It does not take much for the Business Secretary Vince Cable to rediscover the politically correct instincts that he has sometimes had to bury while serving within a Conservative-led coalition.
Presenting the latest progress report on the numbers of women on the boards of quoted companies, he found time to tick business off for not doing enough to increase those numbers, and dropped some menacing hints about mandatory quotas if we did not meet the European Union target soon.
And yet is that really necessary? No one has anything against more women joining company boards. And, in fairness, the average British company director is still white, male and middle class. But there is not a huge amount to be gained by making them white, female and middle-class, which is all the quotas usually achieve.
Dig under the surface, and something far more interesting is going on – and which has eluded control and quota freaks like Cable. Women are making excellent progress in the workplace, and in many ways are now doing better than men. They don’t need any more help.
The campaign to get more women onto boards has been running for many years now. This week, Cable unveiled a list of the FTSE 100 companies making the most progress. Old Mutual topped the list for the most improved firm, with a 38.5pc increase in women on its board, although admittedly it started out on zero, which didn’t make it too hard to get better. GlaxoSmithKline and HSBC also collected some brownie points, with a third of their boards now made up of women.
But that might not be enough for Cable, or more ominously for the EU. “Seeing the enormous progress made by these top FTSE 100 companies demonstrates that the UK’s voluntary, business-led approach is working,” he said. “Our target of 25pc women on boards by 2015 is in reach. However, the threat of EU mandatory targets remains a reality if we do not meet it.”
Unfortunately, that threat is a real one. Much of Europe now has mandatory quotas. At the end of last year, Germany, where Angela Merkel’s coalition is as keen on regulating its own companies as it is on imposing deregulation on the rest of the continent, passed a law forcing companies to make 30pc of their supervisory boards female. Norway, Italy and the Netherlands already have similar rules in place. That may well increase over time. Back in 2012, the EU outlined plans for companies to target 40pc female board membership by 2020. Pretty soon, the aim may well be 50pc, with punishments for companies that don’t comply.
But in fact, there is very little evidence that we need to legislate at all. There are three big problems with the drive to set quotas. The first, and most obvious, is that women are already making lots of progress in winning board seats. The numbers, as Cable pointed out, are already up substantially. Overall, women now account for 20pc of FTSE board jobs, and 15pc of FTSE 250 directorships, up from 17pc and 13pc respectively a year earlier. In part that reflects prodding from government. But it also reflects the fact that it takes a lot of experience, and usually a lengthy career, to get onto a company board – and four decades on from when women first started having the same kind of opportunities as men, many are now reaching the stage where they are qualified to join the board.
The second problem is tokenism. Norway was one of the pioneers of mandatory targets for women on company boards. But after they were introduced, rather than creating more egalitarian, female-friendly workplaces, which was what many of the campaigners were hoping for, it just created what quickly came to be known as “golden skirts” – that is, a group of well-connected women who shuffled elegantly from one well-paid directorship to the next. What happens is this. Once the target is set, a small clique of women emerges who keep getting appointed to one board after another. The head-hunters keep calling them, because they know they are a safe pair of hands, will say all the right things and won’t rock the boat. It’s great for the women within the charmed circle, and of course the head-hunters and the diversity consultants make a packet. But it is very hard to see that it does much good for anyone else.
The final, and most important issue, is that it does not matter very much who is on a company board. Most women don’t ever get that far in their careers, and neither of course do most men. What actually matters is how well the broad mass of people are doing. And on those measures, all the evidence suggests that women are doing very well in the workplace already. Well-educated, professional women – that is the type who are likely to be asked to join the board of Vodafone – are doing best of all.
Take education, for example. Women are now better educated than men, and make up a disproportionately large percentage of graduates. The latest figures show that 55pc of undergraduates are female compared with 45pc who are male, and that gap is widening all the time. Among younger workers, women are more likely to have a job, and it is often better paid as well. Although men still on average earn more than women do, and there are certainly more men right at the very top of the scale, if you take the 22-29 age group, women now earn more than men do on average, according to the Office for National Statistics.
The American statistics show that in well-paid professions, such as law and medicine, women have now reached parity with men among new entrants, and in areas such as pharmacy and veterinary training they outnumber them. If you extrapolate out, what is happening to the 20-somethings now is probably a pretty good guide to what will be happening to the 40-somethings in a couple of decades’ time. And those statistics tell us that women will, by the 2020s and 2030s, be well ahead of men in the workplace, mainly because of better education.
So why are we so keen to lavishly reward a small group of well-connected women to try to solve a problem that does not even exist? After all, just as no one would argue that women are worse directors than men, it is hard to make the case that they are necessarily better.
In reality, the days of women being routinely discriminated against and underpaid belong to the past. Women are actually doing really well at work, and arguably better than men. Upper-middle-class professional women are doing the best of all. We don’t need any more laws or quotas from Vince Cable to help them do even better.