Women in Work

WIW 20

Written evidence submitted by TUC

Executive Summary

The TUC welcomes the opportunity to submit evidence to the BIS Select Committee on women in the workplace. While great strides have been made over recent decades in terms of increasing participation of women in the labour market, the fight for equal pay, promoting flexible working and tackling the gender pay gap, women’s position in the labour market is still far from equal to men’s. A shrinking public sector poses a great threat to women’s access to well paid, flexible work and decent pensions. Progress made in closing the gender pay gap has all but stalled. Occupational segregation, both vertical and horizontal, is still rife. The so-called "glass ceiling" still excludes women from the corridors of power and from a seat at the table in the board room.

 

In 2005 the TUC submitted detailed evidence to the Women and Work Commission – a Commission which examined many of the same questions that this Committee is now considering. The evidence is still available on the TUC website [1] , and is as relevant today as it was in 2005.

 

In this short submission, the TUC seeks to outline some of the key issues facing women in the workplace today.

 

1.1 Introduction

 

1.1 The TUC is the umbrella body for 53 affiliated unions with a total of just under 6 million members, working in a wide range of organisations, sectors and occupations. The TUC represents approximately 3 million working women.

1.2 Through its elected Women’s Committee, and annual Women’s Conference, the TUC formulates policies and carries out research and campaign work on a range of issues affecting women at work, from the gender pay gap and equal pay, to occupational segregation, to flexible working and family friendly policies, to discrimination and harassment.

2.1 Do the Gender Equality Duty and the Equality Act go far enough in tackling inequalities, such as gender pay gap and job segregation, between men and women in the workplace? 

 

2.1 The TUC does not believe that the Gender Equality Duty or the Equality Act go far enough in tackling inequalities between men and women in the workplace.

2.2 The TUC has long called for a statutory requirement for employers to carry out regular equal pay audits and we argued for such a provision to be included within the Equality Act.

2.3 We believe the if the voluntary approach to encouraging reporting on gender equality does not stimulate widespread activity in the private sector on tackling the gender pay gap in the next year then the power in s.78 of the Equality Act should be used.

2.4 The Gender Equality Duty has been replaced with the single Public Sector Equality Duty and the specific duty on tackling the gender pay gap in the GED no longer exists in England and for non-devolved public bodies in Scotland and Wales. The TUC is concerned that this will mean fewer public authorities having equality objectives related to narrowing gender pay gap.

2.5 Equal pay audits are the most effective way of ensuring equal pay for men and women doing similar work or work of equal value. As the EHRC’s statutory Code of Practice on Equal Pay states:

2.6 "Most employers believe that they provide equal pay for equal work, irrespective of the sex of the job holders or whether they work full or part time. An equal pay audit is the most effective way of establishing whether an organisation is in fact providing equal pay." [1]

2.7 The current government in its Modern Workplaces consultation on making equal pay audits a requirement for employers who have had a ruling against them at tribunal also stated: "They are the most effective way of establishing whether an organisation is providing equal pay and rewarding employees fairly." [1]

2.8 Various research has shown that there are a number factors responsible for the gender pay gap such as occupational segregation, time out of the labour market and periods spent working part-time, but there is still a sizable proportion of the pay gap that is unexplained and/or could result from indirectly discriminatory pay and employment practices. A recent report for the Government Equalities Office found 36% of the national gender pay gap was unexplained by observable factors. [1]

2.9 Equal pay audits involve:

· comparing the pay of men and women doing similar work, work rated as equivalent or work of equal value

· identifying and explaining any differences in pay

· eliminating those gender pay gaps which cannot be explained or justified on non-discriminatory grounds.

2.10 The government’s intention to make equal pay audits a requirement for employers who have lost a tribunal claim on sex discrimination in pay is a welcome step forward. However, it is likely to affect a very small number of employers. The government’s own impact assessment suggests it will only apply to 26 employers a year. [1] This is because it assumes the requirement will only apply to private sector employers who lose tribunal claims. Most equal pay claims from the public sector (which it is estimated have made up around 94% of the approx. 30,000 claims that go to tribunal each year) relate to legacy issues and action has already been taken in those employers either to do equal pay audits or implement new non-discriminatory pay systems for the future.

2.11 It is still incredibly difficult for individuals to identify potential equal pay claims, particularly in the private sector, where pay rates and practices are far less transparent. An individual often lacks the necessary information about potential comparator jobs and the associated pay rates, plus the necessary expertise to be able to assess where jobs might be considered to be of equal value.

2.12 A survey of large private and voluntary sector employers (250 or more employees) for the EHRC in 2009 found that very few of them encouraged a general culture of openness about pay. Just 4% formally made employees aware of how much colleagues in the same role were earning. 35% made employees aware of the pay band they were in but provided no more information. 51% said staff could discuss pay with their colleagues if they wished but the company provided them with no information about it. 18% said staff were discouraged from talking about pay with colleagues and 2% had contract clauses that staff could not discuss their pay with colleagues. [1] There were similar findings on openness about pay in research for the Government Equalities Office on medium-sized private and voluntary sector employers (150-249 employees). [2]

2.13 The TUC believes that all employers should be regularly required to carry out equal pay audits as the onus for ensuring compliance with the law and addressing any potentially discriminatory pay gaps should rest with them and not with individuals who have poor access to information and a lack of resources.

2.14 The government is placing more barriers in the way of individual claimants being able to take equal pay claims to tribunal. From summer 2013 it will cost £1,200 for an individual to lodge and get an equal pay claim heard at tribunal. The government has also proposed repealing the provision in s.138 Equality Act 2010 that enables an individual who suspects there is discrimination in pay to serve a questionnaire upon their employer to access information that would help them determine if this was the case and if they have a potential tribunal claim. [1]

2.15 A new provision was introduced into the Equality Act 2010 which was aimed at enabling individuals to share information with each other about pay. S.77 provides that a contract term that prevents an individual from discussing their pay is unenforceable if the pay discussion was in order to establish whether there has been discrimination. It also makes clear that colleagues who are found sharing information about pay for the purpose of establishing whether there has been discrimination are protected under the victimisation provisions of the Act. The TUC welcomed this provision.

2.16 However, s.77 must not be seen as an alternative to the statutory equal pay questionnaires. The employer is the one party who holds complete information about pay, job content, grading and other factors such as performance and experience for all employees. Individuals should have the right to obtain information from the employer and not have to rely on picking up incomplete information from discussions with colleagues.

2.17 The TUC believes the provision in s.78 of the Equality Act 2010 that gives a Secretary of State powers to introduce regulations requiring reporting on information related to the gender pay gap by large private sector employers should be used, if the voluntary approach to gender equality reporting is shown not to have widespread take up in the next year and/or there is poor quality reporting under that approach, particularly if few employers choose to monitor and report on progress on narrowing pay inequalities.

2.18 The former Gender Equality Duty included a specific duty which directed public authorities to consider the need to have an objective that addressed the causes of any differences in pay between men and women related to their sex. This specific duty encouraged most public authorities to take action on the gender pay gap. For example, the level of equal pay audit activity was considerably higher in the public sector than the private sector in Feb/March 2008 (43% compared to 23%), shortly after the GED took effect. [1]

2.19 For English and non-devolved Scottish and Welsh public authorities, there are just two specific duties under the new Public Sector Equality Duty in s.149 Equality Act 2010: one to publish equality information, which includes workforce information if there are more than 150 employees; and one to set "one or more" equality objectives. The EHRC non-statutory guidance to support the PSED states that it is "likely to be useful" to collect and consider disaggregated information on pay and notes that an equal pay audit would help demonstrate due regard was had to gender equality. But the gender pay gap and equal pay are presented as just one of many potential equality priorities and objectives that public authorities could select.

2.20 In Scotland and Wales, specific duties were introduced on equal pay and the gender pay gap to support the new PSED in s.149. Scottish public authorities have a duty to publish gender pay gap information from April 2013 and every two years after that and they also have a duty to publish a statement on equal pay from April 2013 and every four years after that. The statement must specify the public authority’s policy on equal pay among its employees and the degree of occupational segregation. In Wales, public authorities are directed to consider the need to have an equality objective related to differences in pay between employees with different protected characteristics. They must also set out their arrangements for identifying and gathering information on pay differences and, if they have identified any gender pay differences, and they have not published an equality objective to address the causes of such differences they must publish the reasons for their decision not to have an objective.

2.21 The TUC believes that after April 2013, there should be a comparative analysis of public authorities’ equality information and their objectives related to the gender pay gap and equal pay across England, Scotland and Wales to assess whether the Scottish and Welsh approach has resulted in greater activity among devolved public authorities. If it has, then the current specific duties for English and non-devolved public authorities in Scotland and Wales should be amended to take a similar approach to the devolved nations.

3.1 What steps should be taken to provide greater transparency on pay and other issues, such as workforce composition?

 

3.1 To clarify what is meant by transparency and why it is important, the Court of Justice of the European Union has held that pay systems that are not transparent are at greater risk of being found to be discriminatory. It defined a transparent pay and benefits system as one that should be capable of being understood by everyone (employers, workers and their trade unions), which means it should be clear to individuals how each element of their pay contributes to their total earnings in a pay period. Therefore, transparency is more than just publishing an overall gender pay gap figure, comparing the average pay of all men with the average pay of all women. There should also be transparency about the factors that determine pay and therefore pay differences.

3.2 As stated above, equal pay audits would contribute to transparency.

3.3 Having a clear pay and grading structure based on analytical job evaluation for the whole workforce, would assist all employees in understanding why they are paid what they are paid and how their role fits into the whole structure.

3.4 Collective bargaining also tends to mean much greater transparency in pay as information is shared with trade union representatives for the purpose of collective bargaining and there tends to be greater disclosure of pay between union members and their representatives.

3.5 Statutory equal pay questionnaires are an important mechanism for employees to ask for more information to help them understand their pay and whether discrimination is an issue. The government should not go ahead with its proposed repeal of these questionnaires.

3.6 S.78 in the Equality Act 2010 could be used to adopt Regulations that would encourage greater transparency around pay in the private sector. It should be used, if the voluntary approach to gender equality reporting is not taken up by the majority of large and medium-sized private sector employers and if, among those who are adopting this approach, there is little or very poor quality information on pay.

4.1 What has been the impact of the current economic crisis on female employment and wage levels? 

 

4.1 The current economic crisis and the government’s response of spending cuts have had a measurable negative impact on women’s employment and pay. The fact that more women are employed in the public sector than men has meant that public sector cuts, and redundancies have had a disproportionate effect on women’s employment and incomes.

4.2 Furthermore, the public sector pay freeze has depressed the pay of women in the public sector. TUC analysis outlined below shows how those women who manage to migrate from public sector jobs to private sector jobs are likely to face lower pay and a greater gender pay gap.

Women’s unemployment

4.3 In January 2000, there were 689,000 unemployed women and women’s unemployment rate was 5.2 per cent. By May 2012, the female unemployment level had risen by two-thirds, to 1,099,000 and the rate by nearly half, to 7.5 per cent. Women’s unemployment had been over one million for 24 successive months and women account for over 100 per cent of the increase in unemployment over the last two years:

Table 1: change in unemployment levels (000s)

	People	Men	Women
Apr-Jun 2010	2,471	1,478	994
Apr-Jun 2012	2,564	1,464	1,099
Change	+ 92	-13	+ 105

4.4 In the most recent data, 324,000 women had been unemployed for over a year. In July 2011, this figure went over 300,000 for the first time since 1993 and it has not fallen below that level since. Although there are still more men who have been unemployed for that long, the ratio of male long-term unemployment to female has been falling since the last century and this trend has, if anything, accelerated in the past five years.

4.5 Women’s chances of becoming long-term unemployed are still lower than men’s, but women’s likelihood of being in this position is increasing:

The impact of the recession

4.6 The recession played out differently for men and women; employment fell and unemployment rose for both, but neither was a mirror image of the other:

4.7 Initially, the effect of the recession was on men, especially on employment rates was more noticeable. The neologism "mancession" was even coined [1] to describe the early years of the recession when women appeared to fare better than men. Women’s employment rate may have levelled off before men’s, but women have not yet seen anything similar to the improvement in men’s employment rate that began in August 2011.

4.8 The recession drove men’s unemployment rate higher than women’s, but while men’s unemployment rate levelled off in 2010, women’s continued to rise, though at a slower rate. Men have seen a faster fall in unemployment since the autumn of 2011 and the gap between current rates and the pre-recession trough is similar for both.

Women’s Pay

4.9 The latest Annual Survey of Hours and Earnings (ASHE 2011) revealed some improvement in women’s pay relative to men’s. Between 2010 and 2011, the full-time gender pay gap reduced from 10.1% to 9.1% based on median hourly earnings (excluding overtime) as a result of women’s full-time median hourly earnings increasing at more than twice the rate of men’s (1.9% compared to 0.8%).

4.10 However, the overall gender pay gap for all employees based on median hourly earnings decreased only marginally from 19.8% to 19.5%. [1] This is because women’s part-time earnings did not improve as much as women’s full-time earnings and it is still the case that a substantial part of the female workforce is employed on a part-time basis (43% of women compared to 13% of men). [2]

4.11 Most striking of all when analysing the pay data for men and women is that the gender pay gap is significantly lower in the public sector. For full time employees, the gender pay gap is half that in the private sector. Part-time women suffer a significant pay penalty in both sectors but this is also lower in the public sector. The lowest paid part-time jobs for women are better paid in the public sector – the bottom 10% earn up to £9.98 an hour in the public sector compared to just £7.00 an hour in the private sector.

Gender Pay Gap (median hourly earnings, excluding overtime, for public and private sectors -2011)

	Public Sector	Private Sector
All Employees	18%	26.8%
Full-Time Employees	9.2%	18.4%
Part-Time Employees [1]	36.3%	42.8%

4.12 The expansion of public sector employment in recent decades transformed work opportunities for women. Women make up 65 per cent of the public sector workforce [1] and in many sectors such as local government and education there is an even higher concentration of women. Many women working in the public sector work in associate professional or professional level jobs such as nursing or teaching so there is less vertical segregation than in the private sector. Charts 1 and 2 below highlight how women in full-time jobs are more evenly spread through different earnings levels in the public sector than in the private sector where they are more concentrated at the lower end of the income distribution.

4.13 There appears to be greater opportunity for women to work on a flexible basis at higher levels in the public sector too. For example, there is little difference between the top earnings of full-time women across the sectors – the top 10% earn £26.51 or more an hour in the public sector compared to £26.97 or more an hour in the private sector. However, a comparison of part-time women’s earnings shows that while in the public sector the top 10% of women working part-time earn £22.54 or more an hour (15% less than the highest earning full-time women), the top 10% of women working part-time in the private sector earn just £14 or more an hour – half the amount the highest paid full-time women earn in that sector. [1]

4.14 Analysis carried out by the TUC using data from ASHE 2011 further explores pay for women in the public and private sector. This analysis finds that:

· Almost a third of women (28 per cent) working full-time earn less than £300 in the private sector compared to 8 per cent in the public sector.

· Over half of all women (56 per cent) earn less than £300 in private sector compared to just over a third (35 per cent) in the public sector.

· Over three quarters of women working part-time in the private sector (77 per cent) earn less than £200 compared to less than half (47 per cent) in the public sector.

· Low paid jobs are far more prevalent in the private than public sectors, with 17 per cent of full-time workers earning less than £300 in the private sector, compared to only 6 per cent of public sector workers

	ALL- FT & PT		FT		PT
	Less than £200	Less than £300	Less than £250	Less than £300	Less than £200	Less than £150	Less than £100
Public Sector ALL	15.3%	27%	1.7%	6.0%	47.3%	31.4%	19%
Private Sector ALL	20.2%	35.8%	7.6%	17.3%	76.6%	58.3%	32.5%
Public Sector MALE	6.8%	12.7%	0.7%	3.5%	46.8%	34.6%	21.6%
Public Sector FEMALE	19.9%	34.6%	2.4%	7.9%	47.4%	30.8%	18.6%
Private Sector MALE	10.2%	22.3%	5.2%	12.7%	75.6%	58.3%	33.1%
Private Sector FEMALE	34.9%	55.5%	13.2%	27.9%	76.9%	58.2%	32.1%

4.15 The following charts, using data from ASHE 2011, show the proportion of full-time women and men at different earnings intervals. It is evident that a higher proportion of women in the private sector are at the lower end of the income scale, whereas in the public sector there are more women higher up the income scale and, apart from at the very top and bottom, the women’s earnings distribution in the public sector more closely resembles that of their male colleagues.

Chart 1: Private sector distribution of gross weekly earnings for full-time employees 2011

Chart 2: Public sector distribution of gross weekly earning for full-time employees 2011

4.16 The impact of government spending cuts on public sector jobs will be severe. The OBR now estimate 710,000 public sector jobs will be lost by 2017. [1] It has been consistently argued by the TUC, the Fawcett Society, the Women’s Budget Group and others, that public sector job losses will have a disproportionate effect on women who make up the majority of public sector workers.

4.17 This is borne out by the latest labour market statistics. Women’s unemployment has been over the one million mark for the past 18 months. This is largely down to rapid and significant job losses in the public sector.

4.18 A recent GMB report shows that the drop in the number of women employed in local government and schools in England and Wales accounted for more than two-thirds of the drop in numbers employed by councils since the General Election. The GMB also reported that in 19 English Local Authorities women’s job losses accounted for 100% of the total job losses. [1]

4.19 While many hoped that private sector growth will provide new job opportunities for those becoming unemployed as a result of the public sector job cuts, the latest data shows that while public sector employment fell by 67,000 in the third quarter of 2011, private sector jobs grew by only 5,000. [1]

4.20 Even if women are able to find employment in the private sector it is questionable whether they will be able to attain the pay, pension and employment prospects of the jobs they have lost in the public sector. Many women could find themselves having to take lower skilled work and a significant pay cut. This would result in a widening of the overall gender pay gap and worsening levels of female poverty. And, given the significant contribution women’s earnings have made to low and middle income households over the past four decades, it could lead to poorer life chances for the hardest hit families too.

 

5.1 How should the gender stereotyping prevalent in particular occupations, for example in engineering, banking, construction, and the beauty industry, be tackled?

 

5.1 Gender stereotyping is still as prevalent as it ever was and can significantly impact a woman’s education, career trajectory, and consequently her lifetime earnings.

5.2 The gender stereotyping that exists across society cannot only be tackled at sector or industry level. The government should take steps to challenge the gender stereotyping that permeates society at all levels including in the media and in schools. Gender roles and stereotypes are "taught" to girls from birth and the media and education system have a key role to play in broadening young women’s horizons and showing them that they are capable of doing anything that their male classmates can do.

5.3 As the Women and Work Commission identified in 2006, young people’s career choices are often determined by what they study at school. More must be done to broaden young people’s horizons by offering careers advice free of gender stereotypes. Young women must be given information about the earning potential and promotion prospects of stereotypically feminine sectors such as the so-called "5 C’s" (cleaning, catering, caring, cashiering, and clerical).

5.4 The Women and Work Commission found that girls were often getting stereotyped careers advice, were not getting sufficient access to interesting work placements and work experience opportunities, were being failed by an apprenticeships system which perpetuates wider patterns of occupational segregation, and are often influenced by stereotyped and negative portrayals of women in the media. The Commission found that Careers Advisors rarely gave information about salaries and pay differentials, instead basing recommendations and advice solely on perceived preferences or personal interests of young people.

5.5 The EOC General Formal Investigation into Occupational Segregation (2005) found that two thirds of women are not aware of the pay differentials between typically male and female careers and 67 per cent of women aged 16-24 said they would have chosen different careers had they known more about the pay prospects of different careers.

5.6 Subsequent TUC reports [1] on gender and apprenticeships have found that patterns of occupational segregation and gender pay gap are as entrenched as ever and little has been done to implement the recommendations of the Women and Work Commission.

5.7 Gender stereotyping and the gender pay gap are inextricably linked. Attempts to address the gender pay gap must also take into account gender stereotyping and occupational segregation.

5.8 The TUC would encourage DfE and BIS totake steps to improve careers advice offering non-stereotypical information – including pay, training and prospects associated with different sectors – to all young people.

5.9 There should be a concerted effort by NAS to ensure that employers in male dominated sectors take proactive steps to recruit women apprentices.

5.10 The TUC also supports the recommendation of the Women and Work Commission that the DfE should draw up national guidance for EYFS teachers to ensure that pre-school and reception age children’s horizons are not limited by stereotypes reinforced in the classroom/nursery environment.

5.11 There is also a role for the DCMS in tackling negative and stereotyped portrayals of women in the media.

6.1 What more should be done to promote part-time work at all levels of the workplace and to ensure that both women and men have opportunities to gain senior positions within an organisation while working part time?

 

6.1 Well paid, part time work is crucial to improving rates of maternal employment and decreasing the gender pay gap. Unfortunately, while the numbers of women employed in part time work are increasing, opportunities for well paid part time work are not. This is a cause for concern for the TUC and for many campaigning for gender equality.

6.2 According to Walby and Olsen, part-time employment is apparently "the location where many of the factors that depress women’s pay and productivity are clustered. Part-time workers are engaged in the most segregated occupations, are among the least educated, would benefit most from training, and have the shortest employment histories". [1]

6.3 The majority of UK women with children under the age of 14 work less than 30 hours a week in contrast to other OECD countries. This may partly be explained by choice or preference but it also suggests barriers to maternal labour market participation. For example, the lack of affordable childcare in the UK is well documented, as is the lack of flexibility/long hours culture in many full-time roles. The extent to which women genuinely "choose" to work part time is debatable, given that their "choice" may be affected by a range of factors including the availability and affordability of childcare, the willingness of their employer to agree to them working part time, family pressure, perceptions of traditional gender roles, and the availability of other types of flexible working from their employer.

6.4 The gender pay gap is significantly more pronounced amongst part time workers. Median hourly earnings for part time women are 35% lower than for full time men. Furthermore, studies have shown that moving from shift from full time to part time work is associated with downward occupational mobility. [1]

6.5 The part time pay penalty is minimised if women stay with same employer when they make the move to part time working patterns. [1]

6.6 Employers could do more to think creatively about ways in which all jobs, not just the low paid jobs, could be performed by part time employees, job sharers and/or flexible working patterns (such as term time only, compressed hours, working from home etc). According to research by the recruitment company, Women Like Us, just 5% of job advertisements for part time jobs in London and the South East had a full time equivalent salary of over £20k.

6.7 The TUC has supported and worked with the DWP in their efforts to create a "strapline" or kitemark for employers advertising jobs flexibly. This is a welcome step in encouraging employers to think creatively about how they advertise jobs and about how promoting their commitment to flexible working may have a positive impact on how prospective employees may view their business.

6.8 The TUC believes that the current law governing the right to request flexible working should be strengthened and should be "Day One" right. It is only by making flexible and part time working more normal across occupations, sectors and industries that we can begin to lift the penalties against those who currently work part-time.

7.1 To what extent have the recommendations in Lord Mervyn Davies’ Report "Women on Board" (published in February 2011) been acted upon?

 

7.1 The TUC welcomes the determined efforts of Lord Davies of Abersoch to drive up the numbers of women on UK company boards. Lord Davies’ persistence and determination has led to a welcome increase in the number of women on company boards. [1]

7.2 However, the pace of change is still too slow. According to Lord Davies’ interim report [1] , within the FTSE 100, women now account for 15.6% of all directorships, up from 12.5%. However, within the FTSE 250, women account for just 9.6% of all directorships, an increase of just 1.8%.

8.1 To what extent should investors take into account the percentage of women on boards, when considering company reporting and appointments to the board?

 

8.1 The TUC supports the view that investors have a role to play in promoting best practice and in holding companies to account. Investors wield significant power and are able to influence corporate culture and decision making. Any pressure that investors are able to bring to bear on companies to encourage greater gender equality on boards would be welcome.

9.1 Why are there still so few women in senior positions on boards, and what are the benefits of having a greater number?

 

9.1 The barriers to women accessing board positions are manifold and complex. There is evidence to suggest that a large part of the problem lies in discriminatory attitudes and practices and well documented sociological phenomena of people choosing to hire people they perceive to be like them.

9.2 The impact of "old boys" networks on gender equality at board level is further compounded by a range of other issues including a lack of flexible working at senior levels in many sectors, lack of suitable or affordable childcare, limited workplace training and CPD opportunities for women, and the impact of maternity leave and career breaks on many women’s career trajectories.

9.3 The TUC believes that policies addressing the current obstacles for women to reach top positions, such as measures to reconcile work, family and private life for both women and men, fighting gender stereotypes in education and in the labour market, and engaging men in the debate should also continue to be promoted and adequate measures should be put in place.

9.4 The impact of higher representation of women on boards across Europe would be positive both in terms of furthering equality objectives and in terms of improved business operations and outcomes.

9.5 Lord Davies’ report cites a Canadian study entitled "Not just the right thing, but the bright thing" [1] which found that boards with three or more women on them performed better than all male boards in several areas including communication, employee and customer satisfaction, and corporate social responsibility.

9.6 The Davies report also cites a 2010 study by Harvard Business School which found women to be more assertive than men on certain important governance issues such as evaluating the board’s own performance.

9.7 The European Parliament’s Committee on Economic and Monetary Affairs [1] called on the European Commission to improve women’s representation on boards, emphasising that greater diversity would tend to reduce the sector’s vulnerability to crises, contribute to stability, and improve the quality of debate and decision making.

9.8 A McKinsey study of large European companies indicates that the best companies in terms of work environment, innovation, accountability and profits were those with a higher proportion of women on boards. According to their latest report, companies with a gender balanced composition can achieve an operational profit which is 56% higher than that of male only companies.

10.1 How successful is the voluntary code of conduct (a recommendation of the Davies Report) which addresses gender diversity and best practice, covering relevant search criteria and processes relating to FTSE board level appointments? 

 

10.1 While the TUC has been supportive of the Davies Review and welcomes the work of Lord Davies in raising awareness of the issue of women on boards and in persuading companies to improve the gender balance on their board, it is clear that voluntary approaches, incentives, and "comply or explain" approaches have had limited impact to date.

10.2 Norway is the only country which has successfully made swift and meaningful changes to the representation of women on company boards and it did so by implementing quotas.

10.3 The TUC believes that more must be done to even out the playing field in the world of corporate boards. Quotas are one of a host of measures in the government’s armoury which should be deployed in order to achieve change.

10.4 The TUC also supports a range of measures and mechanisms to address the problem of under-representation of women on company boards.

10.5 Mentoring schemes, voluntary codes, best practice examples, changes to the practices of Executive Search Firms (ESFs), and increased transparency in recruitment processes all have a role to play.

Summary

While the TUC believes that there are many obstacles to gender equality in the workplace, it does not believe that these obstacles are insurmountable. There is clearly a good deal that all government departments, employers, and trade unions can do to address the many issues set out in this submission.

 

The TUC would urge the Committee to revisit the Women and Work Commission’s report which made a number of very detailed and practical recommendations on a range of issues being explored by this inquiry.