Wage gender inequality worsens in SA

Eradicating the gender pay gap will significantly contribute to transforming South Africa’s economy by alleviating the financial vulnerability that particularly affects women.

Corporate board directors and investors have a key role to play.

Last year’s World Economic Forum Global Gender Report ranked SA’s gender equality 19th out of 149 countries, but on the element of wage equality for similar work the ranking plunged to 117th.

In South Africa, men are still more likely to be in paid employment than women, regardless of race. Addressing the pay gap is an important step towards income justice for SA’s women.

Women’s lower level of education is often cited as a reason for lower pay, but South African women are graduating at the same rate or better than men in higher-paid fields. This renders the argument that women don’t have the right types of qualifications null and void.

Corporate board members and investors can exercise “responsible activism” to address gender-based wage inequality in the companies they lead or invest in. Firstly, board members and shareholders can use their oversight role to ensure companies comply with legislation and corporate governance codes on equal pay for equal work and report on pay differentials.

These include the Employment Equity Act, which enforces equal pay for work of equal value, and requires employers to report on income differentials. The King IV Codes on Corporate Governance stipulate that a board of directors must approve a remuneration policy and a report on its implementation as part of the annual report. These must show that the company “remunerates fairly”.

While application of the King Codes is voluntary, the JSE listing requirements make mandatory tabling the remuneration policy and implementation report for a shareholder vote. Both the Act and the King IV Codes imply that companies do gender pay audits as a basis to adjust pay policies and have an implementation plan.

Shareholders can vote against the policy or implementation report if they believe it is unfair. They can also engage with the board’s social, ethics and remuneration subcommittees to drive transparency in gender pay reporting.

Anita Bosch is an Associate Professor at the University of Stellenbosch Business School