Report shows urgent need to address gender imbalances

Johannesburg – PwC Southern Africa transformation leader Anastacia Tshesane says although South African women are making great strides within the workplace, corporates have more work to do to effectively transform the boardrooms.

  Tshesane says the Covid-19 pandemic has further exposed deep-rooted inequalities in social, political and economic systems, and has demonstrated the importance of the skills that women bring to societies.

  “South Africa does not legally require the disclosure of gender pay gaps, but reporting on the gaps is an opportunity for companies to demonstrate tangible commitments to diversity, equality and inclusion. Development and nurturing of female talent is vital to ensure appropriate female representation at all levels. It is no surprise that companies which promote women to the highest levels of leadership tend to have more engaged boards with greater talent diversity. Women’s Month serves as a reminder of the urgency for closing gender imbalances in the workplace,” Tshesane says.

   The PwC Southern Africa report, titled Executive directors: Practices and remuneration trends report 2020, shows that the gender pay gap between male and female executives is wider for large-cap JSE listed companies and differs according to industry type.

  Across large-cap companies the gender pay gap is most significant at 45%, with a marginal improvement at medium-cap (39%) and a 25% pay gap at the small-cap sector. On a per industry basis, the differences in pay gaps between industries are stark, ranging from a 7% in financials to a hefty 34% in the real estate industry.

The gender pay gap, in simple terms is the difference between the average wages of men and women, regardless of their seniority. ‘Equal pay’ is a different concept but is a connected issue. Equal pay is about ensuring that there are no unjustified pay differences between employees who perform ‘work of equal value’.

  Director in PwC’s people and organisation department and editor of the report, Leila Ebrahimi says there is widespread belief that to effectively improve the statistics, wider disclosure should be mandated.

   “Within the reporting framework in South Africa, there is a renewed focus on transparency and improved disclosure. However, very few companies make disclosures in their integrated reports that set out the gender pay gap and the steps they are taking to close the gaps, and to make sure diversity and gender pay inequality remains a focus area,” she says.

  Some countries have adopted mandatory quotas to increase participation of women on boards. In 2008, Norway obliged listed companies to reserve at least 40% of their director seats for women or face dissolution. In the following five years, more than a dozen countries set similar quotas at 30% to 40%.

  PwC’s report focuses on what factors companies should take into account when calibrating their philosophy towards executive pay. The report also looks at the feasibility of turnaround incentives, disparity of pay, the gender gap, as well as retention strategies for employers, all issues considered against the backdrop of the Covid-19 pandemic. Organisations should also take steps to identify and better understand how to attract, develop and retain female talent in order to narrow the gap. 

  Many companies, including PwC, have introduced training programmes on unconscious bias in an attempt to stimulate behavioural change. This speaks to the recognition that gender inequality is a deep-rooted problem and cannot be addressed on a superficial level.

   “To tackle inequality, both from an income disparity and gender pay gap perspective, companies need to bring these issues to the forefront of their strategy. Covid-19 has highlighted these often-overlooked issues and created a catalyst for change which should be embraced,” Ebrahimi adds.