G20 to learn about Daughter-Water?
It seems from media reports that the gender gap in workforce participation will be one of the key themes of this weekend’s G20 Leaders summit in Brisbane. It has been reported that finding ways of overcoming barriers to female entry or re-entry into the labour market will be a central part of the overall plan to boost global economic growth by 2 percent.
This follows an initiative closer to home in recent weeks where the Workplace Gender Equality Agency (WGEA) has highlighted the persistent – and unacceptable – gender pay gap in Australia. They did so by delivering bottles of ‘daughter-water’ to the CEOs of many organisations – somewhat playful, but underpinned by a significant issue! Little improvement in the gender pay gap has been seen over the past 20 years. It’s reasonable to ask how can this be?
I believe that one of the key factors associated with the gender gap is a lack of measurable diversity improvement metrics. In particular, the limited growth in the number of women in senior executive ranks.
Earlier this year, KPMG published a report, commissioned by the ASX that assessed listed companies’ compliance with the ASX Corporate Governance Council Principles and Recommendations on Diversity. These Recommendations require companies to, inter alia, establish a diversity policy, set measurable objectives and report on achievement against those objectives, and report on the number of women working at various levels of seniority, up to and including the board. Companies have the choice of complying with these Recommendations, or explaining why they choose not to.
Our analysis found that while more companies were adopting a diversity policy, the setting and reporting of specific measurable objectives could certainly be better. In our report, we argued that the inconsistent quality of measurable objectives “raises the question of whether gender diversity as a business issue has gained enough traction to deliver the level of progress expected by the community.”
We stand by this. While the adoption of diversity policies is clearly improving, there are still too many companies reporting aspirational statements rather than quantifiable objectives (or targets, if you prefer). Given that this is an ASX listing requirement, it suggests that getting employers to take the more difficult steps necessary to address a gender gap is going to be an even greater challenge, and will need real commitment from many companies.
While on the surface the increased level of adoption of diversity policies seems encouraging, it is clear many companies have simply ‘ticked the box’. They should be aware that investors and other stakeholders are now looking for companies to evidence the effectiveness of their policies. This means they are looking at the nature of the measurable objectives, and the progress of achievement.
To my mind, effective diversity policies go hand in hand with pay equity and a gender equality strategy. The impetus for change must come from the top – the Board and senior executives must drive their companies not only to comply with listing requirements by adopting diversity policies, but to drive these policies to secure proper implementation and produce meaningful change.
Let us hope that the G20 initiatives in this area focus a few minds to seriously addressing issues among Australian employers.KPMG Australia has today achieved the Employer of Choice for Gender Equality (EOCGE) citation with the Workplace Gender Equality Agency (WGEA). KPMG has also been recognised by the Japanese Government as one of only three Australian companies in their 50 Leading Companies for Women in the Asia-Pacific Economic Cooperation (APEC) report. Gary Wingrove, KPMG CEO is a Pay Equity Ambassador. View the Daughter Water video Can a drink close the pay gap