Every year in April on their self-designated “Equal Pay Day,” women’s rights groups and their supporters gather in swarms to trumpet the same old rhetoric: Women in the workforce still earn less than their male counterparts.
The whole intent behind Equal Pay Day is to advocate for yet more laws that justify their cause, efforts that are increasingly imposing burdensome new compliance obligations onto companies.
Most concerning—from an ethics and compliance perspective—is that such policy efforts foster a “push” model. Rather than being proactively encouraged and guided on how to strategically think about their compensation programs and gender equality efforts, corporate America instead continues to be pushed.
To put the cart before the horse and then wonder why no progress has been made is foolish. Yet, we continue to hear about new and amassing legislative efforts intended to resolve the controversial and highly debated wage gap.
One recent legislative effort, for example, includes the Paycheck Fairness Act. Re-introduced in April and sponsored by Senator Barbara Milkuski (D-MD) and Representative Rosa DeLauro (D-CT), the bill would amend the Equal Pay Act of 1963 by holding employers accountable for discriminatory practices, ending the practice of pay secrecy, easing employees’ ability to challenge pay discrimination, and strengthening available remedies. The bill failed in each of the last two Congresses.
Another recent legislative effort in Congress aimed at curbing wage discrimination is the Pay Equity for All Act. Introduced by Rep. Eleanor Holmes Norton (D-DC) in September 2016, the bill would amend the Fair Labor Standards Act to prohibit employers from seeking or requiring previous wage information or salary history from job applicants. The underlying concern is that companies hire people based on their personal salary history, rather than on a set salary established for any given position upon hire.
Many economists have been challenging the validity of the wage gap for years. Because it is not feasible to come up with any concrete data to prove a claim as intangible as labor market gender inequality on a nationwide scale, women’s rights groups—championed by the National Committee on Pay Equity—continue to cite the U.S. Census Bureau’s annual earnings ratios—the median salaries of all full-time, year-round workers in the United States—as an indicator of the overall lack of progress women have made in wage parity. This year, that figure revealed that women earn 79.6 cents for every dollar men earn.
Rather than being proactively encouraged and guided on how to strategically think about their compensation programs and gender equality efforts, corporate America instead continues to be pushed.
General earnings statistics fail to tell the whole story, however; they don’t even tell half the story. Numerous legitimate factors play a role in appropriately determining employee compensation: education, seniority, personal performance, number of continuous uninterrupted years of job experience, occupation, geographic location—the list goes on. By their very nature, pay equity decisions should be determined on a case-by-case basis.
The underlying problem, however, is that too many in society still believe that gender equality—pay equity, specifically—cannot be achieved absent legislative intervention, indicating an overall lack of trust in corporate leaders to make progress toward gender parity on their own. Thus, merely legitimizing the efforts of the women’s rights groups as it concerns pay equity reform—whether in Congress or on Wall Street—still does not address the heart of the matter, which is that achieving equality in the workforce at its core is a matter of ethics, integrity, and senior-level accountability, not politics.
Many forward-looking companies already know that gender equality efforts are not just the right thing to do, but the smart thing to do on a multitude of levels. With the support of senior leadership, chief ethics and compliance officers can play a leading role in championing these efforts.
Below are just a few examples of key initiatives that other leading companies have identified and implemented in their firms for achieving gender equality:
CEOs as champions of the cause: Senior leaders who commit to gender-equality goals for the companies they lead shows that they take the matter seriously. In part, these efforts involve clear and consistent communication on gender equality goals, so that this messaging cascades down through the entire organization, as well as leading diversity initiatives.
Flaunting female talent: Having females on the senior leadership team also goes a long way toward attracting other female talent. Examples of leading companies with current female CEOs include General Motors, IBM, Patagonia, Mylan, Reynolds American, Mattel, Duke Energy, Staples, Campbell Soup, PepsiCo—the list goes on. With stakeholder pressure mounting against companies to attract more female talent, cultivating a diverse workplace also goes a long way toward improving the company’s brand image.
Mentorship and sponsorship programs: Providing qualified women with the opportunities and training they need to climb the corporate ladder is also a leading practice today. Companies like 3M, Allianz, Anthem, Aon, Dell, Deutsche Bank, Goldman Sachs, Google, and many others have all implemented initiatives to help women and other employees develop their leadership skills and broaden their network. Other programs help accelerate the progression of female senior leaders by connecting them with sponsors to help advocate for their success.
Family-friendly policies: Many organizations today provide generous parental leave programs and flexible work schedules. Law firm Arnold & Porter offers up to 18 weeks of paid maternity leave and free emergency back-up childcare, while Accenture offers up to 16 weeks of paid maternity leave for its U.S. full-time and part-time women employees and up to 40 hours of back-up child care per year. Many other organizations offer similar perks.
Metrics matter: Some companies have also begun to set their own targets for women in senior-level positions and further measure that progress throughout their business lines. Moreover, companies are increasingly being pressured to increase the number of women on their corporate boards, as well. State Street Global Advisors—the asset management business of State Street Corporation—has threatened to use proxy-voting power against companies that fail to act to increase the number of women on their boards.
Being required to select female directors to meet a quota is a whole other concerning issue. Even if there are more qualified women than man to sit on boards, it’s a bullying, detrimental approach to assume as many women as men want to fill these highly demanding, time-consuming directorship roles. Neither does it make any logical sense to embrace a gender equality initiative that essentially pits one gender against the other, where female directors—no matter how intelligent and qualified they may be—are more likely to be perceived merely as fillers.
But, again, such efforts are just another dangerous offshoot of today’s women’s rights movement. Sustained by deep pockets, close ties to Congress, and a public-relations powerhouse, women’s rights groups in an intimidating fashion are a force to be reckoned with—but that doesn’t mean we should yield to their every temper tantrum.
Rather than continuing to support the widespread, damaging falsehood perpetuated by women’s “rights” groups that females are helpless victims, it’s time to start recognizing them, instead, as the valuable players that they are. The more that senior-level leadership voluntarily leads the way in fostering the sort of powerful, intelligent, capable, and diverse leadership skills that women bring to the table, the better off we will all be.