Gender Balance on Corporate Boards

Fiona Mactaggart Excerpts

Monday 7th January 2013 Commons Chamber

[Matthew Hancock]

It might be that this debate and the decision of Parliament that will follow will be brought to the FRC’s attention. I wonder who might do that.

Of course, we share the Commission’s view that fair opportunities for women in executive and non-executive posts should be promoted and we are happy for the EU to disseminate good practice across member states, but it is up to member states to find their own national approaches. Many member states are considering, or have implemented, various and differing national measures on a voluntary basis to facilitate raising the proportion of women on boards. Some have decided on domestic legislation and some, like us, think that we can get there without it. That multitude of approaches is likely to help us find which one works best and has the most benefits and the fewest unintended consequences. The reasoned opinion is intended to set out the views of Parliament separately from the views of the Government, so I am very much looking forward to contributions on that front from Members in all parts of the House.

Let me turn to a couple of the specific questions from the European Scrutiny Committee. The Committee asked for the Government’s view of the Commission’s projection that only 17% of UK listed companies would have 40% women directors by 2020. It is safe to say that the Commission’s projections are rather out of date, because we already have 17% women directors in the FTSE 100. The Commission’s analysis is based on extrapolating the increase in the number of women on boards in the period 2003 to 2011 and using a linear progression, but, as we have already discussed, the rate of change increased markedly at the back end of the last decade, and we will be within a whisker of reaching the target that the Commission has set by 2020.

The Committee asked whether the Government consider that the measures proposed by the EU would be counter-productive. It is true that legislation can have unintended consequences, and if an objective can be reached without legislation it is usually better to do so.

Finally, the Committee asked about the outcome of the Government’s consultations on the proposed directive and the progress on negotiations. We are discussing the proposals broadly, but negotiations in Brussels have yet to start.

[Fiona Mactaggart (Slough) (Lab)]

The Minister said—I have some sympathy with this view—that if we can succeed without legislation, that is preferable because there are downsides to legislation. Will he undertake to ensure that we will have an annual report on progress and some suggestions about action that could be taken if the rate of success that he predicts is less than he hopes for?

[Matthew Hancock]

We have had a report on this. There are constant reports—for instance, I commend to the hon. Lady the 30% Club website, which has a quarterly update of the numbers—and there are many opportunities to debate this in the House. The most important thing is that we should try to get there without legislation, and certainly there does not need to be EU-level legislation, as it is something that this House can perfectly well do on its own. Having more women on boards is right, and it is good business, but it should be the responsibility of this House.

I am grateful for the European Scrutiny Committee’s work. We would argue that legislation is not necessary now. Yes, there is more work to do to promote women on boards, and we and British business are doing it. I commend the motion to the House.