Positive picture of women emerging on corporate boards

A promising picture of women emerging in executive roles is taking place in corporate South Africa –albeit slow. Some companies are enjoying the benefits of a diverse board and have put a number of initiatives in place to boost the representation of women at executive level within their organisations. However, in spite of significant steps taken by some to increase the number of women representation on boards, the proportion of women to men in executive roles is still low but not out of line by global norms.

“A board that is diverse in its composition is likely to make better and informed decisions which will positively impact the bottom line of an organisation,” says Maura Jarvis, an Associate Director at PwC, HR Consulting.

There are a number of drivers responsible for organisations achieving these positive results. Some of these include legislation and policies – in the form of specific quotas or targets. Further, it is also encouraging to note there are a number of corporations that are emerging as inspirational role models.

“Although some strides have been made to unleash the potential of women in the corporate workplace, there are a number of organisations and industries that have yet to make more immediate and substantial progress,” Jarvis comments.

Women in South Africa are as well educated as men, and in many instance they have a higher education and are more skilled. More than 60% of graduates from bachelor’s, or equivalent, programmes are women, which is higher than the G20 average of 55% and the OECD average of 58%. At master’s and doctoral level in South Africa, women represent 49% and 43% of graduates respectively.

In Africa, only 5% of CEOs are women. This falls short of the desired target of 50% to achieve gender equality. In South Africa, JSE listed companies have some way to go in achieving the target for female CEOs. There is only one female CEO in the top 40 JSE listed companies, Maria Ramos CEO of Absa Bank. The sparseness in medium and small cap companies are too few to warrant calculating a percentage.

Some countries, such as Norway and France, have adopted mandatory quotas to increase the participation of women on boards. Organisations that fail to meet these quotas face possible dissolution.

The JSE introduced listing requirements in 2015 that require listed companies to have a policy for the promotion of gender diversity at board level and disclose their performance against it. The provisions were effective from January 2017, and the JSE is expected to report on the progress made.

The critical area to achieving gender parity is still the gender pay gap. An extrapolation of historical trends suggests that the gender pay gap across the OECD might not close fully for almost a century, with some countries achieving parity earlier than others.

In South Africa, total guaranteed pay for women is still below the level paid to their male counterparts, according to PwC’s recent ninth edition of ‘Executive Directors’ Remuneration and Practices’ report. The pay gap differs from industry to industry. For example, women executives in the financial services sector earn 7% less than their male counterparts. Executive women in the industrial and basic resources sectors, earn 9% and 7% less respectively, than their male co-workers.

What are the causes of the pay gap? Although direct discrimination – women getting paid less than men for the same work- is a factor, it does not fully explain the global gender pay gap. Research shows than once the unadjusted pay gap which averages 10 – 20% in advanced economies, is controlled for occupation, education, experience, location and the company, the resulting adjusted pay gap falls to less than 10%. Although direct discrimination is an important factor driving the pay gap, other factors are also at play, namely the lack of female representation in higher paying jobs and industries.

Some countries have introduced mandatory regulations compelling companies to report on the gender pay gap within their organisations. The UK recently joined a growing number of countries, including the US, Australia, Sweden and Denmark, which require companies to publish gender pay data. Although there are no penalties for non-compliance in the UK, the Government is keeping this under review. The significant challenges for companies are the potential negative publicity, impact on the company reputation and employee relations, and the potential risk of equal pay claims.

Jarvis, says: “The intention of the legislation isn’t to name and shame, but rather to accelerate progress on gender equality by closing pay gaps and hopefully to bring more women into senior positions.”

In South Africa, recent amendments to the Employment Equity Act prohibit companies from discriminating unfairly between the remuneration and conditions of employment of employees doing the same or similar work or work of equal value. Companies’ remuneration structures, policies and practices need to be carefully evaluated in an attempt to identify and quantify cases of possible patterns of remuneration and conditions of employment which may fall foul of the listed provisions contained in the Act.

Whether the amendment to the Act will prove to be adequate to protect employees against willful, unfair and discriminatory pay practices remains to be seen. A number of cases are already filtering through the courts.

“Gender pay forms part of the growing focus on fairness and inclusion within our society, which are increasingly important elements of how businesses are expected to operate and how they are judged,” Jarvis says.

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