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Meg Munn MP - Sheffield Heeley's voice in Parliament | Welcome
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Getting the right mix when developing diversity?

Monday, October 3, 2005

At the Labour Party conference Meg gave the following speech at a fringe meeting organised by the Social Market Foundation (SMF) on the 28th September. 


Diversity is a fact of life - indeed I would say a welcome fact of life. It should really be strange, unusual, when we don’t encounter it rather than the reverse. But in our society it’s often the evidence of diversity that is considered odd. I was at a formal dinner in Sheffield and the person sitting next to me enquired what I did. I explained I was one of the local MPs and he replied that I didn’t look like a Member of Parliament - “What female?” I asked.


Having a believing in equality and social justice for all should dictate greater diversity - in all areas of life not just the workplace. Here I could mention Trevor’s well publicised speech last week in Manchester. What immediately struck me was his point that the people we know socialise with, are people who look like, have the same colour as, ourselves. The perhaps more worrying part for the future - that the young are more likely to be that way.


But back to diversity in the workplace. Whether it’s the public sector, providing services, or the private sector, selling goods and services, it makes sense to have a diverse workforce. There is a very good business case for it. However we are still a long way from achieving this - whether it is gender, race or sexual orientation.


A few facts - not too many at this time of the morning!!


Starting with education - teacher assessments and test results show girls outperform boys (but not too significantly!) in all subject areas at the three key stages of their compulsory education. There’s the exception of Mathematics, where the results are relatively equal. So, in broad terms, girls and boys leave school at about the same level.


Women make up 52% of the UK population and 46% of those active in the labour market. But women constitute only 26% of the self-employed, and only 15% of UK businesses are majority women owned. We know that if we had the same rate of female owned start-ups as in the USA we would have 750,000 more businesses. This would have a major impact on productivity, growth and prosperity.


According to research by QinetiQ, three quarters of the 290,000 UK women of working age with degrees in science, engineering and technology fail to take up careers in these fields. That is despite having had related work experience. This has been calculated as a loss to the UK economy of £70 billion.


A poll by the Institute of Physics showed that seven out of 10 physicists who took a career break did so to have children, the vast majority of them women. But while 34% left jobs in industry to start families, only 14% returned to the same posts - and 55% of those who did go back to the same employer went part time.


These are significant losses in terms of experience and skills to our economy. But to add insult to injury for women who do remain in science, engineering and technology men's hourly earnings increase with age, whereas women's hourly earnings remain the same or decrease with age.


The glass ceiling is still firmly in place. The 2004 Female FTSE Index released on 7 December 2004, told us that:


  • Women make up 9.7% of all directorships in the FTSE 100. This is up from 8.6% in 2003;


  • the number of boards with multiple women directors has risen from 22 in 2003 to 28 in 2004; and


  • 69 companies in the top 100 now have women directors meaning that 31 don’t.


Of course its not just women who are underrepresented in this area but also people from minority ethnic groups. More diversity in the boardroom would mean that companies better represent the society in which they operate, which should lead to improved competitiveness and productivity. Diversity on boards provides better corporate governance through the sharing of a broader and different range of experiences and opinions.


For example, results for Return on Equity (ROE) over the last 3 years indicate that the 69 companies with women directors have an average ROE of 13.8 compared to ROE of 9.9 for the 31 companies with all-male boards. So companies with women board members have a higher performance, they are doing something right for their customers.


Age is also a significant issue - older people find it harder to gain employment. The Cabinet Office estimates that low employment among older people reduces GDP by around £16 billion per annum. Often assumptions are made about older people, such as the time someone will work before they retire. In fact, newly recruited older workers may well stay considerably longer than a younger worker looking to move jobs in developing a career.


Older workers often have a range of skills and experiences that can be used if only companies and services recognise them. B&Q have started specifically to recruit older staff members, recognising that they often have hand-on knowledge about the products that customers are looking to buy.


What Government is doing

Government is tackling the issues of diversity in a range of ways. On gender the Women & Work Commission, due to report later this year, will cover issues such as occupational segregation as a key component of the pay gap. We’re investing in the ‘UK Resource Centre for Science, Engineering and Technology’ to encourage more women into these sectors, help keep women with these qualifications develop careers and to work with employers to get women into traditional male areas of employment such as construction.


The Equality Bill which is currently before the House of Lords will introduce a gender equality duty for public authorities. It will be similar to the existing duty to promote race equality and the duty on disability.  These duties place clear responsibilities on public authorities to take action themselves, rather than relying on individuals challenging discrimination reactively. So the gender duty will require public authorities to ensure that their policies and practices address the different needs of women and men.


A number of initiatives are in place to support people from minority ethnic communities develop businesses including specific help for ethnic minority women. The business case for diversity is promoted in Job Centres through Specialist Employment Advisors who offer practical advice to employers on race equality issues.


A programme of events has been run to promote diversity in the board room. The Government commissioned the Higgs and Tyson report, and the publication of Better Boards. We have held Roundtables to encourage change, commissioned the Cranfield Report on ethnic diversity in the FTSE 100 and through support of the Female FTSE Index. 


Building Better Boards develops the recommendations of Derek Higgs and Laura Tyson for more diverse and effective boardrooms.  The new guide:


  • sets out the business case for effective diversity and better practices in the boardroom;


  • cites the benefits for companies, with evidence from some of Britain’s best-known businesses and names; and


  • outlines Government and business-led initiatives to develop the talent pool of women.


The Government has a clear role to play in encouraging good governance, but the main response has to come from directors and investors themselves. 


In relation to age the Government is committed to outlawing unfair age discrimination in employment & training. Enlightened employers see the clear benefits of abandoning age-based practices - in recruitment and promotion, for example - in favour of decisions based on the skills and competences they need.


Age legislation will improve the employment rights of almost 6.8 million people currently aged 50-64 and in work, and could help hundreds of thousands of people aged 50-64 who are out of work and currently seeking a job.


New anti-discrimination laws that came into force in December 2003 tackle discrimination in employment and training on the grounds of sexual orientation and religion. These regulations offer protection against prejudice for the first time ever ? a major step forward. 


Should we be pushing this agenda further? Yes we should, and yes we will. We are helped by companies who see that it helps them be better in business. It really doesn’t matter in the short term whether they adopt positive policies through belief, or because skills shortages force them to investigate areas they would not normally. What matters is that they do. What matters is that by so doing they move toward a society that has a more diverse workforce - with no doubt all the problems that will bring!!

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