Elizabeth Young CA CMIIA is a chartered accountant and chartered internal auditor. She works predominantly with public sector bodies advising them on governance, risk management and internal control. She is a member of ICAS Audit and Assurance Panel and the Institute of Internal Audit’s Scotland Committee. In 2016, she was named one of the ‘Top 35 CA’s Under 35’ by ICAS and in 2015, she was named one of the Top 25 Rising Star Professional Advisors by Charity Finance Magazine.
The Scottish Government's new proposals to increase women's representation on public boards are currently out for consultation.
The "Gender Representation on Public Boards (Scotland) Bill" takes the current, voluntary measures a stage further by requiring public boards to set a ‘gender representation objective’ to have 50% of non-executive members who are women. Non-executive directors (“NEDs”) are individuals appointed to the boards of public bodies with responsibility for ensuring the effective governance and financial management of that public body. The Bill also includes some specific requirements for new board appointments, namely that the following process should be adhered to:
• Candidates should be assessed to determine whether any particular candidate is best qualified.
• Where no particular candidate is considered best qualified, preference should be given to candidates who are women, amongst equally qualified candidates, where that will help the Board achieve its 'gender representation objective'.
• Where a person who is not a women is appointed, this must be justified on the basis of a characteristic or situation particular to that candidate.
Public bodies will also be required to encourage applications by women, take whatever steps are necessary to achieve the objective and to report on the operation of the Act (there is currently no proposal surrounding the form that reporting would take or whether penalties would be applied for non-compliance - this is subject to further consultation).
The Gender Representation Bill has been introduced in the context of the SNP Government's manifesto commitment to improving gender representation in public life and on the back of significant progress in key areas. Leading by example, the First Minister appointed a gender balanced cabinet and the voluntary measures enacted for public boards saw the overall percentage of women rise to an all-time historic high of 42% in 2015. However with 52% of the population comprised of women, a significant gap remains before we can truly claim equality of opportunity and representation. Gender balance also remains a key topic for politicians within the UK Government; the introduction of the Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 will see the introduction of new Gender Pay Gap Reporting. The Act requires employers with 250 or more employees to publish statutory calculations every year showing how large the pay gap is between their male and female employees. In the public sector, public bodies already have reporting responsibilities on equality which has complicated the legislative landscape, however the Scottish Government has committed to requiring all public authorities with more than 20 employees to publish their pay gap every two years and an equal pay statement every four years. The combination of a concerted drive towards gender balance in the leadership of public bodies and reporting on gender balance throughout their workforces should help to retain a focus in this area until significant progress is made.
The additional measures included in the Bill may also help to tackle some of the more endemic problems in achieving better Board diversity. For example, assuming that women are equally as qualified as men to act as NEDs, the reason that fewer are appointed must be down to either a lower number of applications from women or an unconscious predisposition to see men as a 'better fit'. Therefore, the requirement for public bodies to actively encourage applications from women will require a change in public perception about what skills and characteristics a 'good' NED needs to have. This means a challenge for appointing bodies in stepping away from a traditional stereotype of a good NED, to critically examining the skills that are needed for an effective Board member as the different ways in which candidates may have acquired them. It also means potential applicants being encouraged to think differently about how their skills and experience may make them an effective NED. If we can crack that particular nut, it should also open the door to achieving more representative boards in other respects - such as age, race, disability, sexuality... There is a wealth of research to support the view that diverse boards make better decisions and so having diverse boards on public bodies should directly benefit us all.
Women for Independence is encouraging all of its members with an interest in this area to engage with the consultation and make their views known. Do you serve on a public board? Have you ever applied to do so? Do you want to do so? Do you have an interest in ensuring the boards of public bodies represent the public they serve? If so...the consultation is available here -
The consultation closes on Friday 31 August.
Responses should address all or any of the following points in turn—
• the impact, if any, on people applying for an appointment as a non-executive member of a public board;
• the impact, if any, for those public authorities responsible for encouraging and recruiting women to public boards as non-executive members;
• the Bill requires public boards to report on the operation of the Act, although Scottish Ministers can regulate how this should happen; what should any reporting requirements cover and why;
• whether there should be penalties for non-compliance with the Bill and what these should be and why;
So please make your views known and think of your own potential to become a NED.