knowledge | 17 September 2020 |
New Requirement for Gender Balance, Diversity and Inclusion on State Boards
A recent amendment to the Code of Practice for the Governance of State Bodies aims to enhance gender balance, diversity and inclusion in the membership of State boards.
What has happened?
The existing State Code (available here) has been supplemented by a new Annex on “Gender Balance, Diversity and Inclusion” (available here). This constitutes the first major change to the current State Code since its launch in 2016 and aims to promote the long-standing public policy objective of achieving 40% representation of women and of men on State Boards.
The Annex appears to take effect immediately and so to be relevant for reporting by State boards on their current financial year and for board self-evaluations that are being planned.
Why has the Annex been introduced?
The current State Code already recognised and supported the move towards gender balance on public boards. However, in 2019 the Government established an Inter-Departmental Group (the “IDG”) to review developments in this area. The IDG report (available here) noted significant progress in recent years in reaching the target of a minimum of 40% representation from each gender on every State Board, but found that greater effort was required.
The Annex recites the key benefits of a diverse and inclusive board membership, while acknowledging that diversity at board level remains a challenge for State bodies. Possible benefits of the measures from a Board perspective are:
- access to a broader range of experiences, perspectives and skillsets, thereby reducing the likelihood of ‘group think’ and allowing a more gender-balanced culture to evolve; and
- academic literature has supported the notion that diversification in expertise can also result in positive changes to the behaviour of board members and place them in a stronger position to work more effectively as a team.
The Annex implements the IDG’s recommendations in order to address the shortfall between current levels of representation and the 40% target.
The Annex states (page 5):
- “It is timely for State bodies to take ownership of this issue and to lead the way in making progress at Board and senior executive levels to implement measures aimed at accelerating progress towards the 40% representation of women and of men on all State Boards…
- The key metrics of performance for State bodies are not only economic, but also include culture, diversity and inclusiveness together with the well-being of those employed, fostering greater engagement among staff and stakeholders and leading in turn to better outcomes for citizens and communities…”
What does this mean for State Bodies?
The Annex sets out measures that are designed to enhance diversity on State boards and gives effect to many of the IDG’s recommendations. These include:
- new reporting measures that are designed to provide greater transparency by State boards which have not reached an appropriate level of gender balance;
- the requirement for State bodies that have not reached the 40% target to outline the measures that they will take to achieve this target;
- a stipulation that, before any minister decides on an appointment to a State board, she or he must be made aware of the existing gender composition of the relevant State board;
- the obligation of a State board to report annually on its progress in promoting equality, diversity and inclusion within the organisation, and to have an external evaluation (proportionate to the size of the relevant State board) of its progress in this regard at least every three years;
- the inclusion in a State board’s annual self-assessment review of an analysis of its performance regarding gender equality and diversity; and
- a requirement that the service-length of members of State boards should be varied to enable boards to achieve the gender balance target sooner. Instead of the flat five-year term as in the 2016 Code, now (where the legislation permits) the term must be varied to between three and five years, as best suits attainment of gender-balance. Further, the relevant minister now must also approve State board re-appointments where this would bring a board member’s term of office above eight years, rather than ten years prior to the Annex.
The Annex includes a model statement for State Boards’ annual reports, a model advisory statement for submissions to ministers in respect of appointments and re-appointments to State boards and relevant amendments to the Self-Assessment Evaluation Questionnaire.
Also contributed by Ailbhe Marsh
This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.