Vince Cable approached the commission in March this year to ask for its guidance on the legality of female-only recruitment shortlists, which he hoped could help UK FTSE 350 companies reach their target of 25% representation of women on boards.
The commission’s guidance, published today, has ruled that using women-only shortlists to increase gender representation is “unlawful under equality law”.
When there is an absolute tie in terms of standards then it is right to pick the more diverse candidate
The Department of Business, Innovation and Skills “very much welcomed”, the commission's advice on the issue, a spokesperson said.
Vince Cable said in a statement, “The headhunting industry have been looking for reassurances on the legality of all-women shortlists.
“That’s why I welcome the EHRC’s guidance, which has clarified this issue and highlighted what lawful measures can be taken to help deliver greater boardroom diversity.”
The commission today launched a nation-wide inquiry into the recruitment and selection practices of the FTSE 350.
Gaenor Bagley, head of people at PwC which, as a firm, has been outspoken on the issue of female representation on boards, said that “at this stage” positive discrimination in this way is inappropriate.
Bagley advocates a system of using targets rather than quotas to drive “affirmative action”. This, she says, can create an environment that offers enough support for female candidates.
“The target helps you think about how to help people get through on merit.”
Affirmative action, such as mentoring and sponsorship programmes or allowing for maternity leave is identified by the EHRC as an exception to the rules against positive discrimination.
In the case of two similar candidates, said Bagley, where one is from a minority and there is a strong business case for better representation, then it is often appropriate for the minority candidate to be favoured.
“When there is an absolute tie in terms of standards then it is right to pick the more diverse candidate.”
Cable said, “While more needs to be done to ensure women are properly represented in the boardroom, there are now no all-male boards and women account for over 22% of FTSE100 board positions.
“This goes to show businesses are now seriously addressing this issue and the voluntary approach is working.”