18 September 2018

  |  CBI Press Team

Speech

Women: Work and power

Carolyn Fairbairn celebrates 100 years of progress for women, and calls for legal changes to protect women from harassment at work

Women: Work and power

Introduction

Thank you very much. One hundred years ago, women won the vote in the UK, and this country earned the right to call itself a democracy. It was a great stride for political equality.

But a century later, I think many people are realising something: that politics is only part of the story.

Because society is not just a product of its politics, but also of economics. Female emancipation isn’t won only at the ballot box, but in the boardroom, in factories, offices and studios, and through work of every kind.

Through work we shape our world. Through work, women’s ideas are turned into things we value - products and services that benefit everyone. And through work, women earn a wage that gives us economic power, as much as the ballot box gives us political power.

But, actually, I want to go further; not just to set out the theory of why female equality in work matters, but to suggest some practical ideas for getting there.

First, though, I want to make something clear. The real argument isn’t that women need business. The more powerful argument is the opposite one – that business needs women.

Earlier this year, McKinsey conducted a landmark study. It put some numbers behind what we all know to be true; that diverse companies are better companies.

For instance, companies at the top of the leader board for gender diversity are 21% more likely to outperform on profitability. Increasing female employment to the levels of men is worth 35% of GDP.

Now, I began my working life in economics. I’ve spent the rest so far in business. They’re fields in which entire careers are spent chasing small gains, where 2% or 3% profit is the difference between a business thriving or going under. So, no business can afford to miss a chance to be 21% more likely to outperform on profitability, and our country can’t afford to ignore diversity either.

So if you take those two arguments, that women have a huge amount to gain from business, and business has a huge amount to gain from women, the intellectual case is clear.

But winning the intellectual case isn’t enough. We also need to change reality. And that’s harder. Visit the boardrooms of the biggest 350 companies on the London Stock Exchange, and you’ll find men outnumbering women 20 to 1.

You’ll meet only 15 female CEOs - too few to fill the front row of this room.

Now, despite those particular statistics, business overall is making progress. This year, 75% of businesses overall have at least one woman on their senior management team. But we all – business included – need things to go much faster.

So today I want to address two existing barriers to women. They’re not the only barriers. But they are perhaps the most damaging to women’s prospects.

They’re pay and progression on the one hand. And on the other – the spectre of sexual harassment.

introduction

Pay and progression

Let me start with pay. The gender pay gap is not new. In the same year that women got the vote, women were also protesting for equal pay.

And as recently as the 1970s, a man and a woman performing the same job could still legally be paid a different wage.

We’ve come a long way since then. Today, women in the UK are paid more than ever before. But there’s still a long way to go. We know that, because this year, for the first time, employers are publishing figures on the pay gap. And that’s a good thing, because the problem is now being measured, and what is measured can be changed.

So we now know that the average man is paid more than the average woman – if there are such things – in 3 out of every 4 companies. In the vast majority of cases, this is not women being paid less for the same job. That’s illegal. In most cases, it’s about too few women in senior roles. So, pay and progression are connected - and that’s why we need more women in management.

But let me get practical. And I’ll say right away that there isn’t a one-size-fits all solution. Every firm is different; with its own challenges and opportunities. But what every firm does need, is a plan, accounting for those differing challenges and opportunities.

Leaders in every business need to use gender-pay data to hold a mirror up to their companies, to identify steps to improve diversity, and then set targets to meet them.

Diageo, the drinks company, is a great example. They’ve got a target of 50% of their graduate hires being women. They’ve banned all-male shortlists for jobs. They ensure interview panels are diverse. They advertise roles on flexible job sites.

And it’s working. Diageo has one of the highest proportions of women at the most senior levels in the FTSE 100. And in the rankings for the most diverse publicly traded companies, Diageo is ranked 5th in the world.

But let me make one final comment on female representation in business. It’s not good enough for a company to simply have a token woman on the board as a non-executive director or chair. Yes, these are important roles. I’ve done them myself. They approve strategy, challenge decisions, and manage risk.

They are important part-time roles. But non-executives are not the ones running organisations on an everyday basis. They are not the sleeves-rolled-up leaders.

Those people are the CEOs, the CFOs, the divisional directors. And we do need to see more women doing these jobs, as managing directors and executive directors.

And it won’t happen without our existing leaders helping make it happen. CBI members hear this from me a great deal – and many, like Diageo, are doing something about it.

pay

Sexual harassment

But let me move on to a particularly challenging issue: sexual harassment in the workplace. It’s a deplorable fact: women do get sexually harassed at work. So do some men. It happens not in every firm, but in some.

It’s not a business-only problem. In the past year we’ve heard about it in Hollywood and Westminster. But in January, it hit the headlines following a particular business dinner - the Presidents Club - where young women were harassed throughout the evening by male guests, having been required to sign non-disclosure agreement to secure their silence.

Wherever harassment occurs, it is an outrage and a crime, and the clear majority of business leaders agree. Most men in business are as angry as most women. But the overwhelming presence of men at the top of corporate life makes this kind of behaviour just too possible.

So yes, improving women’s pay and progress will help. But we also need change specifically to deal with this problem.

And there’s a huge amount I could say, about why all businesses should have a sexual harassment whistleblowing policy, about non-disclosure agreements, and why we need a code of practice covering their use.

But this morning I want to get specific, and call on the government to make a change in the law.

What made the Presidents Club scandal so pernicious was that the women affected were most at risk from harassment not from the company which hired them, but from third parties - the guests.

Now, the vast majority of employers believe they have a duty to protect staff from harassment by outsiders. But not all businesses fully understand those responsibilities. And many workers aren’t sure if they’re protected, or how to enforce their rights.

It wasn’t always so unclear a picture. Until 2012, Section of 40 of the Equalities Act made it clear that employers could be held accountable for third-party harassment. Then in 2012, Section 40 was repealed.

There’s a problem here. Because in the mind of some in the press, and perhaps those in government, those most against reinstating Section 40 are the business community. And actually, that’s a mistaken impression. The CBI has called for Section 40 to be reinstated, and we have told Parliament precisely that.

But if we’re not being heard, and if the government isn’t taking action, it’s our responsibility to speak louder.

So let me be clear. The CBI is the country’s biggest business organisation. We speak for 190,000 firms, of all sizes, in all sectors, and in all parts of the country.

And today we call on the government to reinstate Section 40 of the Equalities Act 2010.

To put beyond doubt that businesses are responsible and can be held accountable by their employees for harassment not only within their firms but also from third parties.

This change in the law won’t prevent all cases of harassment. But if it prevents some, then it’s worth it. And what it will do, is send a message – that business is on the side of women.

That we, together, stand against anyone who thinks that women in work can be harassed. And we are making this clear to the media too, so no one is left in any doubt where we stand.

harassment

Conclusion

But let me say a few final words. In so many ways, 2018 is a great time to be a woman in work. Probably the best time yet.

Gender pay-gap reporting is giving us the evidence we need to make the case. We’re seeing progress on pay, getting women into senior roles, sexual harassment is being exposed and confronted.

But we need to go further, and faster. Every firm must have a plan for increasing female representation and pay at work.

Every firm must take a stand against sexual harassment, no matter its source.

And the government must listen to the calls we’ve made today, so that the best time for women in history can lead to even better times in the future.

Thank you.

conclusion

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