Real change on business boards requires a quota set out in law

30 July 2018

Labour Equality spokesperson Cllr Deirdre Kingston has said if we want to see better balance on the boards of listed companies, Ireland should introduce a legally binding quota of 30% as a first step, for non-executive directors, as applies in countries like Germany.

Cllr Kingston said:

“The initiative by the Government to increase the representation of women at senior levels of business is welcome, but real change will only happen if a legally binding quota is applied to the boards of listed companies for non-executive directors. The Government have announced lots of initiatives and proposals in the last year, but very little of substance has changed since the measures put in place by the Labour Party up to 2016.

“Norway has for many years had a legal quota requirement of approximately 40% of each gender on every company board. In 2015, Germany passed a law that requires companies to give 30% of non-executive board positions to women.

“Ireland should also now introduce legal changes similar to those in Germany to ensure a minimum of 30% of non-executive directors on the boards of listed companies are female to start with, rising over a number of years to 40%. Informal industry groups will only go so far. Less than 20% of directors of Irish ISEQ20 companies are women. It’s clear that more radical change is needed.

“Ireland still has a long way to go on gender equality, as the changes needed must happen much earlier in a woman’s career. Women must also be promoted into leadership positions in the first place.

“The measures introduced by Labour to ensure a minimum of 40% of State board appointees have been successful with 40.6% now in place, but more action is needed. The Labour Party has proposed that this should now be increased to 45%, with a minimum legal target of 30% for every State board. And its not just about Boards, but other State appointments and committees. For example last week the Government set up a Constituency Commission to review the EU parliament constituencies, with five appointees, all of whom are men.

“The dismal figures for women in leadership roles in Irish business means that we should now consider a similar target to that passed in Germany.

“Such a measure would over time ensure more women are in senior positions, and then ensure more female candidates are readily identified for running companies.

“Other measures could include ensuring interview boards within companies for hiring and promotion are gender balanced, while the Labour Party bill which proposes that all companies over 50 employees publish gender pay gap if passed will also raise awareness of the problem of lack of promotion of women and help change the culture.

“There are other issues including the glass ceiling effect; that women taking career breaks to have kids subsequently missing out on promotions; and an unconscious bias that might see employers hire a man over a woman over concerns they might go on maternity leave, which are all part of a wider issue that prevents women rising up the ranks to be on boards in the first place, and then ready to assume CEO positions.”

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