South Africa’s boards still have a long way to go before the representation of women at senior management and executive levels is sufficient and sustainable. According to PwC’s 13th edition of the Executive directors’: Practices and remuneration trends report, boards are still lacking in gender diversity at senior levels, with year-on-year figures on female representation remaining stagnant.
The COVID-19 pandemic has highlighted and exacerbated the issue of gender inequality, and there is an acknowledgement globally that many companies lack cohesive strategies to address this matter.
Anastacia Tshesane, Transformation, Diversity & Inclusion Leader for PwC Southern Africa, says:
“We are seeing a marked increase around the communication of commitments to diversity and inclusion, but progress appears to be slow. In addition, COVID-19 has set us back, with more pressing matters of survival and adaptation being prioritised, often at the expense of what are considered to be ‘slow-burn’ issues such as diversity.
“Women’s month serves as a reminder of the urgency for closing gender imbalances in the workplace throughout South Africa. Real action is required, with or without the introduction of mandatory reporting, otherwise companies will find themselves losing the trust that is so important to remaining in business in this profoundly altered world which we find ourselves in.”
PwC’s Executive directors: Practices and remuneration trends report 2021 shows that women continue to remain a minority on boards, with less than ⅕th of the JSE executive director grouping (at c.13%). This observation is more striking at CEO level, where female representation is c.5%.
From a gender pay gap perspective, the gap is most pronounced in medium-cap companies, with a gender pay gap of 46% observed at the median and 51% at the upper quartile, with a smaller pay gap observed in small-cap companies with gaps of 27% and 30% observed respectively at the median and upper quartile.
Annually, the Global Gender Gap report highlights the evolution of gender-based gaps. The 2021 report shows that with the current rate of progress, it will take 267.6 years (2020:257 years) to close the gender gap in economic participation and opportunity. Although there has been an increase in the proportion of skilled women and wage equality (albeit at a slower pace), there is still a persistent lack of women in leadership positions. Although South Africa scored highly for the political emancipation of women – ranking 14th, it ranked 92nd in terms of economic participation and opportunity, and 131st for wage equality for similar work.
Within the reporting framework in South Africa, there is a renewed focus on transparency, trust and improved disclosure. However, very few companies make disclosures in their integrated reports that set out the gender pay gap and the steps they are taking to close the gaps. Some countries such as Norway and the UK have adopted mandatory quotas to increase the participation of women on boards.
Makhosazana Mabaso, Associate Director in PwC’s People and Organisation division adds:
“It is notable that despite discussion and debates on gender diversity and equity pay, the recent amendments to the Companies Act do not make any provision for disclosure on the gender pay gap. The amendments only introduce mandatory reporting of the income gap between the highest paid and the lowest paid employees within a company.”
What can companies do to increase female representation on boards?
The CEO, in collaboration with the board chair and the rest of the C-suite, carry a key responsibility in not only setting the tone and the culture of the organisation, but also in prioritising the importance of diversity. For any type of diversity or progress to succeed, there must be sufficient buy-in and promotion from the executive team, as well as consensus on the goals.
PwC driving diversity and inclusion through the New Equation
PwC recently unveiled The New Equation, the firm’s landmark global strategy which responds to fundamental changes in the world, including technological disruption, climate change, fractured geopolitics, and the continuing effects of the COVID-19 pandemic. The New Equation focuses on two interconnected needs that clients face in the coming years.
The first is to build trust, which has never been more important, nor more difficult as organisations need to earn trust across a wide range of topics that are important to their stakeholders. The second is to deliver sustained outcomes in an environment where competition and the risk of disruption are more intense than ever and societal expectations have never been greater.
Shirley Machaba, CEO for PwC Southern Africa, says:
“With our new strategy, we will continue to drive and encourage diversity through targeted actions such as, unconscious bias training, sponsorship and mentorship programmes, enhanced maternity/paternity benefits as well as actions aimed at enhancing gender diversity at the partner level.”