Wanted: more major firms to fess up about their pay gaps

Every year in March, International Women’s Day rolls around, and wonderful words are written about our pledge to right the many wrongs faced by women all over the world. Every year I feel more weary, down to my bones, with all the talk and so little action.

But this year, on March 8, something potentially transformational happened. A campaign group called Mind the Gap released a list of Aotearoa New Zealand’s top private sector companies who publicly report their gender pay gaps.

It turned conventional knowledge about the difference between women and men’s earnings on its head.

For years, we have been told the pay gap has been hovering around 9 per cent, but many in the private sector already knew – just by using their eyes and ears – that 9 per cent could not possibly be accurate. Last year specialists who crunched the numbers found it was double that – 18.5 per cent nationally (and 32.7 per cent at CEO level).

This ‘‘hidden’’ percentage was unknown because companies want it to stay unknown; a big pay gap is not a good look, and who wants to voluntarily share bad news?

But as the hoary old C-suite saying goes, what gets measured gets managed (or by one definition, simply examining an activity changes the activity, by forcing you to pay attention to it).

New Zealand’s top companies, including banks, legal and accountancy firms, power companies, milk and beer producers all like us to think they are good corporate citizens. They sprinkle the word ‘‘diversity’’ liberally in their annual reports and corporate media releases. If they really want to make a difference, pay gap reporting should be a given.

They all want to attract the best talent, too – and having a large pay gap is becoming a major turn-off for job-seekers (something that will be top of mind, with so many highly-qualified Kiwis coming back from overseas at present).

Publishing this information is the starting point for tackling it, and that makes good business sense.

The nice people at Mind The Gap will have taken a nice approach – gentle persuasion rather than calling out – the old catching-moreflies-with-honey-than-vinegar lark. Which leaves open the opportunity for someone to take a closer look at who is on the register, who publishes their gender pay gap, and more importantly, who does not.

I am that person. But where to start?

First of all, a bouquet for those early adopters who did register, they deserve the snaps. Some showed what superstars they are by confirming they publish not only gender pay gaps but Ma¯ ori and Pasifika pay gaps as well – take a bow Heartland, Meridian Energy, Catapult, Sky City, KPMG, Price Waterhouse Coopers, Auckland Transport and Te Papa.

Some of those organisations have representatives on Global Women’s Champions for Change – ‘‘a group of over 80 leading CEOs and Chairs, each with a personal mission to accelerate inclusive and diverse leadership in our workplaces’’, according to its website.

When Mind The Gap’s list went live on Tuesday, 18 members of that group represented companies listed as ‘‘no’’ on the register – as in, no, we do not publish our gender pay gaps.

That seemed like an obvious place to start. It seemed to me to be disingenuous, or even hypocritical, to name yourself a ‘‘champion’’ and then not be proactively publishing this information.

So, I contacted all 18 of those companies, and I have to report some ducking and diving ensued. Several told me their executive ‘‘champions’’ had left Aotearoa up to a year ago. While this does not explain how gender pay gap reporting somehow missed the to-do list while they were here and in charge, it allows them an out.

Their smiling faces still feature on the Champions for Change website though, which if you were of a mind to be sceptical, could be counted as a kind of gender-washing (where an organisation takes the warm fuzzies inherent in their membership of a group like Champions for Change but are not walking the talk). I’m sure Global Women will update their website soon.

A couple of them were able to update the information on the registry immediately – Contact Energy, for example, jumped to it and changed their website to show a 49 per cent overall pay gap. Plainly they have some serious work to do, but good on them for being transparent.

A few told me they would be releasing the information in sustainability reports during the next year or so, rather than in annual reports (Fisher and Paykel and Stuff are two of those). This in itself is interesting and shows a trend towards a different kind of reporting in privately held or listed businesses. Until recently, governance reporting was mostly about dollars – revenue, spending, profit, strategy – but not much about the people who must implement those strategies. That’s changing and ‘‘sustainability’’ (which includes pay equality and equity) is being given more love and exposure.

Some of the excuses simply don’t wash. While law firm Minter Ellison Rudd Watts has just done its annual salary review and has promised to add the results to the registry as soon as possible, rival firm Bell Gully told me they report their figures only to their Board, because ‘‘[As] a private partnership we don’t produce a public annual report and don’t publish the results publicly’’.

Well, Minter Ellison Rudd Watts is a partnership, and they’re doing it. KPMG and PwC are ‘‘big-four’’ accountancy firms, also run by partners in a similar corporate structure, and they’re doing it in spades. Perhaps Bell Gully could ask those professional services companies for some advice.

Many of the non-publishers were quick to tell me they do collect the information (but do not publish it), and I guess we’ll just have to take their word for it.

I haven’t included the names of all 18 companies here because you can pop over to the Mind The Gap registry and have a look for yourself (you could also decide to use only those companies with a ‘‘yes’’ beside their names for your power, phone and other life essentials).

The results are eye-opening; there are pay gaps of 30, 40 and up to 50 percent. Those that use the more accurate median, rather than average salary figures to make their calculations, will likely be showing higher gaps. Although that’s uncomfortable for them, they should be congratulated for being properly transparent.

In the corporate world, good news is always easy to share. Being comfortable enough to share the not-so-good news is a big ask, as former Westpac CEO David McLean found in 2019.

Thanks to McLean, Westpac became the first business to report its gender pay gap in full, using the best practice methodology, and McLean was rightly shocked by the numbers.

That took courage from McLean – it must have felt like standing naked on-stage in a show where he was the only performer – but it earned him great respect.

So, what should happen now? Mind The Gap is keen to hear from any organisation wanting to jump aboard the registry, but MTG’s Jo Cribb insists legislation is also needed, to standardise the data collection methodology, and make pay gap reporting mandatory for all businesses with more than 50 employees. A grace period of a couple of years could be built in to allow those lagging to catch up.

Fifty organisations are now on the Mind The Gap registry as a ‘‘yes’’ for publishing gender pay gap information. Most of them now need to do the ma¯ hi for Ma¯ ori and Pasifika gaps. But here’s hoping that the next 50 sign-ups will look more like a stampede of good-doings, and less like pulling teeth.

New Zealand’s top companies... sprinkle the word ‘‘diversity’’ liberally in their annual reports and corporate media releases. If they really want to make a difference, pay gap reporting should be a given.