Addressing Gender Inequality through Corporate Governance (CBR project)

Overview

Background

There is an increasingly important link between corporate governance, social policy, and issues of economic competitiveness. Attention has been drawn, in particular, to new mechanisms that are intended to combine the advantages of competitiveness with the demands of social justice under the auspices of new practices of corporate governance, particularly corporate social responsibility. These mechanisms were promoted in the Kingsmill Review of Women’s Pay and Employment (2001). It offered an account of progressive human resource management as a means of addressing gender pay equity and the work-life balance issue. The Review appeals to companies to move ‘beyond compliance’ with minimum legal standards and similarly encourages shareholders to consider not just ethical but also socially responsible investment (see also Myners report 2001). These developments have been paralleled, to a certain degree, at EU level, where a Green Paper on corporate social responsibility was published in 2001. There, too, there has been a debate about the role of non-government actors in promoting a social policy agenda, which has been put largely in terms of corporate social responsibility. However, there are potentially significant differences between the EU and UK approaches in terms of the emphasis placed on the respective roles of shareholders and other stakeholders, and on the role to be played by regulation acting as a ‘floor of rights’. The EU dimension to this issue is particularly relevant to UK practice given the importance of the EC Treaty and Directives in the field of gender equality.

Aims and objectives

Against this background, the project explored empirically and theoretically the developing linkage between corporate governance and pay equity. It aimed to:

• examine how far actors at corporate level (human resource and finance managers, and employee representatives) perceive the issue of pay equity in terms of governance and competitiveness rather than (or as well as) fairness of treatment;
• examine to what extent institutional investors are willing to put pressure on the companies in which they invest to prioritise the issue of gender equality;
• study the mechanisms by which pay equity issues are addressed within companies, in particular in terms of the internal audits recommended by the Kingsmill Review, and the outcomes in terms of the extent of gender equality and segregation;
• study the techniques and metrics (many of which are only just in the process of emerging) through which institutional investors and financial markets view the social performance of companies, with particular reference to the proposed Operating and Financial Review, and consider outcomes in terms of long-term share performance;
• assess more generally how successful ‘soft law’ strategies such as those recommended by Kingsmill are in practice, and how far they rely, directly or indirectly, on ‘hard’ legislative standards of the kind provided by background legislation on pay equity at both UK and EU level.

See also the ESRC Gender Equality Network.

Project leader

• Simon Deakin

Research associates

• Jude Brown
• Dominic Chai
• Colm McLaughlin

Project dates

2007-2010

Funding

ESRC Gender Network