Firms are trying to retain female staff and fix gender equality issues. Here’s how
While progress toward gender equality may be slow and not without its shortfalls, experts say some firms have singled out their own internal issues and are trying hard to turn things around.
A PwC report last week warned that women’s progress in the workplace in terms of achieving gender equality was expected to fall back to 2017 levels as a result of the pandemic. It warned that in order to undo the pandemic’s damage to women’s position in the workplace by 2030, progress needed to be twice as fast when compared to the previous decade.
Looking at some of the largest companies in the U.S., non-profit Catalyst found women hold 30 CEO positions at S&P 500 companies, representing just 6% of jobs at that level. Meanwhile, of the 668 largest listed companies in Europe, only 48 had a female CEO, according to the EU-backed non-profit European Women on Boards. Once again, this represented just 6% of the total companies analyzed.
Ahead of International Women’s Day, CNBC Make It spoke to investment experts to find out which European firms had been showing the most progress in terms of gender diversity.
‘Ambitious targets’
Amy Wilson, an equity ownership services engager at investment manager Federated Hermes, highlighted British drinks maker Diageo as one example.
The alcoholic beverages industry has “traditionally not (been) great for gender diversity,” Wilson told CNBC via telephone. However, she pointed out that its board was now 60% made up of women, following a concerted effort in this area.
It is making encouraging progress below the board as well, she said, with women making up 37% of its executive committee. Diageo has set a target to have women in half of all leadership roles by 2030 and is aiming to have 45% of leadership roles held by people from ethnically diverse backgrounds by 2030.
“So, I think it’s a really good example of a company setting ambitious targets, thinking about diversity a little bit more broadly than gender diversity as well and making progress,” Wilson said.
Diageo ranked top in terms of the proportion of women on its board in the final report from the Hampton Alexander review, published in February.
The five-year review, backed by the British government, was an initiative to increase the representation of women in leadership positions and on boards of FTSE 350 companies. As of this year’s report, there are no longer any all-male boards in the FTSE 350.
Oil major Rio Tinto was another listed company in a traditionally male-dominated sector that Wilson highlighted as making progress on gender diversity.
She said Federated Hermes spoke to Rio Tinto back in 2017 about the lack of women on its board, accounting for around 16% at the time. Wilson added that it actually led the investment firm to recommend voting against the election of the chair at the general meeting that year because it couldn’t see how the company could ensure 33% of board members would be roles held by women by 2020 — the target set by the Hampton Alexander review.
“Actually, the board is now 40% women which is a great achievement particularly given the industry they sit in,” she said.
‘Laddish culture’
Miranda Beacham, the head of environmental, social and governance for equity and multi-asset at asset manager Aegon, singled out IT service firm Softcat for its efforts to turn around its lack of gender diversity. Beacham said Chairman Martin Hellawell, who was formerly CEO of the business, admitted Softcat had a “laddish culture.” Softcat did not immediately respond to CNBC’s request for comment.
“So, he has worked really hard since he’s become the chairman, trying to change the inclusivity of the company, to make it a better place for not only women,” she said.
IT firm Aveva was another Beacham said was making efforts to close its gaps in gender diversity. One area where it was trying to rectify this was in its workforce in India, she explained, where it was seeing a lot of its female workers leave to start families and struggling to rejoin further down the line because of changes in the software industry.
In 2018, Aveva started reaching out to the women leaving so they could offer help to brush up on their skills should they decide to rejoin the company. Beacham said it was “quite comforting” to hear that this strategy had meant the firm has been able to retain a lot of their female employees.
That being said, Aveva was the fifth-worst performer in the Hampton Alexander’s 2021 ranking of board diversity, with just two women on its board of nine directors.
And Beacham added that diversity and inclusion did bring the “ability for different perspectives to challenge the status quo and to ask the questions that need to be asked.”
“So, you’re going to end up with better decisions being made,” she said.
The EU-backed EWOB in January published its 2020 ranking of the top European companies in terms of gender diversity on the Stoxx 600 index. It ranked firms according to the proportion of women in leadership, board, executive level and committee roles.
Here are the top 10:
1. Assura
2. Wihlborgs Fastigheter
3. Grainger
4. Kinnevik
5. Sweco
5. Iliad
7. Asr Nederland
8. Halma
9. Sodexo
9. Suez Environnement
Full gender equality could add as much as $28 trillion to global gross domestic product by 2025, according to a Bank of America report published last week.
However, the report said that while women’s labor force participation had moved closer to men’s in every advanced economy in recent decades, women were “still less likely than men to engage in paid work.”
“When women do work, they are more likely to do it part-time, are less likely to advance to management positions, are more likely to face discrimination, and they earn less than men,” the authors of the report said.
The coronavirus pandemic has only exacerbated gender inequality, with women more likely to work in the hardest-hit sectors. Research has also shown that women have been taking on the brunt of unpaid work during the global health crisis, such as additional child care responsibilities and domestic duties.