Sex Matters in the Board Room – a joint Legal Feminist and Sex Matters briefing

You may recall that Legal Feminist responded to the FCA’s recent consultation on diversity on listed company boards LF FCA consultation. The FCA’s proposals would affect all listed companies, not just those in the financial services sector.

We welcome D&I initiatives and are pleased to suggest an alternative to the FCA’s proposals that is consistent with the current law on every footing – Companies Act, Equality Act, Gender Recognition Act and UK GDPR. It would also result in data being reported on a basis consistent with the ONS and other data reporting initiatives.

Legal Feminist has teamed up with Sex Matters to produce a joint briefing for those new to the topic, explaining the issues with the FCA’s proposals and the advantages of our suggested alternative. Although the consultation has closed, there is still time for those in the corporate and finance sectors to make their views known. If you are in those sectors and/or have contacts who would be affected by the FCA’s proposals, please use the Sex Matters emailer to send the briefing to your contacts either in your own name or via Sex Matters.

See here for the Legal Feminist/Sex Matters briefing.

See here for a link to the Sex Matters blog which explains how you can sign up to help distribute the briefing to those who need to read it.

Thank you!

Legal Feminist responds to FCA consultations

Legal Feminist has responded both to the FCA consultation on diversity & inclusion in listed company boardrooms and to a joint Discussion Paper of the Bank of England, the Prudential Regulatory Authority and the FCA on diversity in the financial services sector. In both cases, while we applaud the intention behind the proposals, and are strong proponents of data-driven policy-making, we felt that the way in which those intentions were to be reflected in rules and policy rendered the proposals at best ineffective and at worst dangerous.

Remarkably, the FCA’s proposals on “gender” reporting failed to disclose relevant conflicts of interest (Stonewall) and made no reference to existing legislation that already requires many listed companies to report their board composition by sex (take a bow, drafters of section 414C(8) Companies Act 2006).

PDFs of our responses can be found at the end of this blog. Below is the Introduction and Executive Summary of our response to the FCA consultation.

Introduction
Legal Feminist is a collective of practising solicitors and barristers who are interested in feminist analysis of law, and legal analysis of feminism. Between us we have a wide range of specialist areas of law including company law, corporate finance, financial services, employment, data protection and privacy, discrimination and human rights law. Our range of specialisms enables us to consider holistically the issues raised in the Consultation Paper (CP) and our collective experience enables us to comment on the practical implications of some of those issues. As a non-aligned collective of lawyers from a range of backgrounds, we do not represent any particular firm or issuer and are therefore well-placed to give candid feedback on the issues raised by the CP.

We responded to Discussion Paper 21/2 published by the Prudential Regulatory Authority, the Bank of England and the Financial Conduct Authority (FCA). To the extent the DP and CP raise common issues, we may address those issues in the same terms.

As feminists, we generally welcome initiatives aimed at promoting diversity and inclusion (D&I) and we thank the FCA for its efforts to drive forward D&I initiatives. We particularly support proposals that seek to gather data to support policy making, provided this is done carefully. However, we recognise that such initiatives engage a range of legal issues and therefore need to be carefully considered by specialists to avoid unintended harm.

As the FCA has no direct responsibility for D&I matters, we are concerned that it does not have access to the particular expertise in international employment, data protection and privacy or human rights law required for a full consideration of the issues raised by the CP. Regretfully, we have formed the view that the proposals outlined in the CP are flawed, perhaps fatally, in view of the difficulty of reconciling them with other laws and regulations in these specialist areas.

Past practice in relation to regulatory intervention in matters of Environmental, Social and Governance has tended towards entrenching rules or policies developed by groups with relevant expertise – for example in relation to the codification in the Listing Rules of recommendations of the Task Force on Climate-related Financial Disclosures. We recommend that the FCA consider appointing a working group, comprising stakeholders with a range of expertise and interests, to consider its proposals further. Members of the Legal Feminist collective would be glad to serve on such a working party.

A number of our concerns are relevant to more than one consultation question. Accordingly, we have framed our response as a general discussion of some of these issues, to which we then refer in answers to the specific consultation questions. We have also included an Executive Summary.

Executive summary

The potential consequences of the proposals in the CP include:

  • confusing disclosures in annual reports as a result of the FCA’s failure to take account of the existing mandatory disclosure regime in the Companies Act 2006
  • poor response rate and/or non-standardised disclosures as a result of incompatibility of data collection and reporting with data protection rules of the UK and other jurisdictions
  • individuals with certain protected characteristics being easily identified, giving rise to issues of privacy and even personal safety
  • poor quality disclosures as a result of failure to take account of different ethnicity considerations applicable to global and overseas Issuers
  • poor quality data resulting from failure to collect data on sex on a disaggregated basis
  • difficulty of comparing data to other data sources, such as the UK Census, resulting from self-identification of gender (Self ID)
  • Issuers being exposed to possible discrimination claims from employees as a result of seeking to comply with rules based on Self ID
  • breach of the FCA’s Public Sector Equality Duty set out in the Equality Act 2010 (EqA) through the adoption of Self ID, which is not recognised by the EqA

For the full text of Legal Feminist’s responses to the consultation paper and the discussion paper, download the PDFs below.

“Cancel culture” – how should an organisation respond to a baying mob?

Image result for pitchfork mob

The scenario is now familiar: your organisation’s social media team is tagged into a Tweet that looks something like this –

Hey @yourorganisation, what do you think of your [employee / supplier’s] comments about [racism, feminism, social distancing, other wrongthink]?  Is @yourorganisation [racist, transphobic, NHS-hating] or will you [sack/cancel/condemn] your employee/supplier by the end of the day?

It is tempting for an organisation in this situation to hastily distance itself from the “offensive” statement and its maker (called the “Individual” in this article) in an attempt to call off the mob and protect the organisation’s brand.  Responses have ranged from terminating contracts[1], sacking Individuals[2] and explicitly or implicitly condemning Individuals[3].  But haste can lead to misjudgements, potentially resulting in an embarrassing climb-down or even legal action[4].  That makes choosing the right response to a “cancel call” important , particularly as the range of subjects which can trigger an outcry has expanded to include areas where nuanced disagreement is not only justified but also essential. To help organisations to keep their heads when all around them are losing theirs, we suggest a response protocol.  As ever, this article should not be considered legal advice – the needs of every organisation will vary.

  • Have a clear escalation policy.  It is too easy for a junior member of the weekend shift to be panicked into a crowd-pleasing response from which the organisation might have to embarrassingly row back.  The escalation policy should put a moratorium on any public statement being made by the organisation until staff with appropriate seniority (which may be the CEO or Chairwoman) have been consulted.
  • Remember that any public response must take account of legal responsibilities, for example under employment law or the Equality Act.  It must also avoid anything which is likely to be defamatory or any person or organisation. This is a very complicated area of law but as a starting point, if you write something which refers to a living individual and would tend to lower their reputation in the eyes of a reasonable reader, give strong consideration to alternative wording. However, the legal niceties of when something is and is not likely to be libellous (in the sense that it would give rise to a viable legal claim) are extremely complex and beyond the scope of this article. If you are in any doubt, it is worth seeking some professional advice before you respond. 
  • Put in place a draft holding statement like the one below.  This can be quickly adapted for publication once the escalation policy has been followed:
[Organisation] notes the allegations/complaints being made about [Name].  [Organisation] takes its values very seriously and these values include fair treatment of its [customers/employees/agents].  [Organisation] will look into the circumstances in more detail before taking any further action.  No further public statement will be made on this matter [until the circumstances have been investigated].
  • All team members should understand the need to refrain from further public engagement, even if customers, clients, advertisers, funders and industry bodies are tagged into the “debate”.  In rare cases it may be appropriate to make pre-emptive contact with key stakeholders to ask that they respect your position and not make any public comment on the matter.  If done at a senior level, most will understand the need to follow due process.
  • Make contact with the Individual, particularly if an employee, to tell them that no precipitate action will be taken and that any further investigation or process will allow them to be heard.  Depending on the circumstances, you might ask them to withdraw or edit their statement, at least pending further discussions.  However, we suggest you should avoid compelling or pressuring them to do so.
  • Ensure that any follow up investigation or action is conducted in accordance with internal policies and applicable law and regulation, such as the Employment Rights Act, the ACAS Code of Practice on Disciplinary and Grievance Procedures, and  the ACAS Guide: Discipline and Grievances at Work.  It is surprising how often organisations are panicked into ignoring their own policies, leaving an open goal for further action.
  • Line managers and department heads should be briefed on how to respond if employees complain, as when  a group of employees at Hachette UK objected to being asked to work on JK Rowling’s new children’s story, The Ickabog, because they disagreed with her views on transgender issues.  We suggest that the holding statement above can be adapted for this purpose. 
  • Any investigation or disciplinary process is likely to involve consideration of internal policies (particularly D&I and respectful working environment policies).  You should seek as far as possible to have tailored, rather than template, policies and ensure that they correctly reflect the law (for example in correctly reproducing the nine protected characteristics under the Equality Act). 
  • We also suggest that policies be drafted with an eye on the values of freedom of speech and diversity of thought and the potential for conflict of rights, such as employees’ rights to express and campaign for their political opinions.  An organisation’s policies and values should neither require Groupthink nor rule out the possibility of respectful disagreement.

Finally, social media pile-ons are unpleasant and often aggressive.  Remember if your agent, client or employee is being targeted, that this is an Individual with whom you chose to work.  Your response to a pile-on should always keep in mind the possibility that the mob may be mistaken.


[1] See the case of Maya Forstater v CGD Europe and others: 2200909/2019

[2] Gillian Phillip, a bestselling children’s author, was  sacked from the team writing under the “Erin Hunter” name after expressing support for fellow writer J. K. Rowling

[3] Actor, Laurence Fox was called a “disgrace” by Equity after expressing views about racism (or the absence thereof) in this country on Question Time .  Allison Bailey, an English barrister, was the subject of complaints after co-founding the LGB Alliance.  Without first discussing it with her, her chambers, Garden Court, tweeted that they were investigating Ms Bailey, implying that her behaviour warranted investigation .

[4] Forstater is in proceedings against her former employer, Fox won an apology from Equity, Bailey raised over £60,000 in under 24 hours to fund a claim against Garden Court and Stonewall