International Women’s Day

My Lords, I am delighted to be speaking in this debate after the noble Baroness. As she said, she and I came into your Lordships’ House on the same list many, many years ago. We have debated from the Front and Back Benches on both sides of the House, during which time she has championed the cause of women not only in politics but also in business and industry. Over those many years, she has been proved right. We have seen a growing body of evidence that diverse workforces are best placed to deal with the challenges of business and industry. We have also seen that gender equality is not a luxury; the economy really benefits from having a diverse workforce, in which the inclusion of women is paramount. Indeed, some economists now say that social capital is the true engine of our economy. I cannot remember a time when this has been more important. This is one of the deepest recessions that I have known and we need growth to work our way out of it. Women provide a source of significant growth in business numbers in the United Kingdom. If the United Kingdom had the same level of female entrepreneurship as the United States, there would be approximately 600,000 extra women-owned businesses in this country. Just think what that would do for growth. This is why we need an Equality Bill and this is why the Government are right to pursue family-friendly policies. However, there is no magic formula. International comparisons are difficult. In Sweden, for example, despite its family-friendly policies, only 1.5 per cent of senior managers are women, compared with 11 per cent in America. Quotas may work in Norway, but I am not sure that they would work here. We have to work out our own effective gender equality policies and practices. Fortunately, to help us to do this we have some important research. Recently, the Government Equalities Office examined diversity on public and private boards of directors. They found that many of the obstacles faced by women are arguably similar to those faced by other underrepresented groups, such as people from ethnic minorities or disabled people. They identified the obstacles at three levels: individual, interpersonal and process. The research showed that, contrary to popular opinion, there are plenty of women able and willing to work in business and industry and to sit on boards. Stereotyping leads people to underestimate their competence, aspiration and merit. That is why we need to encourage the aspirations of women and why line managers must give others confidence through coaching and mentoring within the working environment—the kind of thing that the Chartered Management Institute does to support female managers. The research also found what we all suspect: members of underrepresented groups are excluded from the influential, informal networks that are crucial for career progression. This kind of culture is inhospitable to women, which is why the Women in Management Network is so important. Again, the research identified something that we all know: in many cases the recruitment process is unnecessarily opaque, with unclear selection criteria and practices that are open to bias. If we are to have diversity in this country, the appointment process has to be much improved. These findings seem to apply to women going into business and industry generally and not just to boards of directors. It also seems that these are as much failures in corporate governance as in process. If the voluntary code of corporate governance does not deal with this, it will encourage a move towards corporate governance by legislation. The Financial Reporting Council is currently consulting on changes to the UK corporate governance code to encourage more diversity by not restricting the talent pool. The consultation closes tomorrow, so perhaps the Leader’s office could send a copy of this debate to the council as a contribution towards the consultation.