Women-only shortlists to increase gender representation is “unlawful under equality law”, the Equality and Human Rights Commission (EHRC) has ruled.

Vince Cable introduced the idea of women-only shortlists in March to help tackle the issue of gender balance in FTSE 350 boardrooms. He asked for guidance from the EHRC on the legality of the proposal, which he hoped would help FTSE companies reach their target of 25% representation of women on boards.

The commission’s guide, published yesterday, said gender targets should not be achieved through positive discrimination.

Vince Cable said:

“The headhunting industry have been looking for reassurances on the legality of all-women shortlists. That’s why I welcome the EHRC’s guidance, which has clarified this issue and highlighted what lawful measures can be taken to help deliver greater boardroom diversity.”

The report comes in conjunction with a nation-wide inquiry into the recruitment and selection processes of Britain’s top 350 companies.

Gaenor Bagley, head of people at PwC, said that positive discrimination of this kind is inappropriate and instead a system of targets, rather than quotas, should be implemented to drive “affirmative action”. She believes this will help create an environment that offers enough support for female candidates.

Ms Bagley also said that in the case of an “absolute tie” between candidates, it is then right to favour the more diverse candidate.

The EHRC has identified mentoring and sponsorship programmes, as well as allowing for maternity leave, as being exceptions to the rules against positive discrimination.

Cable said:

“While more needs to be done to ensure women are properly represented in the boardroom, there are now no all-male boards and women account for over 22% of FTSE100 board positions. This goes to show businesses are now seriously addressing this issue and the voluntary approach is working.”

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