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Fairness and the fairer sex

Costly discrimination cases should concern companies

This week has brought yet another round of sexual discrimination claims against high-profile companies. While the recent spate of such cases raises concern over the fairness of company practice, it doe not mean that opportunities for women have ceased to improve. It does, however, show how much remains to be done.

The most recent case concerns Morgan Stanley, which earlier this week agreed to pay out $54m (£29m) ahead of a case brought by the US Equal Employment Opportunity Commission. Meanwhile, in the UK there is the ongoing case of Stephanie Villalba, a former employee at Merril Lynch, who is seeking £5.7m in damages. Merrill has already paid out more than $100m in other compensation claims.

Despite the size and scale of the new claims, their message is not entirely negative. For one thing, the growth in cases reflects the increasing number of women rising through the ranks of these professions. According to a Securities Industry Association survey, 19 per cent of managing directors in the securities industry in 2003 were women, up from 14 per cent in 2001. Recent cases against Oracle and Computer Associates in the UK demonstrate similar progress for women in the IT sector, an industry that was traditionally the preserve of men.

Second, it reflects women’s growing assertiveness. No longer are disgruntled female employees afraid to complain if they are passed over for promotion or sacked after maternity leave. Instead, they are challenging their managers and, in many instances, winning.

Third, the increasing size of the compensation payouts reflects the extent to which women have been ascending higher and higher in the corporate hierarchy, where earnings – and therefore potential lost earnings – are much greater.

The persistence of sex discrimination is disturbing, however, and not just for women. Companies should be concerned, too. Not only is there the direct cost of settlements, but there is also the loss arising from wasted human resources. If women sense that the company atmosphere is negative for their future career prospects, they may leave mid-way through their working lives. This is even more likely where women are sidelined or demoted following maternity leave.

Yet companies in today’s marketplace face enough difficulty in expanding their talent pool without alienating their own expensively trained people. In response, many companies have already adapted their practices as well as their attitudes, offering greater opportunities for women – and indeed men, too – to fit their work and home lives together via flexible hours or remote working.

Conditions are therefore improving, although unevenly. There may be a glass ceiling hanging over corporate boardrooms across the world’s financial capitals, but more and more women are daring to shatter it.

“Financial Times” 14th July 2004