Emerging Markets Lag On Gender Gaps, But Lead On Pay Reporting

Sustainable Development Goals and Gender Inequality in Emerging Markets

Introduction

Gender inequality remains a significant issue in companies based in emerging markets. However, new research conducted by Equileap, a provider of gender equality, diversity, and inclusion intelligence, reveals that employers in these countries are generally better at disclosing their gender pay gap compared to organizations in developed nations.

Gender Equality Score in Emerging Markets

The data compiled by Equileap shows that companies based in countries classified as emerging markets have an average gender equality score of 32%. This score is more than ten percentage points lower than the score across developed economies.

Gender Imbalance in Emerging Markets

Women are significantly outnumbered by men at all levels of organizations in emerging markets. They hold only 18% of board positions, 14% of executive team positions, 21% of senior management roles, and make up 32% of the overall workforce. Among all the companies examined in the sample size, only three have achieved gender balance, defined as having between 40% and 60% women at all four corporate levels.

Transparency on Gender Pay Gap

The research also found that transparency on the gender pay gap is comparably high in emerging markets. Approximately 38% of companies in these markets publish enumerated gender pay data, compared to just 33% of organizations in developed markets. Additionally, 14 companies in emerging markets have successfully closed their gender pay gap, as defined by Equileap as publishing a mean, unadjusted pay gap of no greater or less than 3%. In the United States, only six companies have achieved this.

A Precursor to Progress?

Gender pay gap reporting mandates and guidelines have been introduced in many countries and regions over the past decade. The United Kingdom, for example, implemented a gender pay gap reporting mandate in 2017, requiring companies with 250 or more employees to publish annual data on their gender pay gap by pay quartile.

Research by the OECD suggests that national-level pay gap reporting rules do not consistently lead to closing gender pay gaps across all countries. However, evidence indicates that transparency and reporting mandates, especially at the company level, can contribute to narrowing the gender pay gap and addressing systemic inequities. The relatively high disclosure rate across emerging markets may be a precursor to progress towards smaller pay gaps.

The results of a study from 2019 showed that companies compelled to report their gender pay gaps experienced a 7% reduction in the gap from 2003 to 2008, while control firms saw no change. This demonstrates the potential impact of transparency and reporting on closing the gender pay gap.

Importance of Transparency

Diana van Maasdijk, CEO of Equileap, emphasizes that transparency around the gender pay gap is not just about corporate disclosure or compliance but also serves as a catalyst for progress. By shedding light on compensation disparities, companies foster a culture of accountability and lay the groundwork for meaningful change. Equileap’s commitment to disclosing public information on gender equality stems from its recognition of its transformative potential.

Differences in Gender Pay Gap Disclosure

The research by Equileap found that only 13% of companies in the United States currently disclose gender pay information, while rates are as high as 65% and above in India and Taiwan. In South Korea, 88% of companies publish gender pay information without any legal obligation. Overall, eight emerging markets in the data set have a gender pay gap disclosure rate of over 50%.

Challenges and Progress in Emerging Markets

Despite the relatively high disclosure rates, Equileap’s research highlights that fewer than 1% of companies in emerging markets have explicit strategies in place to close their gender gaps. Many companies also fall short in terms of providing parental leave and flexible working policies, which are correlated with smaller pay gaps and better workplace gender equity.

Research Methodology

Equileap evaluated 1,494 publicly listed companies across emerging markets, representing approximately 43 million employees. The data was gathered from various countries, including Brazil, Chile, China, Colombia, Czechia, Egypt, Greece, Hungary, India, Indonesia, Kuwait, Malaysia, Mexico, Pakistan, Peru, Philippines, Qatar, Saudi Arabia, South Africa, South Korea, Taiwan, Thailand, Turkey, and the United Arab Emirates.

SDGs, Targets, and Indicators

1. Which SDGs are addressed or connected to the issues highlighted in the article?

• SDG 5: Gender Equality
• SDG 8: Decent Work and Economic Growth
• SDG 10: Reduced Inequalities

2. What specific targets under those SDGs can be identified based on the article’s content?

• SDG 5.5: Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic, and public life.
• SDG 8.5: By 2030, achieve full and productive employment and decent work for all women and men, including for young people and persons with disabilities, and equal pay for work of equal value.
• SDG 10.4: Adopt policies, especially fiscal, wage, and social protection policies, and progressively achieve greater equality.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

• Indicator: Gender equality score of companies based in emerging markets.
• Indicator: Percentage of women in board positions, executive teams, senior management, and overall workforces.
• Indicator: Percentage of companies publishing enumerated gender pay data.
• Indicator: Number of companies that have closed their gender pay gap.
• Indicator: Percentage of companies disclosing gender pay information.
• Indicator: Percentage of companies with explicit strategies to close gender gaps.
• Indicator: Availability of parental leave and flexible working policies.

Table: SDGs, Targets, and Indicators

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Source: forbes.com

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