- Equileap’s latest report on the gender pay gap finds that 78% of global companies do not publish information on pay differences at all.
- The financial sector outperforms the global average for female representation in the workforce.
- A report from WTW Investments makes clear that teams with greater gender diversity get better investment outcomes.
It’s that time of year when organisations roll out the inevitable pink flags and celebrate International Women’s Day.
Despite corporate virtue signalling – brilliantly skewered on a daily basis by Gender Pay Gap Bot on Twitter – there is little to be cheerful about.
Speaking to the Commission on the Status of Women on Monday, UN Secretary-General António Guterres pointed out that gender equality is becoming more distant. “Progress won over decades is vanishing before our eyes,” he says.
On the current trajectory, Guterres says it will take 300 years to achieve. “Global frameworks are not working for the world’s women and girls. They need to change,” he says.
The sixth annual report released last week by the gender equality data provider, Equileap, made for gloomy reading. Looking at 3,787 public companies with a market capitalisation of more than $2bn from 23 developed markets, it found that only 28 companies had closed their gender pay gap over the past year, while the vast majority (78%) do not publish information on pay differences at all.
“It is disappointing to see that despite all the talk and commitments from global leaders, actual progress towards gender equality in the workplace is still painfully slow,” says Equileap chief executive, Diana van Maasdijk.
The right direction
Although movement has been slow, optimists may take heart from the fact that it is, at least, going in the right direction.
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In fact, Equileap found companies within the financial sector performed better than most. There are four companies in the global top ten: Medibank, one of the largest Australian private health insurance providers; Munich-based financial service group Allianz; and Swiss and Australian banks UBS and Westpac.
Equileap points out that the gender equality score for the 516 companies it looked at in this sector is 44% – a meaningful rise from 38% last year. It outperforms the global average for female representation in the workforce too. Against a global average of 38%, banks stand at 56%, insurance firms at 55% and diversified financial groups at 43%.
The score factors in 19 criteria, including the gender balance of the workforce, senior management and board of directors, as well as the pay gap and policies relating to parental leave and sexual harassment.
The results are significant. A report in June last year from professional services firm Deloitte highlighted the multiplier effect of hiring women into senior positions. It found that for every woman that joined the board, up to five more would join in senior leadership roles, just below the C-Suite. It “exponentially amplified” firms’ gender equity efforts, explains Alison Rogish, US banking and capital markets diversity, equity and inclusion leader for Deloitte Consulting in Richmond, Virginia.
But while it is notable that the financial sector is more transparent on the gender pay gap than the global average, 32% is still little to crow about.
Nonetheless, it appears that the message is starting to get through. The Madrid-based insurance group Mapfre – where women make up more than 55% of the workforce and 42% of managerial positions – has committed to gender equality by 2030.
Along with being the right thing to do, Anastasia de las Peñas, corporate director of employee experience at Mapfre, claims it helps “companies to be more competitive”.
Diversity gets “better outcomes”
A report out earlier this week from financial conglomerate WTW Investments, formerly known as Will Tower Watson ($187bn AUM), makes the clear point that investment teams with greater gender diversity, see better investment outcomes. It found that investment teams in the top quartile of gender diversity outperform the bottom quartile by 45bps per annum in terms of net excess returns.
Chris Redmond, head of manager research at WTW in London, describes these findings on the link between investment performance benefits and gender diversity as “truly extraordinary”.
Broken down into asset class, it found that equity and credit display a gender diversity premium of 46bps and 14bps a year respectively [see chart].
The report makes clear that, although there is a lower absolute diversity premium for credit, this should be seen “in the context of lower volatility and smaller absolute return potential in general in this asset class”.
The firm looked at gender diversity data for more than 1,500 investment strategies from global, US and European firms and compared this against the excess net returns of strategies with a five-year track record.
The asset management industry remains a good bell weather of the financial sector. Although 80% of asset managers in the WTW survey have formal diversity, equity, and inclusion policies, only 42% of managers have measurable objectives within them and only a quarter of firms link them to leadership remuneration.
There is still a long way to go. The McKinsey 'Women in the Workplace' report, which was released last year, highlighted that, although the total number of women in the workplace globally was almost at parity, it was still only 26% at board level and 29% at senior vice-president level.
In February, Capital Monitor argued that improved gender equality in Europe could potentially create an additional 10.5 million jobs by 2050, 70% of which would be taken by women.
The sooner that investors realise that inequality hurts the bottom line, the sooner change will happen.
[Read more: Explainer: What does gender inequality mean in practice?]
