City heavyweights call for action on diversity
British firms are beginning to wake up to gender pay discrepancies and that solving them makes good business sense, writes Lucy Burton
BRITAIN’S most powerful business leaders are calling for greater action on gender diversity and workplace sexism in the run-up to new pay gap reporting rules coming into force.
Boardrooms across the UK have been warned that they need to get tougher on gender inequality or face severe reputational consequences in the coming months.
From April, gender pay gap reporting will require all UK companies with at least 250 staff to publish the gap between male and female employees.
While the number of all-male boards has dropped in recent years, there are still very few women in top jobs, with more men named David, Steve or Stephen leading a FTSE 100 firm than there were female bosses in 2016.
Sir Roger Carr, chairman of BAE Systems, warned companies that ignored female workers “you do so at your peril”. Opportunities for women across British businesses have been limited for far too long, he said.
“A fair reward structure has risen to the surface – there is an awareness level that wasn’t there even a year ago,” he told The Sunday Telegraph. “It’s not a women’s issue, it’s about getting businesses equipped with the best possible roles – the talent pool of the country will then be harvested. At least half the talent is female in this world. If you ignore that you do so at your peril.”
Lady Barbara Judge, the first female chairman of the Institute of Directors and one of the UK’S most powerful business women, said although the UK had made real progress in recent years the battle to get more women into senior jobs was “far from over”.
“The main cause of the [pay] gap is the fact fewer women progress up the work ladder than men. Much more must be done to ensure more women reach the executive level,” she said.
“We’ve always been quite gentle in this country saying we’re not misogynist. Maybe there’s some unconscious bias, which is a gentle rebuke,” said Sir Philip Hampton, chairman of Glaxosmithkline, who last year led a government review into women in business. “There is a question that there is more than unconscious bias [at play] – more sexist than we explicitly recognise.”
City fund manager Helena Morrissey said the new law was “part of a crescendo building”, while Pwc’s Jon Terry said companies would be forced to deal with the issue this year because “their reputation is now at risk”.
‘Iwant all the girls watching here now to know that a new day is on the horizon,” Oprah Winfrey said in her Golden Globes speech last Sunday, the ceremony’s most political in history. But she wasn’t just talking about a new era in Hollywood. Sexism, she reminded everyone that evening, affects staff in the workplace all around the world. She listed farm workers and domestic workers, those working in factories and restaurants, people in academia, engineering, medicine, science, technology, politics, sports and business.
“They’re the women whose names we’ll never know,” she told a room of celebrities wearing black in protest against gender inequality.
Any chief executive watching last week will know she hit the nail on the head. Just as Winfrey gave her speech in California the BBC’S China editor Carrie Gracie resigned from her role due to pay inequality with male colleagues. “It is a century since women first won the right to vote in Britain.
Let us honour that brave generation by making this the year we win equal pay,” Gracie wrote in an open letter published on her blog. Days later it emerged that Mark Wahlberg was paid 1,000 times more than Michelle Williams for last-minute reshoots of Ridley Scott’s new thriller All the
Money in the World, cashing in $1.5m (£1.1m) to her $1,000.
It is not only employees in the film and media sectors saying enough is enough. Bosses across industries are aware this is the year they need to get tougher on gender inequality or face severe reputational consequences, particularly in Britain where there is less than three months to go before firms have to publish their gender pay gap figures under new rules.
“The legislation is timely. A whole host of factors, including the sexual harassment scandals, are combining to make people realise we need a more radical rethink about gender equality,” says City fund manager Helena Morrissey. “The gender pay issue is part of a crescendo building. There’s a need for leaders in business and politics to better connect with people.”
The public is likely to pile pressure on businesses that publish large gulfs in pay in the coming months, with big disparities between the average earnings of men and women highlighting gender imbalances at the top. While the number of women in non-executive roles has improved over the years – there were 152 all-male boards across the FTSE 350 in 2011, whereas today there are just eight
– you can still count the number of women running the UK’S biggest companies on less than two hands.
In 2016 there were more men named David, Steve or Stephen leading a FTSE 100 firm than women, according to human resources body CIPD. “We’ve always been quite gentle in this country saying we’re not
misogynist, maybe there’s some unconscious bias, which is a gentle rebuke,” says Sir Philip Hampton, the chairman of Glaxosmithkline who last year led a government review into women in business.
“There is a question that there is more than unconscious bias [at play] – more sexist than we explicitly recognise. Are we [UK businesses] very different from Westminster or Hollywood? No lurid scandals so far but there should be questions asked.”
Most senior women interviewed by The Sunday
Telegraph said that they have had to push back on sexist attitudes throughout their career or felt like they had to work harder than men to be judged as an equal.
Megan Butler, the most senior female regulator at the Financial Conduct Authority, says she had to fight to keep her professional position when she first became a mother and so deliberately never discussed her family life in the office. “[There’s an assumption] that you won’t want to do any of those trips abroad or this challenging piece of work. It’s a slightly insidious drip that happened to a lot of people and I would observe it still happens,” she says. “I’m not sure it would be called unconscious bias back in my day – it was making all sorts of old-fashioned assumptions based on people’s life choices.” Consultants expect Britain’s finance industry to have the worst gender pay gap in the country, despite efforts to recruit more senior female executives since the financial crisis. Virgin Money boss Jayne-anne Gadhia told MPS last year that sexism was still “pervasive” across the City, while artist Grayson Perry became so frustrated with bankers’ self-denial when it came to gender diversity that he created a sculpture of a penis embossed in banknotes two years ago.
“I believe that lack of gender diversity – and diversity in general for that matter – at the top of financial services contributed to the financial crisis,” Gadhia adds. The bank, which has a gender pay gap of 38.4pc, wants to have an equal number of male and female staff by 2020.
While there has been little progress in the past decade, there is a sense that this year will be different. Jon Terry, Pwc’s payment expert, thinks the April deadline to report gender pay gap figures will force banks to make gender diversity a priority because their reputation is now at risk.
“It’s number eight on their priority list. It’s not that they don’t get the business benefit, it’s that there are other issues they consider far more important to address,” he says. “There is research coming out of your ears on the business benefit of diverse workforces. That debate, as far as I’m concerned, is over. One of the reasons why I’m such a massive supporter of gender pay reporting is that it is a reputation issue so it becomes more of a priority.”
Engineering is another sector with few women at the top. Sir Roger Carr, the chairman of the UK’S biggest employer of engineers, BAE Systems, admits that the opportunities for women across British businesses have been limited, and pay structures unfair, for far too long. “A fair reward structure has risen to the surface – there is an awareness level that wasn’t there even a year ago,” he says. “It’s not a women’s issue, it’s about getting businesses equipped with the best possible roles – the talent pool of the country will then be harvested. It is about merit first.”
Carr is among the executives to point out that more women in senior roles will also benefit men as it will allow them to take more flexible jobs.
“Equality makes things better for both sexes. It’s not just women who have responsibility for the family,” he says. “At least half the talent is female in this world. If you ignore that you do so at your peril.”
The million-dollar question is how businesses can attract more talented senior women, and where the issues stem from in the first place. Is it family commitments? An alpha-male culture? Lack of female role models? Women themselves lacking in confidence? These are the questions boardrooms across the country have been asking themselves again and again.
Amanda Blanc, the chief executive of Axa UK, says that an increasing number of businesses are trying to make it easier for parents to do school drop-offs and pick-ups, which could in time increase the number of women in charge, but there are many more complicated issues at play.
Sir Philip, who was criticised last year for suggesting that women themselves were not doing much about the issue, sticks by his observation that females tend to ask for a pay rise less than men.
“[The] whole issue of women feeling they can and should speak up is really important,” he says. “In the companies I’ve worked for this has been a fairly routine observation. They [women] don’t think that they’re qualified, men more easily will think they are. I’m not a psychologist but it is observed quite often – [there’s] more of a reluctance to wing it.”
A number of senior women also point to the importance of role models. Lady Barbara Judge, the first female chairman of the Institute of Directors and one of the UK’S leading business women, says two people inspired her career. One was her mother, a university dean until the age of 88, because she taught women that work was essential “not because you’re poor, not because you’re alone, but because you have a brain and you should use it”. The other was the boss of a Wall Street law firm.
“Most of the time I’ve felt that I’ve needed to work harder to be considered equal, and I think other women have felt that as well. But the best thing that happened to me was working for a man who was gender blind,” she says. “He wanted brains and effort. He worked very hard and trained very well. Hard work is a major component of success.”
Gadhia says Sir Richard Branson, the tycoon behind the Virgin Group, taught her the power of doing good business, finding good people, and of “saying, more often than not, ‘yes’ to new opportunities”.
Being part of the first cohort of girls to attend an all-boys school at the age of 13 also prepared her for an alphamale environment in her adult years. “I remember having to fight for my seat in most classes,” she says.
“Given my gender, size and awkwardness, I guess it’s not surprising that I was the butt of many jokes from the teenage boys, who used to hide around corners and yell at me.
“I just dug in, kept my head down, and fought back when the need arose. Probably the best lesson of all was never to give up and never to let the bullies win.”
‘At least half the talent is female in this world. If you ignore that you do so at your peril’
Carrie Gracie BBC China Editor £135,000 Carrie Gracie resigned as the BBC'S China editor last weekend over a ‘secretive and illegal pay culture’ which favoured men.
Jeremy Bowen BBC Middle East Editor
Above, actresses at the Golden Globes dressed in black to campaign for gender parity. Far left, the BBC’S Carrie Gracie, and Jeremy Bowen