Roderic O'Gorman (Dublin West, Green Party) | Oireachtas source

I thank Deputy Higgins for bringing before the Dáil this Private Member's Bill to allow us to debate the important issue of gender balance in the leadership of Irish business and its contribution to good governance on the boards and governing councils of corporate bodies. I acknowledge the work undertaken by the Deputy in conjunction with the National Women's Council and the other individuals with whom the Deputy has worked on the development of this legislation. I welcome the opportunity it gives us to focus on an issue that is a policy priority for the Government.

As the Minister with responsibility for equality, I am ambitious to achieve substantive and sustainable gender equality on Irish boards and for Ireland's employees. I want to make clear that the Government is supportive of the principle behind this Bill. Without a doubt, the Government is supportive of the need to accelerate change in this area. We would like to work with the House to ascertain how best to make further progress.

Our policy approach, set out in the national strategy for women and girls, has focused on changing the culture of business. Significant success has been achieved through associated voluntary targets as set out in, and monitored by the independent, business-led, Balance for Better Business review group, which the Minister of State at the Department of Enterprise, Trade and Employment, Deputy English, will speak of in more detail. The gender imbalance in favour of men in senior business leadership and high-paid employment is one of the factors contributing to the gender pay gap in Ireland, which stood at 11.3% in 2018.

Through the Gender Pay Gap Information Act 2021, the Government has introduced a statutory obligation on employers to calculate and report on their gender pay gaps and that has come into operation for large organisations with over 250 employees from this year. I anticipate that gender pay gap reporting will encourage employers to look more closely at the gender balance throughout their organisations, in particular, to look at the example they set in their leadership and top management.

It will also provide transparency for employees on which companies are doing the most to address their gender pay gap, while allowing those organisations to showcase their good practice on the issue of gender balance. Gender pay gap reporting requirements will also be rolled out over the next number of years to organisations with over 150 employees and then to organisations with over 50 employees, eventually encompassing around two thirds of employees in the State.

Let me now turn to the Private Member's Bill itself. This proposed Bill is focused on amending the Companies Act 2014 to achieve gender balance on the boards of companies, corporations, undertakings, charities and bodies. It proposes a substantial shift in approach to the issue of achieving gender balance on corporate boards in terms of scope, obligations and enforcement. For example, the Bill requires that companies within scope achieve a minimum mandatory quota of 33% within the first year of commencement of the Bill, rising to 40% within three years of commencement. While of course our ambition should not be modest in this objective, it is worth flagging that this target could prove difficult to achieve in this timeframe, particularly for some of the smaller family businesses that would have to source directors to join the board or else face heavy sanctions by being required to do so by court order.

In terms of scope, the Bill would apply both to private and to public companies, from small to large, and that have at least two directors. The Bill also goes beyond the Companies Act and impacts on many different types of boards. For example, it includes entities such as charitable companies that are subject to oversight by the Charities Regulator. The Bill would also introduce significant compliance obligations which give rise to oversight and enforcement considerations. I again flag the potential impact of that, particularly on small companies. I am not saying that in a negative way; we merely need to be cognisant of that in analysing the Deputy's proposals. There are some further matters to be considered. Central to any consideration of potential amendments to Irish law are existing EU laws and legislative developments on gender balance applicable across member states.

Political agreement was reached last month on the final text of a new EU directive to improve the gender balance at board level in the largest EU publicly listed companies. This proposal has been in existence since 2012 when the Commission published a proposal aimed at increasing the representation of women on corporate boards in the EU. While the European Parliament adopted its position in 2013, the Council could not reach an agreement on the issue.

I think we all will welcome that progress was achieved under the French Presidency and political agreement has now been reached.

The directive is expected to enter into force later this year, with a transposition period of two years. The directive will require large EU listed companies to publish information on the gender balance on their boards. Targets are set for the boards of these listed companies, of 40% of each gender for the non-executive directors or 33% of all directors including both executive and non-executive directors. Member states will be required to ensure that listed companies that do not meet these targets adjust their selection process for board positions. The directive will also provide that, where a member state has existing domestic initiatives meeting certain criteria, they may suspend the application of the targets.

I note that the primary objectives of Deputy Higgins's Bill are broadly aligned with the proposals under this forthcoming EU directive, and I commend her on seeking to proactively align our domestic legislation with what is coming from the European Union. Examination of existing national legislation must take place first, as part of the transposition of the directive domestically. It is important that no legislation is introduced which would run contrary to or interfere with the implementation of the directive. It is important also that we have a debate and flesh out the best approach in this area, which is why the Government is not opposing the Bill today, so as to allow the start of the debate to take place. As a next step, the Government will continue working to examine the options for transposition of the EU directive. The improvement in the gender balance on listed companies achieved to date under the Balance for Better Business will be an important consideration in the approach Ireland takes to implementing the directive.

The Government supports the objective of this proposed Bill to accelerate our efforts to strive for better balance in economic decision-making. The new EU directive plays an important role in achieving this objective. I know Deputy Higgins understands that we are interacting with the new piece of legislation. My understanding is that she has agreed that we will address the directive and then we will look to see if there are any elements on which we need to proceed in terms of what is set out in her Bill. I very much welcome her adoption of that approach. I again thank Deputy Higgins for bringing forward this Bill and for giving us the opportunity to have this important debate. I look forward to working with her and others to advance the broad objectives set out in her Bill.

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