Gender discrimination at senior executive level - what you need to know

Women enter the accountancy profession in large numbers, but often by the time they would otherwise be ready to take on leadership positions, they have dropped out and women remain under-represented in leadership positions.

Leadership culture has been defined by the centre for creative leadership as “the self- reinforcing web of beliefs, practices, patterns and behaviours. It’s the way things are done – the way people interact, make decisions and influence others.”

Defence against discrimination claims

While it is becoming less likely that a CEO or panel appointing a new senior executive would deliberately set out to recruit a man, if there are only men taking promotion decisions, care needs to be taken to identify “self-reinforcing beliefs and practices”, as these can lead to unconscious bias and to well-qualified women with demonstrable leadership qualities being overlooked.

However, it is important to note that including a woman in the recruitment decision is not a defence to a claim of discrimination if in fact the decision made is still discriminatory, since it is not a defence to a direct discrimination claim that the alleged discriminator is also a woman.

When is a decision not to promote a woman discriminatory?

If the woman can show that she has been treated less favourably than a real or hypothetical man in similar circumstances to her own, this is where the risk lies. Importantly, she does not have to show that she is less well off, but rather that she would have preferred to have been treated differently.

It is therefore important for care to be taken over any assumptions that are made when considering candidates. For example, a senior woman who chooses to remain involved during their maternity leave and to attend key meetings, should not be treated with suspicion or accused of having an unhealthy obsession with work, rather than being praised for their dedication and hard work and considered for promotion.

Employers should ask themselves why they are appointing a man rather than a woman to a leadership position and ensure that this decision is not in any way related to sex, as, at the tribunal stage of a potential subsequent claim, the reason why the candidate was treated less favourably will be crucial to its success or failure.

Taking positive action

It is also permissible under the Equality Act to take positive action in a firm where the current leaders consider women to be under-represented. In that situation, a panel considering a number of candidates who are as qualified as each other can treat a female candidate more favourably than her male competitors in making a recruitment or promotion decision, and this can be an effective way of promoting more gender diversity in leadership.

The dangers of language

Another issue is the use of gender-skewed language. Most employers know to stay clear of direct references to gender in job adverts, but what about language that could be indirectly discriminatory? In a recent LinkedIn report “Language Matters,” over 250 hiring managers and 100 employees were polled on the topic of language used in job adverts. The findings show that 52% of women would be put off applying for a job where the workplace was described as “aggressive”. The data showed that currently over 50,000 job advertisements (across a variety of sectors) include the word “aggressive”! Whilst the characteristic is not gender-specific, these statistics suggest that inclusion of such language may be indirectly discriminatory and should be avoided.

Language was also considered by the Employment Appeal Tribunal recently in a direct discrimination claim brought against Commerzbank AG. The Claimant was a senior VP who applied for a role as Head of Market Compliance. Pending that decision being made, the male candidate was appointed as acting Head on the basis that women were “divisive personalities.” The manager explained that women had tried to “further their own interests” when canvassing him which he found “intrusive.”

On appeal, the Judge stated that in assessing whether the tribunal should draw an inference that the employer had discriminated against the woman on grounds of sex, it should look at the language used by the decision maker, because it might be an indicator that consciously or unconsciously the decision was made on discriminatory grounds, or that the decision maker was acting on assumptions about women rather than treating the particular woman as an individual.

How to keep a diverse talent pool

Accountancy firms should want to mirror society, because it is their membership and client base. As Christine Lagarde has said “Diversity, by way of different genders, colours, religions, educational background, enriches the process by which you bring views together, they are then debated and you arrive at a good decision having taken on different perspectives because you see the world with your own sex, colour, religion, background, family circumstances.”

Many factors affect diversity in financial services firms, such as a lack of adjustments and flexible working hours/leave periods, attrition from the talent pool as a result of women leaving to have a family and lower pay caused by continuing gender pay gaps, but discrimination remains a risk factor which well-run firms will wish to avoid.