just tinkering around the edges. Radical changes need more than this.
For shareholders truly to be empowered to hold companies to account on Gender Discrimination - and bring about a demand-side revolution - they need information on gender pay. After all, if there is a huge unexplained pay differential, that equates to major corporate risk on litigation. Totting up the potential payout on Equal Pay Claims ought to concentrate the minds. Risk reporting is a straightforward, simple measure that makes business sense. We are calling for companies to be required to disclose their financial exposure to litigation, including potential equal pay claims, as a matter of basic transparency.
Logically, the market could then reward good governance. Shares in a company that has its house in order have to be worth more than those that don't. But if companies don't report accurately on litigation risk, the market is in the dark. And it is the shareholders who unwittingly invest in risky companies that will suffer.
When even the Royal Family are ahead of the game, it's time for the markets to step in and make a correction. Risk reporting is a business solution to a business problem.
Samantha Mangwana is an Employment Solicitor at Slater and Gordon Lawyers in London.
For more information call Slater and Gordon on freephone 0800 916 9060 or contact us online and we will call you.
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