CHAPTER 4: MAINTAINING PRESSURE: MONITORING
PROGRESS
Company scrutiny
74. To encourage the sustainable change that
we wish to see, we need to make sure robust data are in place
to allow progress to be monitored. Witnesses stressed that transparency
of this kind strengthened accountability and facilitated realistic
target-setting. The National Employment Savings Trust (NEST),
an institutional investor, quoted management guru Peter Drucker
when noting that, "what gets measured gets done".[145]
Despite this, the Government said that many companies did not
compile statistics on gender diversity in their organisation,
despite having the raw data available.[146]
The European Women's Lobby agreed: " … most companies
… do not have the necessary statistics and do not really
know exactly what their situation is at every level of corporate
governance".[147]
This is not an acceptable state of affairs.
75. The best means of performance monitoring
divided witnesses. Some agreed with the drive for European-level
mechanisms.[148] For
the Austrian Federal Chancellery and the ELA, this meant national-level
monitoring with reporting at EU level. Others wanted a more devolved
approach. For the 30% Club, progress was best measured voluntarily
at local levels, using resources such as BoardWatch[149]
and the Cranfield Female FTSE report.[150]
This was also the stance of the Government: the Minister said
that the "very different circumstances" of Member States
counted against EU monitoring.[151]
IDDAS, a leadership development consultancy, and GC100, the association
of general counsel and secretaries of FTSE 100 companies, agreed
with local monitoring, but wanted reporting to be obligatory.[152]
76. We support strongly the development of a
European mechanism for monitoring gender diversity levels across
the EU. Without firm information, it is difficult to gauge the
extent of problems across and within companies, or to monitor
the effectiveness of measures to address them. A co-ordinated
data collection framework would allow progress to be compared
between Member States, and support investors in scrutinising the
progress of individual companies.[153]
As the Commission noted, this need not be a burdensome requirement
given the current availability of much of what would be required.[154]
Furthermore, varying national circumstances merely indicate the
need for careful interpretation of statistics that emerge, rather
than entirely ruling out the collection of valuable data. We therefore
reject the Government's contention in this respect.
77. We are convinced that a legislative reporting
duty is the most appropriate way to establish such a framework.
To ask for such data on a voluntary basis could lead to lower
compliance rates and an unacceptable time lag before robust data
were in place. Legislating to establish a firm evidence base,
at a time when the question of the effectiveness of Member State-led
efforts is the central issue of the debate, would demonstrate
the EU's leadership and commitment to evidence-led policymaking.
78. It is crucial for the data to look beyond
the boardroom.[155]
PWC considered the proportion of women on the board, in senior
executive positions and in the organisation as a whole to be a
"baseline level of disclosure".[156]
We agree. We note the possibility of definitional issues as the
scope is widened, as highlighted by the Institute of Leadership
and Management (ILM),[157]
but this only demonstrates the importance of setting clear criteria
at European level as to the data being sought. Aligning definitions
is not an insurmountable task, and should not be considered a
barrier to progression. We are glad to see that provisions to
this end are being consulted on in the United Kingdom.[158]
If the Government oppose legislative intervention from the EU,
we urge them to take this idea forward and to demonstrate the
effectiveness of these efforts.
79. The responsibility for deciding who should
collect the data, whether a public or private sector body, should
be left to Member States. Similarly, the approach to non-compliance—for
example the issuing of fines, or the adoption of a "comply
or explain" approach—should be a national matter. This
approach respects national systems, but realises the benefits
of looking at the issue Europe-wide. In so doing, it would respect
the principle of subsidiarity.
80. The data should not be used simply as a means
to berate companies who are not making progress. Encouraging companies
to engage with the agenda requires policymakers and the media
to celebrate the undoubted good work going on, as well as to highlight
those who are under-performing.
81. Robust EU-wide information is essential
to assessing progress made by companies in addressing issues of
gender inequality in the labour market; it must be collected more
comprehensively and rigorously than it is today. The Commission
should, in any legislation it introduces, require companies to
report on the proportion of women at every level of their workforce.
Data should be collected at a national level by each Member State.
82. At a minimum, companies should be required
to report on the number of women on the board, in executive positions
and in the organisation as a whole. In the United Kingdom, we
support the Government's proposals to introduce such reporting
standards in October 2013 for large and medium-sized companies,
to ensure that as much of this information is available as soon
as possible.
83. These figures should be monitored
on an annual basis by the Commission, to determine whether sustained
progress is being made and to inform possible policy responses.
The information should be used by policymakers and the media to
identify and promote examples of best practice, as well as to
draw attention to poor performers.
Member State policy monitoring
84. We do not wish to restrict the focus of monitoring
simply to the actions of companies. The actions taken by Member
States to foster their engagement are just as important. The data
collection we advocate above provides one way to do this, but
we must also be clear how, in policy terms, governments are responding
to the challenge.
85. The Confederation of British Industry (CBI)
proposed action in a style similar to that of the European Semester,
a surveillance programme operated by the EU. In that programme,
Member States make submissions on their economic policy progress
and the Commission reports on their activities, with the report
then scrutinised by national parliaments. Neil Carberry, Director
of Employment and Skills at the CBI, posited that Member States
could submit their work on gender diversity for similar evaluation.[159]
86. We support this as a template for action.
We appreciate, though, the level of rigour involved in the European
Semester, so would urge the Commission to use as a base for this
work its existing progress reports on women's participation in
economic decision-making'.[160]
By expanding this system to involve more detailed reporting from
Member States, and bringing it within the formal parliamentary
scrutiny process, national parliaments and the public could hold
governments to account more effectively for their policies in
this area. Furthermore, as the approach is similar to the progress
reports that the Government already commission from the Cranfield
School of Management, it would be especially easy for the United
Kingdom to participate without undue administrative burden.
87. Governments should be scrutinised for
their actions to improve gender diversity in the labour market,
to keep up the pressure for change. Comparing the actions taken
in different Member States enhances this scrutiny and offers the
possibility of exchanging best practice. The Commission should
therefore expand its reporting work on women's involvement in
economic decision-making in a style similar to the reporting process
in the European Semester economic programme. In short, Member
States should provide more detailed policy information and statistics
on progress made in improving gender diversity, and the Commission
in turn should provide individual national and comparative European
analysis on the work being done. Such assessments should then
be brought within formal national parliament scrutiny processes
and form part of the evidence base when considering the future
case for any legislative action in this sphere. This would establish
a rigorous and accountable assessment framework at all levels.
145 See also PWC, EWL, An Inspirational Journey, ILM,
Q188 (Michael Reyner, MWM Consulting; Kate Grussing, Sapphire
Partners) Back
146
Q24 (Jonathan Rees, GEO) Back
147
Q278 (Sonja Lokar). See also Q188 (Kate Grussing, Sapphire Partners) Back
148
Aviva, ABI, Arlene McCarthy MEP, TUC, NHO, Q97 (Dr Karen Jochelson,
EHRC), Q188 (Kate Grussing, Sapphire Partners) Back
149
Professional Boards Forum, BoardWatch, The rate of new appointments
to FTSE 100 and 250 companies, op. cit. Back
150
See also Mentoring Foundation, Aberdeen Asset Management, Marina
Yannakoudakis MEP Back
151
Q290 Back
152
IDDAS, GC100 Back
153
This was acknowledged at Q130 (Otto Thoresen, ABI) Back
154
European Commission Back
155
ILM, TUC Back
156
PWC. See also GC100, ELA Back
157
ILM Back
158
Department for Business, Innovation and Skills, The future
of narrative reporting: A new structure for Narrative Reporting
in the UK, October 2012 Back
159
Q155 Back
160
See European Commission, Women in economic decision-making
in the EU: progress report, op. cit. Back
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