To address poor representation of women in the boardroom, the Investment Association, a trade body for UK investment managers, and the government-backed Hampton-Alexander Review have written to 69 companies on the FTSE 350 calling on them to have 33% of positions on their boards and leadership teams filled by women by 2020.
But is positive action, like insisting on quotas for boards, the right way for employers to address the imbalance?
Many businesses have been making high-profile, public statements on their efforts to build greater gender diversity. For example, accountancy giant PwC has recently announced a ban on all-male shortlists. But when focusing on the worthy aim of increasing female representation at board level it is important not to lose sight of the law and the risk of discrimination claims.
Positive action may seem like a sensible way to ensure greater diversity in the recruitment process, and subsequently in the workforce, but as employment law specialists we are all too familiar with the errors that can trip employers up. Well-intentioned employers may get things wrong; for example by not thinking through the full implications of the wording in job adverts for directors, company policy statements and the requirements they place on the role, or indeed where they advertise them.
Well-meaning attempts at positive action can go too far, becoming illegal discrimination against male applicants who could then bring claims against their employer. Employers should therefore carefully consider whether positive action is an appropriate and proportionate means of achieving greater representation of women in the boardroom or a would-be breach of discrimination legislation.
The Equality Act 2010 contains provisions for positive action, which can be lawful where people who share a protected characteristic are disadvantaged or are disproportionally under-represented. What is critical here is that any action taken is proportionate. In recruitment and promotion specifically, the candidate has to be 'as qualified as' the other candidate, and the employer should not simply have a policy of treating those with the shared protected characteristic more favourably.
There’s no doubt that a more diverse leadership team is a good thing. But quotas can lead to the perception that it is at the expense of other suitable candidates, and employers could therefore open themselves up to a challenge.
Ultimately employers will benefit from embedding a culture of diversity within their organisations. However, they do need to ensure that everything from the wording used in job adverts through to the recruitment experience and onboarding of new staff incorporates equality and diversity. Managers need training on effective management skills, interview techniques and managing their conscious and unconscious bias when interviewing. Staff need to be encouraged and have the confidence to apply for promotions and new roles within the organisation. Again, managers play a key role here.
An instant reaction and arbitrary change in recruitment processes will never solve the fundamental issues that affect diversity in the workplace. If you are considering taking positive action to encourage greater diversity then it is best to get advice from an employment lawyer to fully understand the legal implications first, and to help minimise any risks.
Pam Loch is managing director of Loch Associates Group and managing partner of Loch Employment Law