Hampton-Alexander Review business briefing
First Minister Nicola Sturgeon
11 January 2018
I want to start by paying tribute to the late Dame Helen Alexander. Dame Helen was of course a hugely successful businesswoman in many different roles – including as Chief Executive of the Economist Group, as the Chair of UBM, and as the first ever female president of the CBI. She was also a strong champion of diversity in companies, and a role model for many women in business.
The diligence and rigour of the Hampton-Alexander report – and because of that, the impact it is having – is in itself a testament to her influence, and also, of course, that of Sir Philip. I am delighted that he is here this evening.
Now, the case for gender equality on boards is an overwhelming one. Firstly, there is a basic moral issue at stake. It can’t possibly be right that women, who make up half of the population, make up just over a quarter of board positions. That injustice on its own should drive action by government and by business.
However there is also an important economic point. It stands to reason that we will do less well as a country, if we systematically underuse, ignore or discriminate against the talents of half of our population. Yet that is what we have been doing for countless generations
The Hampton-Alexander review shows why this matters for individual businesses. It brings together and highlights the evidence that “diverse teams produce better results”, and that “women often represent a valuable and under-utilised talent pool”. It helps to reinforce the fact that gender inequality isn’t simply immoral – although it is – it is also economically damaging.
So improving women’s participation – not simply at board level, but across the economy as a whole – must be a priority for all of us. And it’s an area where I believe it is important we should acknowledge the important progress that has been made
As recently as 2011, if you looked at the boards of companies on the FTSE-100, only 1 in 8 members was a woman. Now, the proportion is above 1 in 4. In 2011, 20 companies in the FTSE-100 had no female board members at all. Now, that figure is zero.
And the progress report for the Hampton Review which was published two months ago included some hugely positive stories of companies which are becoming better businesses by making changes – sometimes quite straightforward ones – which have significantly improved the diversity of their boards.
I understand that at least 5 of the companies highlighted in the report - Bar Systems, Lloyds Banking, Sainsbury’s, Senior PLC, and Virgin – are here this evening. I’m glad they - amongst the many other companies who are here tonight - have been able to recognise the benefits of gender equality and have taken steps toward making it a reality.
But we know that we still need to do far more. 1 in 4 board members is certainly better than 1 in 8, but it is not nearly enough.
And although I’ve emphasised some of the good news contained in last November’s progress report, some of its statistics were actually quite concerning. For example, the progress we saw between 2011 and 2016 seems to have slowed down or even stalled in the last year.
So instead of progressing to equal representation, there is a danger that without a renewed impetus and continued momentum, by 2020 we could still have a situation where fewer than a third of board members are women.
And there also remains a significant under-representation of women on executive committees, and among people who are directly managed by executive committee members. Across the FTSE-100, less than a fifth of Executive board members are women. And if you look at the FTSE-250, the proportion is less than a sixth. So clearly that isn’t enough and we need to do even more.
We don’t just need women on boards, we need women at all levels in every business. One of the realities that many companies will often cite to me is that unless we see woman at all levels of the economy, getting that representation on boards will continue to be challenging.
My message this evening is twofold. Firstly, to celebrate the progress made, and we mustn’t lose sight of that. And also to urge greater progress and ensure all of us do not take the foot off the pedal.
The Scottish Government is determined to work with businesses, supporting them in whatever way we can to to take action.
Now of course, no element of gender inequality exists in isolation. The lack of women on boards is a symptom, as well as being a cause, of wider gender inequality.
So I am very conscious of the need to take steps to promote gender equality across all of society more generally – such as tackling violence against women both through legislation and changing culture; it’s important to addressing gender stereotyping, in both directions.
We also must invest in childcare, which we must see not any longer as just a social issue but a core economic issue. Good quality childcare is part of the essential infrastructure of a country. It’s as important to parents, and woman in particular, when it comes to getting to work in the morning – just in the way good transport links are. So we must see these kinds of issues as central to what we are trying to achieve.
I recently appointed a new advisory council on women and girls, bringing women and girls from a broad spectrum of society together to further advise me and my government on what steps we can take to support greater gender equality, and support action to make the environment easier for businesses to take the steps we are asking of you.
We are also taking very specific steps to promote equality in business and across the economy. Our 50/50 by 2020 campaign encourages organisations and businesses to achieve gender balanced boards by the end of the decade.
I know business feel they would like to have 50/50 representation, but if you commit to even 40% then we can get to that goal as a result. In Scotland we have more than 200 organisations have already signed up - including Virgin Money, Alliance Trust, National Theatres Scotland and many more.
We’re also taking some practical steps to help deal with the barriers achieving equality. We have established a returner’s programme to help women to re-enter the workplace following a career break. That helps to address one of the key barriers that women face as they make progress throughout their careers.
We’re encouraging more women to set up and run their own businesses and to become entrepreneurs. This is a statistic that I cite often as I think it does a lot to illustrate the point I made earlier – that we need greater representation of woman to support our economy.
The statistic is this: If as many businesses in Scotland were owned by women, as are currently owned by men, it could boost our GDP by 5% - creating new jobs and opportunities across the country. So that brings home the economic consequences of what we are talking about.
And I am determined, as First Minister, that as well as asking all of you to do the right thing, my government has a duty to lead by example. One of my first actions as First Minister I decided to appoint a gender balanced cabinet - something I am disappointed the Prime Minister did not take the opportunity to do earlier this week.
After I appointed a cabinet that was equally balanced with men and women I received some messages that were really quite eye opening. I received emails and letters, including from women – and many were very positive – but many asked how I could know whether all the woman in my cabinet where there on merit. I didn’t get a single letter asking me how I knew all of the men were there on merit. And that I suppose illustrates a key point.
Women, as we all know, make up around 50% of the population. So unless you take the view that woman are somehow inherently less able than men, the alarm bells about merit should be ringing when boards and workforces are not gender balanced. That is a point I think we must never forget.
As well as within the cabinet, the Scottish Government is also trying to lead by example when it comes to public sector boards, demonstrating that it is possible to try and form gender balanced boards. Not overnight, but over a reasonable time.
When I became First Minister in November 2014, the proportion of women on those boards stood at just over 38%. Now, it is almost 46%. Last year, 59% of new board appointments were women, and by 2020 all public boards will be 50/50.
This demonstrates that progress can be made reasonably quickly. And that’s why we have legislated to introduce the Gender Representation on Public Boards Bill.
If I am going to ask businesses to try and achieve this on company boards, I think we have a duty to show it can be achieved on public boards. And that is why it is important that we continue to see momentum and the kind of progress that we have seen in the last few years.
Just as I conclude my remarks I want to end by being optimistic. I actually feel that not just on equal representation on boards but across the whole spectrum of issues where we still have gender inequality, I believe that now in 2018 we are potentially at a tipping point moment. If we can keep the momentum then we could see progress across a range of issues that see long standing inequalities resolved.
It’s worth just thinking about some of the things that have happened over the last year alone. That includes the solidarity shown by actresses at the Golden Globe awards in the face of the sexual harassment allegations that have been seen in recent months; the resignation of a member of UK Government’s Office for students because of the language he had used – including language that diminished women on social media; and the outpouring of support shown following the resignation of Carrie Gracie as the BBC’s China editor due to unequal pay.
These are all very different examples and people will have different views on some of them, but I think they do tell us that there is greater transparency and scrutiny than ever before – not simply about sexist comments or conduct, but about institutional behaviours over board appointments and pay structures – and this can be a powerful agent for change.
And that transparency does and can pay off. In recent months, the publication of information about pay differentials between men and women has rightly provoked significant public concern. It has also given women the information they need to argue for equality, and - if we are honest – to embarrass some businesses into action.
In addition, the public’s willingness to tolerate or accept gender inequality has probably never been lower. Women and men, to their great credit, are speaking out about unacceptable and discriminatory attitudes in society at all levels - and the reputational damage which can result from continuing to promote unequal practices has never been higher.
In my view there are now great risks for any organisation – certainly including businesses, but also of course including political parties and others – if they act too slowly to support diversity and equality.
There are also huge opportunities if they act quicker. If we can seize this moment we can secure significant advances towards gender equality in the years ahead. I think we can achieve that increased pace in the years to come.
2018 will see the centenary of women’s suffrage in the UK. There will be many commemorations of that anniversary throughout the year. But by far the best way of remembering the advances in women’s rights gained by earlier generations, would be to take further concrete steps this year, to secure genuine and lasting gender equality throughout the country.
Just as our generation of women owe a huge debt of gratitude to the suffragettes for the rights we today take for granted, I think our generation of women have a responsibility to win the outstanding battles so the next generations doesn’t have to fight them.
The day I became First Minister I was with my then eight year old niece who was watching for the public gallery at Parliament. I said that I wanted, in whatever small way I could to use the influence I had as First Minister to make sure we are building a world for her and her generation where things like the gender pay gap, and inequality on boards, are battles they don’t have to face as they have already been won. We are in touching distance of doing that, but to achieve that we must continue to make the progress we have made so far.
The Scottish Government is determined to play our part in achieving that. We know that many businesses are too – in fact, the attendance here this evening demonstrates that. You understand – as the Hampton-Alexander Review highlights so well - that more equal representation for women isn’t just the right thing for society as a whole, although it is, it will also improve your businesses and benefit your bottom line, making out country stronger and more fairer as well.
So I look forward to working with all of you in the months and years ahead. If we can make greater equality in the boardroom a reality, this can help the wider progress we need to see.