Emer Higgins (Dublin Mid West, Fine Gael) | Oireachtas source

I move: "That the Bill be now read a Second Time."

I thank colleagues from across the House for their expressions of support for this Bill, and all members of the Cabinet for agreeing this week to support it. I thank the Ministerfor Children, Equality, Disability, Integration and Youth, Deputy O'Gorman, and the Minister of State, Deputy English, for being present.

I thank solicitor and Dublin Mid-West constituent, William Aylmer, for his assistance in drafting this Bill. I am delighted he could be here today along with so many of my campaign team, given that they helped to get me here.

I engaged very closely with the National Women’s Council of Ireland, NWCI, to formulate this Bill. I am delighted to have its support and backing on this important issue. I will begin by explaining the contents of the Bill. The Irish Corporate Governance (Gender Balance) Bill will make provision for the regulation of gender balance on the boards and governing authorities of corporate bodies and related matters. In doing so it will provide for gender quotas to be introduced at boardroom level. It will require all companies as set out in the Bill to have 33% of each gender on their boards within a year of commencement of the Act. It will require them to have 40% within three years of commencement of the legislation. This three-year lead-in period has been included in order to take account of the typical life-cycle of a corporate board. It will mean that once the legislation is enacted companies can begin planning ahead for the next incarnation of their boards with gender balance in mind.

However, it is important to note that boards do not have to wait until this legislation is enacted to start improving gender representation in their organisations. They can do that now. I would love to see companies spurred on by this debate today, starting to address the imbalances around their boardroom tables now and not waiting to be compelled to do so by law. This Bill will compel companies as set out in the Companies Act 2014 to submit an annual report to the Companies Registration Office on the gender balance within their boardrooms. This will enable us to access the data on which executive boards meet or pass the benchmark set for them and where people fall short. The legislation is built on a “comply or explain” model to ensure that where companies do not meet the gender quotas set out, they have the opportunity to explain the shortcoming before any sanctions are applied.

Certain groups will be exempt from the legislation, including unincorporated associations, partnerships, limited liability partnerships and single director companies. It will also not apply to microcompanies as defined in the 2014 Act, or other corporate bodies with an annual turnover of less than €750,000 or which employ fewer than 20 employees, or both.

This Bill is not seeking to punish or burden small businesses. It does not seek to impinge or dampen entrepreneurship. Rather it seeks to hold larger corporations accountable to a standard of representation within their organisations. The 33% and the 40% gender quotas will be mandatory but, as I said, they will be built on a “comply or explain” mechanism. This means that companies that do not meet the gender quotas will have the opportunity to explain why they could not meet them before any action is taken to compel compliance. The law will include a statutory right that will allow any interested party to apply to the High Court for an order to compel compliance where a company’s explanation for non-compliance is deficient. This is an important part of the Bill because it will ensure that the legislation has teeth. We have seen for many years that soft targets around gender representation simply do not bring about the change we need in the time we want to see it. Quotas are a somewhat blunt instrument. I recognise that, and ideally we should not need them, but we do. Quotas are proven to work and when backed by mandatory compliance they are strengthened even further.

All companies can also apply for a certificate of compliance from the Companies Registration Office. It is my ambition that this certificate will serve as a mark of excellence in representation to show that complying is what they do. That will help them attract and retain talent. It will showcase the companies that lead on the issue of gender balance. It will do this in tandem with the gender pay gap legislation. The Bill will clearly highlight the organisations that are leading on gender representation.

I hope that this Bill will pave the way for balanced representation of both men and women in leadership roles in businesses through quotas. Boardroom gender quotas have been successfully implemented in a number of European countries. They are advocated for at EU level and were a recommendation of the Citizens' Assembly on Gender Equality earlier this year.

A recent report by the NWCI sets out the impact they could have in Ireland. Currently, we use soft targets to measure and drive the representation of women in boardrooms and State organisations. That is a welcome start and I commend the work done by bodies such as Balance for Better Business and the 30% Club. However, gender balance in our boardrooms unfortunately is not improving quickly enough. On State boards change without a quote has been painfully slow. Great progress has been made on State boards where women now represent 41% of directors but it took 25 years to meet that target which was introduced in 1993. Only 19 of 39 listed boards in Ireland have met the 2022 target of 30% female representation for the ISEQ 20 and 22% for other listed companies.

ISEQ 20 companies now have an average female representation of 32% at board level. That is welcome progress. However, the boards of other listed companies outside of these have an average of only 23% female representation. In fact, 13% of all Irish companies have no female board member whatsoever. While targets are improving the situation they are not doing enough, quickly enough. The case for legislative gender quotas on boards is made all the more convincing when we look at the international experience. Norway was the first country in the world to impose gender quotas on boards in 2006. In doing so Norway increased its female representation on boards from 5% in 2001 up to 40% in 2008, within just two years of enacting the legislation. Norway is not alone. It is top of a growing list of countries favouring gender quotas as a means of boosting gender balance on corporate boards. Countries such as Belgium, France, Germany, Iceland, India, Israel, Italy, Norway, the United Arab Emirates, Pakistan and Spain have all seen the benefits of quotas. It is time that Ireland follows the example of so many of our European neighbours by introducing gender quotas in our boardrooms.

Due to the severe economic strain suffered by many companies during the pandemic gender equality measures may fall down the agenda of governments and of company boards especially since across the EU women make up only 34% of board members and 9% of chairs. Analysts would say that this would be a mistake and that the crisis represents an opportunity for companies to invest in building more flexible, adaptable and empathetic workforces. The recent Citizens' Assembly on Gender Equality emphasised that actions were required to confront the slow progress on gender equality in both leadership and decision-making. It recommended the enactment of gender quota legislation that requires companies to have at least 40% gender balance on their boards. In keeping with the recommendations of the citizens' assembly this is exactly what my Bill seeks to achieve.

During my discussions on this Bill I had multiple meetings and engagements with organisations and interested parties such as Women Inspire, Women in Business, Women mean Business, the Professional Women’s Network, the 30% Club, ICTU, IBEC, SIPTU, Better Balance for Business and the NWCI. While each of these groups had varying opinions on how to go about achieving gender balance in our corporate boardrooms – some indeed had clashing opinions – they were all united on one thing. They all agree that women need to be better represented in the boardroom.

Gender quotas are shown to broaden the talent pool available to employers. They are shown to ensure boards think outside the box when it comes to replacing board members rather than repeatedly replacing them with people of the exact same profile – replacing men with men. Companies with balanced boardrooms make better decisions. They are shown to perform better financially and that leads to the trickle-down benefits for women in all levels in all companies.

Gender inequality is all around us. It is in many different sectors of work and areas of life. Some people will question why this Bill focuses on the corporate world and tackling representation purely in the boardroom.

There is no one Bill that could be both specific enough and broad enough to take on gender inequality in all professions and in all areas of work, of life and in business but this Bill is a start. The Bill focuses on a substantial chunk of businesses and employers in Ireland and corporate organisations.

I firmly believe that change begins at the top. It is the example and the model set forth by those at decision-making level that influences engagement at the next level. That is why it is so important to start at the boardroom. The global evidence shows that after adoption, quotas have influenced both the number of women on boards and the performance and the outcomes of decision-making bodies and broader public attitudes.

Quotas redistribute power at the top of the labour market and that has a positive trickle-down effect for middle management, for recruitment and for improving financial performance. They can also lead to smaller gender wage gaps, more flexible work options and even better measures to combat sexual harassment.

Balanced boards make better business sense. Including women ensures that full use is made of the range of talent available. More diverse perspectives are incorporated and that leads to greater innovation, higher productivity and better working conditions for everyone.

These findings are evident in the research from consultants, banks and investment research firms such as Deloitte, McKinsey, Catalyst and MCSI. In fact, in 2020 the McKinsey and Company report, Diversity Wins: How inclusion matters, found that companies the boards of which are in the top quartile of gender diversity are 28% more likely to outperform their peers financially. That research further shows that gender diversity improves private equity and venture capital returns. I believe research on the international experience speaks for itself.

Ireland needs gender quotas at a boardroom level. This Bill will create the opportunity for both men and women to be fairly represented at the top table of business. It will ultimately lead to better balance in the boardroom being achieved. Our boardrooms need to be a reflection of our society.

We all have a role to play in breaking down the unconscious biases and the reinforced stereotypes that exist in our world. Let me be clear that this Bill is not about favouring women over men. It is not about giving people opportunities they have not earned or are not qualified for. In fact, it is quite the opposite. I often hear, about this Bill, "Should it not just be the best person for the best job?" I would absolutely agree with that were men and women put on an even footing from the beginning and had men and women equal opportunity to get a place at a boardroom but they do not. Historical barriers, cultural barriers, sometimes educational barriers, and familial barriers, have put women's progress in the workplace far behind that of their male counterparts. Women have fought hard to break down those barriers. We have made significant progress in the past decade but if we do not intervene, men and women will simply never be on an even footing in the workplace.

This Bill is about breaking the cycle of replacing like with like. It is about encouraging organisations to think outside the norm when recruiting to give more women a chance to start putting work in now to ensure we have a better talent pool of board-ready women. I also want to point out that the term "female representation" is an umbrella term. Within that, there is also a need for women of colour, women with disabilities, LGBTQI women, and women for lower socioeconomic backgrounds and other marginalised groups. This Bill solely deals with the overall representation of women in corporate governance but I hope in time we will see it expanded on. It is my hope and ambition that both men and women will have equal opportunity to not only get their foot in the door but to earn a seat at the boardroom table.

I am grateful to the Acting Chairman, Deputy Mattie McGrath, for the opportunity to bring this Bill before the House and I thank him for taking my slot in the Chair.

Once again, I thank Mr. William Aylmer from the Kevin Jacob-Bernard McCormack branch of Fine Gael in Dublin Mid-West, the Bills Office, the Office of Parliamentary Legal Advisers and the Fine Gael Women's Network. I also thank the National Women's Council of Ireland, which collaborated closely with me on this Bill and which has done much for female representation in all areas of society, as well as the cross-party Oireachtas Women's Caucus for indicating cross-party support for this Bill.

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