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Corporate & Commercial

Time for change – gender balance, diversity and inclusion on State Boards

By Aoife Murphy

20 October 2020

Introduction

In 2016 the Department of Public Expenditure and Reform (“DPER”) published a revised and updated Code of Practice for the Governance of State Bodies (the “Code”) which is aimed at ensuring that “both commercial and non-commercial State bodies meet the highest standards of corporate governance”. The Code provides a framework for the application of best practice and is based on the underlying principles of good governance; being accountability, transparency, probity and a focus on the sustainable success of the organisation over the longer term.

In September 2020 a new annex to the Code on Gender Balance, Diversity, and Inclusion was published (the “Annex”) with the aim of supplementing the existing Code. The Annex sets out measures designed to enhance diversity on the boards of State bodies (“State Boards”) and addresses recommendations made by the Inter-Departmental Working Group on Gender Balance on State Boards in its report (the “IDG Report”), which found that further work was required to build on recent improvements in gender balance on such State Boards.

The IDG Report noted that as of December 2018, the average gender balance across all State Boards stood at 41.5% female membership and 58.5% male membership, however the report noted that only 47.6% of the individual State Boards had met the 40% target. Furthermore, the IDG Report noted that the representation of women among board chairpersons “lagged behind” the percentage of female board members, with just 29.8% of serving chairpersons being women.

What is a State Body?

The Code provides that while there is no “precise definition” of a State body, the following criteria will be of assistance in defining such a body:

  1. The Minister of the parent Department under whose aegis the State body lies (the “Minister”) presents legislation relating to the body to the Houses of the Oireachtas.
  2. The Minister lays the body’s financial statements and/or annual report before the Houses of Oireachtas.
  3. The Minister and/or the relevant Department has statutory responsibility for one of more of the following:
    1. provision of funding;
    2. presentation of estimates in the Dáil;
    3. nomination / dismissal of all / majority of the members of a body’s Board, Authority or other governing body;
    4. appointment of Chief Executive Officer (CEO);
    5. consent functions in relation to remuneration, superannuation, fees; and/or
    6. consent functions in relation to borrowing.
  4. The statutory basis of the body.
  5. The Minister sets policy direction for the body.
  6. The Minister has the power to issue directions, codes, regulations or guidelines in respect of the body.
  7. The Minister approves Statements of Strategy.
  8. The Secretary General of the parent Department is the Accounting Officer for the State body.
  9. Employees in the State body are participating/are eligible to participate in a Public Service Pension Scheme.

Key Measures of the Annex relating to Gender Balance, Diversity, and Inclusion

The Annex includes the following measures:

  1. New reporting measures designed to provide greater transparency around State Boards which have not reached appropriate levels of gender balance.
  1. State bodies which have not reached the 40% gender balance target on their boards will be required to set out the measures that will be taken to deliver on this target.
  1. Ministers to be informed of the gender balance on State Boards at the time of making further appointments.
  1. Each State Board shall report annually on its progress in promoting equality, diversity and inclusion within the organisation.
  1. State Board evaluation processes should be expanded to consider issues around gender diversity and skills mix, as a means of enhancing State Board effectiveness.  In this regard, basic self-assessment evaluation questionnaire guidance is included in the Annex.
  1. State Board terms should be varied to allow for an acceleration towards better gender balance in membership.
  1. The State Board should vary the terms of Board appointments to between three and five years. A period of appointment may be renewed for a further period, to a maximum of eight years in total (unless it is exceptionally decided, with Ministerial approval, that a Board member should serve a further additional Board term, or that a renewal of appointment would bring to total period of service to above eight years).

Commentary

The publication of the Annex serves as a timely reminder for State bodies to reconsider and evaluate the composition of their Boards, both in a general context and in the context of addressing gender balance, diversity, and inclusion. In accordance with the Annex, each State Board in its annual self-assessment evaluation process are required to incorporate a detailed analysis of the gender, diversity and skills mix within the Board, including where relevant a critical assessment of the reasons why gender balance in Board membership has not yet been achieved. State Bodies should accordingly familiarise themselves with the changes to the Code brought about by the Annex.

The Annex can be found at the following link:

https://govacc.per.gov.ie/wp-content/uploads/Annex-to-the-Code-of-Practice-for-the-Governance-of-State-Bodies.pdf 

For more information on the content of this insight please contact:

Aoife Murphy, Solicitor| E: aoife.murphy@rdj.ie  T: +353 21 4802762

 

 

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