In a symbolic move, the Scottish Government recently published the draft Gender Representation on Public Boards Bill aimed at achieving 50% female representation on public boards. Despite the press reporting that public bodies will be “forced” to have equal numbers of men and women on boards, there are no sanctions in this Bill for non-compliance. However the Commissioner for Ethical Standards in Public Life has oversight for the boardroom appointment process for specified public bodies in Scotland and monitors the diversity of board appointments in their annual report. The Bill makes it clear that the 50% figure is an “objective” rather than using wording associated with a compulsory or binding quota. This is a form of lawful positive action, as opposed to positive discrimination which by and large remains unlawful in the UK.

Which bodies are affected?

The Bill affects certain public boards in Scotland and will apply to non-executive board positions. Employees are therefore excluded. The affected public bodies are listed in the Schedule to the Bill and include colleges and universities in Scotland. Private sector companies and voluntary organisations are excluded.

How will this work?

Boards are given the objective of obtaining a 50% gender split. There is no timescale within the Bill stating when this objective must be met, although given the 50/50 by 2020 initiative this will be the key milestone which will be on every organisation’s agenda.

Duty when appointing

The gender representation objective is triggered when a board vacancy becomes available. Where there is more than one candidate for the position, and where there are applications from both genders then the “appointing person” (which in the majority of cases will be the Scottish Ministers) must act in accordance with the gender representation objective. The legislation is progressive by not only referring to males or females but extending to the transgender community, by referring to candidates who identify as male or female.

Two forms of positive action

In order to obtain the 50% objective the Bill contains two different types of positive action. In this respect, the Bill adopts a dual approach to positive action in a similar manner to the Equality Act 2010 by including a measure which encourages applications from the underrepresented sex, and also a recruitment “tiebreaker” provision which enables preferential treatment where candidates are equally qualified.

The encouragement of applications

The duty to encourage applications applies not only to the “appointing body” but also to the public authority itself. In fact the Scottish Government’s current Guide for Board Members in Scotland, “On Board” stipulates that “Public bodies are expected to take positive action to support and enable greater diversity of Ministerial appointments…” and then lists a variety of general measures. In addition the Scottish Funding Council’s Code of Good HE Governance contains a number of references to diversity and the need for balance among members of an institution’s governing body.

The tiebreaker provision in the Bill

The tiebreaker provision in this Bill has been drafted in a much more user friendly manner than s.159 of the Equality Act which is seldom used by employers for fear of being challenged over whether candidates are as qualified as each other.

The Bill proposes that where there is an underrepresentation of women on a board, then during the appointment process for the new board member, there will be a duty on the “appointing person” to effectively carry out a 2 stage process

• Determine whether there is a candidate who is the best qualified to do the role • If no particular candidate is best qualified for the appointment, the appointing person must identify candidates it considers are equally qualified and, unless exceptional circumstances exist, it must then apply the positive action provisions by giving preference to the underrepresented sex.

Approaching the appointment process using this 2 stage process seems a more logical process than assessing under the Equality Act whether each individual is “as qualified” as the other. It is also worth remembering that the Government is required to take this approach under European law which prohibits any form of positive action in recruitment which results in an automatic preference being awarded to one candidate on account of that candidate’s gender. Boards are unable to use women-only shortlisting, given the risk of a successful claim by a man who has been treated less favourably by not being shortlisted for a role.

Comment

Consultation closes on 17 March and views are sought on a variety of issues relating to the Bill. An implementation date is not yet known. A copy of the consultation document can be found here.

The policy behind this legislation stretches back to 2008 when the Scottish Government first introduced their Diversity Delivers program to improve diversity in board appointments. Since then a significant amount of work has taken place to open up board appointments and reach a wider pool of candidates through sites like http://www.appointed-for-scotland.org/.

This Bill and the 50% objective should not therefore be seen in isolation. More recently the Scottish Government signed up to the (voluntary) 50/50 by 2020 initiative to increase female board members not only in public bodies, but also in private companies and voluntary sector organisations. Currently women account for 42% of public board members in Scotland. While this is not far off the 50% mark, the fact that the Scottish Government has chosen to legislate in this area sets them apart from Westminster where voluntary initiatives such as the recent Hampton and Alexander report raised the target to 33% of women on FTSE 350 boards by 2020.

Realistically many organisations will be far more comfortable relying on the encouragement provisions within the Bill rather than relying on the tiebreaker provision to achieve their objective. Those wishing to rely on the tiebreaker provision will undoubtedly seek legal advice to pre-empt any potential challenge. As anyone who works in this area knows, setting objectives can often be the easy part. The difficult aspect is ensuring that (i) there is a sufficient pipeline of female candidates of the calibre necessary to fulfil non-executive roles and (ii) there is no perception that candidates are appointed because of gender and not ability which may not be welcomed by female board members. It is therefore helpful that the broader policy work within the 50/50 by 2020 initiative will assist in this area.

It will also be interesting to see whether this tiebreaker provision marks a change in approach, and indeed the extent to which it is actually used. It is unlikely that we will ever be told the extent to which it is invoked, since few boards will disclose that they have used the provision, and many female boards members appointed in this way are unlikely to want that fact disclosed. Yet in this era of increased transparency with the new private sector gender pay regime, and a greater focus on diversity the general direction of travel is that more and more organisations will look at how far they can use positive action measures to improve female participation at senior levels.