If you actually care about the pay gap, stop gender-washing boards with non-executives
Most employers genuinely care about gender pay disparity, but putting women on boards is not enough to bridge the gap, writes Jess Tomkinson
Right now, there are more women than ever before sitting on boards of major financial services companies. So, in theory, companies have acknowledged the demands to promote gender equality in the workplace. But this doesn’t always translate in terms of financial metrics. We have a long way to go before pay parity is achieved and the pace of change remains disappointingly slow.
While the number of women being appointed to directorships has jumped, pay is failing to keep up with that. The capacity in which women occupy those roles is being touted as a key reason for this. Of the talented women on FTSE 100 boards, 91 per cent are non-executive directors and only nine per cent are executive directors. Non-executive directors typically have a greater degree of separation from day-to-day decision making and tend to have less power and influence within the company, ultimately receiving a smaller paycheck than their executive colleagues.
Criticism has been levied at some companies who are accused of putting women on boards, patting themselves on the back, and forgetting about the financial disparity between these roles. It is difficult to see how equal pay can be achieved in the near future if women are being ushered into directorships with lower remuneration. Could it be that a new glass ceiling sits between women in non-executive roles, and the top executive roles?
If the answer is yes, the result is that while the presence of women in directorships is improving, the benefits are not realised by these women or the companies they work within.
Ensuring women have positions at board level is well-documented as resulting in better financial performance. Women share new perspectives to refresh companies historically run largely by men. The upshot is a sustained increase in innovation which enhances a company’s status as a resilient competitor. Looking to the future, the benefits ripple down by helping to attract talent. Unfortunately, the reality is that only a small minority of women are in executive director roles and so role models and a clear path to leadership for women entering companies at graduate levels are yet to seriously materialise.
Most employers appear to genuinely care about narrowing the gender pay gap. Now is the time to be more creative about identifying and overcoming barriers to progression, than simply relying on mentoring to solve what is a deep-rooted and nuanced issue. Companies will likely make better progress by taking executive succession planning seriously at board level. Chief executive and similar C-suite positions have an extremely low turnover so opportunities to move into these roles are rare. Leaders should be thinking well into the future if they hope to see meaningful progress in closing the gender pay gap.
Of equal importance is a company’s ability to retain senior women. By some statistics, women last in chief executive roles for almost three years less than men. At the centre of the problem tends to be company culture and how that can be a barrier to women thriving in the workplace.
Women are still more likely to have greater responsibilities in childcare and family life. They are also likely to be more heavily scrutinised at work, partially because of ingrained biases, but often also because of the so called “glass cliff”, having been appointed to their roles at times of crisis. By fostering a culture of inclusion led from the top, including implementation of flexible policies, and by showing a clear and transparent path for progression, women are more likely to aspire to leadership positions. Feeling supported and respected in an environment where women believe they can thrive would go far in empowering women to stay in well-paid roles.