LEILA EBRAHIMI: Gender equality for female leadership still a pipe dream

There is not much new to be said about gender diversity in the workplace or representation of women on boards. While we are seeing a marked increase in the communication of commitments to diversity and inclusion, disappointingly, year after year our research shows progress in SA is extremely slow, and representation of women on boards or at C-suite level remains dismal.

Covid-19 has set us back, with more pressing matters of survival and adaptation being prioritised, often at the expense of “slow-burn” issues such as diversity. But as we have predicted for a while now, these issues cannot be ignored for much longer. Real action is required, with or without the introduction of mandatory reporting, otherwise companies will find themselves losing the trust they have built, which is so important to remaining in business in this profoundly altered world in which we find ourselves.

Our research in 2021 shows that representation of females in executive director roles in the top 100 JSE-listed companies remains just below 15%. The gender pay gap remains quite stark, ranging from 27%-51% across the JSE from a market capitalisation perspective, and 21%-41% in all industries other than basic materials, which showed a slight premium for female executive directors of 4%. Clearly, representation remains a major problem, making the gender pay gap analysis difficult to unpack due to a lack of available data points for female executive pay. But the basic materials industry seems to be moving the dial on gender equality, and it is worth considering why this might be the case.

Worth noting is that the Minerals Council operates a Women in Mining initiative, intended to “enhance representation and development of women in the mining industry”, and has a clear strategy in place that includes a call for companies to deliver seven foundational measures. These include the development of gender diversity and inclusion policies, and the provision of a reporting system for gender diversity issues.

Looking at basic materials, an industrywide approach to gender diversity and inclusion has had a positive effect. However, most industries do not enjoy the support of a body such as the Minerals Council, and thus must go the distance alone. Without concerted group efforts, progress stalls. This means legislation, potentially including mandatory gender pay gap reporting, will most likely be inevitable.

However, forward-thinking organisations with strong ethical foundations should already be visibly committed to creating gender equality within their organisations and should be applying their minds to ensuring clear policies and practices are formulated —  and clearly communicated. It is imperative that female talent is nurtured and mentored, to enable them to join the ranks of leadership, and to eliminate the excuse of “lack of available experienced female talent”.

Real change can only be effected through cultural shifts, and this starts with leadership. The CEO and board carry a key responsibility to set the tone for the prioritisation of the importance of diversity within the organisation. The success of any transformation effort, including efforts to change the culture as it relates to diversity and inclusion, depends on whether and how leaders engage their culture. Understanding of the topic, buy-in from the CEO and the setting of clear goals are thus integral starting points for progress to be made.

I believe the work starts with agreeing on principles that align with the company’s values and ethics, combined with data analysis to determine the current status-quo on diversity matters. This should include an analysis of promotion, resignation and recruitment statistics, particularly at middle management and above levels to identify patterns and potential roadblocks to progress of females within the organisation. Clear signals of commitment and willingness to be held accountable should be provided, through the regular, transparent disclosure of goals and progress against goals.

Where progress is unsatisfactory, clear action plans should be identified, and disclosed so that accountability is established. Until legislation provides for sanctions, transparency can only serve as a basis for demanding answers. Thus, it follows that there must be those who ask the questions, and demand the answers thereto — and then, in the absence of legislation or industry watchdogs, others must step in to fill this void and hold organisations accountable for their lack of action with regards to diversity and inclusion efforts.

This uncomfortably echoes the problems we face with environmental, social & governance (ESG) issues; all the while that we have consumers who are willing to turn a blind eye and support organisations that do not “get it right”, responsibility to hold organisations accountable falls to a small group of investors or activists, who may have limited real influence.

Turning to practical action points — it is acknowledged that it is difficult to ensure an appropriately representative board when boardroom seats are already filled with warm bodies. Rotation of board members is important not only for diversity reasons, but to also maintain independence and fresh perspectives, thus promoting good governance. Rotation efforts need to be weighed against the need for experience and deep knowledge of a company, which is difficult with a fresh board, even more so where executive roles are filled by external hires.

I believe this can be mostly resolved through proper planning — there is no excuse for not having policies in place that provide for: detailed succession planning that ensures a pipeline for female integration into senior leadership roles; robust mentoring and sponsorship programmes aimed at current and prospective female leaders; active skills development efforts for females within the organisation; the formulation and transparent communication of goals and plans to achieve these; and transparent and regular public reporting on progress and statistics relating to diversity and inclusion.

There is a lot that can be done; and much like ESG it is no longer tolerable for a board to not adequately consider the topic of gender equality within their organisation. While the governing body cannot abdicate accountability or responsibility, the appointment of a chief diversity officer role, and a dedicated steering committee, may assist with implementing the actions I have outlined. While many companies believe this to be the domain of the human resources executive, often such individuals lack the necessary training or skill set to fully address the issue of diversity within the business.

There is a clear call to action for every executive and board member of every SA organisation to ensure there are well-thought-out goals, policies and practices in place to support their achievement. But, though cultural change needs to be led from the top, there is also a clear call to action for every employee and consumer: to hold organisations accountable to a higher set of standards as well as transparent disclosure of important matters. Only through the concerted efforts of many will we see true progress. Otherwise, we will continue to have the same conversation year after year.

• Ebrahimi is a PwC partner and co-lead for P&O Reward.