Gender equality has been highlighted as an important electoral issue in the political manifestos. All of the main parties want to see better conditions at work for women and they welcomed progress on female representation on boards – vouching to do more, though shying away from embracing quotas.
But what is holding women back when the business case for gender equality is so clear? After all, as Fiona (now Dame) Woolf said in her foreword to Yvonne Thompson’s book 7 Traits of Highly Successful Women on Boards, it is now clear that “the better the gender and diversity mix, the better the [organisation’s] performance”.
Newton Investment Management’s Helena Morrissey wrote in City A.M. this month about new research from Judge Business School which, based on data from 41 countries, suggested that the higher women’s economic power, the more likely were they to be on company boards. That economic power was measured in terms of expected years of girls’ education and also the percentage of women in the labour force.
This is a significant finding and, in my view, reinforces the concerns that still exist in relation to women’s progress in this area in the UK. For one, the evidence suggests that women in the UK now outperform men in educational achievement. Recent figures from Ucas, the universities and colleges admissions service, showed that women are a third more likely to enter higher education than men. Among 18 year-olds, 34 per cent of women were allocated university places compared with 26 per cent of men, the widest this gap has ever been.
Put another way, four out of every seven higher education places are now going to women. What is more, the employment rate for women, though still some 10 per cent below that for men, is at 68.5 per cent, the highest since records began in 1971.
Yet women are still very badly under-represented at the top in most walks of life. Today, 93 per cent of executive directors are men and 77 per cent of Parliament is male. And this is replicated across many sectors of society. In medicine, for example, hardly any heads of hospital trusts are women, and a very small number of women are top consultants or chief executives.
Women enter academia in droves. Yet according to the Times Education Supplement, in late 2014, some 78 per cent of professors, 72 per cent of senior managers, and 81 per cent of vice-chancellors in the UK were men. In law, where women represent 62 per cent of those entering the profession, less than a third of partners are women.
Of course, women do have power in terms of being responsible for some 70 per cent of all purchasing decisions made. Nevertheless, their actual earning power still lags considerably behind that of men and this limits their influence. Not only are women more likely than men to be in what is now termed less well-paid “casualised” labour, but a pay gap persists even as they increasingly penetrate more highly-paid occupations. The pay gap for health professionals, for example, remains a high 15.4 per cent, and data from the Equality and Human Rights Commission at the beginning of the coalition was suggesting that, in the financial sector, women working full-time earned 55 per cent less annual average gross salary than their male colleagues.
So how do we ensure that we prepare women well for the boardroom? The answer is by reducing obstacles further down the chain and by requiring greater transparency on pay from the larger firms. All main parties included policies in this area and also focused on the need to reduce the cost of childcare for working families. The latter is a necessary (though not sufficient) condition for ensuring that more women join the workforce or return to work after giving birth. It thus also addresses the pay gap, which widens considerably once women have children.
Losing so many women from the workplace, or having them return to work in less productive roles below their skills levels, is a waste of productive capacity in the economy and consigns us to lower growth rates for years to come. Boards are a good indication of progress in gender equality, but still only a limited one. And even here the not-too-ambitious target of 25 per cent female board representation by the end of this year for larger quoted companies is being met to a considerable extent by part time external appointments, rather than by the promotion of women executives from within the organisation.
Unless companies are made to rethink their internal cultures and their pipelines for promotion through direct government intervention, such as the imposition of (possibly temporary) quotas, progress will remain painfully slow.