David Cameron to force big companies to reveal gender pay gap

Gender pay gap news

The government is to bring forward plans to make businesses with more than 250 employees discose the gender pay gap between staff

David Cameron has announced that large firms will be forced to publish the pay difference between men and women from next year in a bid to eliminate the gender pay gap “within a generation”.

“I’m announcing a really big move: we will make every single company with 250 employees or more publish the gap between average female earnings and average male earnings,” says Cameron. “That will cast sunlight on the discrepancies and create the pressure we need for change, driving women’s wages up.”

The Institute of Directors says it shares the government’s aims to get rid of the gender pay gap, but has some concerns: “Making companies publish average pay differences could produce misleading information,” says IoD chief economist James Sproule.

“As the Office for National Statistics says, measuring pay gaps is very complex, and averages do not show whether companies are paying people different amounts for the same work.

“The long-term solution is to get more women into senior executive positions. Companies have made great progress with non-executives in the board room, the challenge now is to build a pipeline of female executive talent throughout organisations.”

In November last year, ONS figures suggested that the gender pay gap was at its narrowest since comparative records began in 1997.

The announcement comes at the same time the government says its target of getting women into at least a quarter of boardroom seats in the UK’s biggest firms by 2015 had been met.

In the latest of Director magazine Lisa Buckingham, the IoD’s senior advisor on diversity, examines how although the number of women in the boardroom is increasing, the UK needs to ensure their presence goes beyond mere tokenism.

“Although the Lord Davies report of 2011 succeeded in putting the issue of women on boards centre stage for much of corporate Britain, it is now clear that if we are to maintain the gains to date – together with the better governance which many believe flows from improved diversity, and the evidence of improved financial performance – we need to broaden the debate,” she says.

“Companies must renew their efforts to develop and nurture the pipeline of executive talent. They need to re-examine the longevity of tenure of those women who do make it to the top. And they must strive to have more than one woman on the board.”

Egalitarian countries such as the Scandinavian nations have more women on boards than nations such as the UAE, Japan and South Korea, where gender equality is less valued.

“Lord Davies very early set out his hope that boards would have two or more women, while the IoD’s Lady Judge says she always seeks to have two women at least on the board so that the dynamic really changes,” she adds.

“Corporate cultures can become more open and more organisations can, as Lloyds Banking Group, Barclays or KPMG have, publish explicit targets for improving the representation of women executives.

“The board appointments process can become less shrouded in mystery and headhunters can be more proactive in encouraging clients to consider non-traditional female appointments to the board.”

To read the full report on gender diversity by Lisa Buckingham, click here

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Hannah Baker

Hannah Baker

Hannah Baker is deputy editor at Think Publishing. Previously she worked as a features writer and sub-editor for Director magazine

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