A new year always brings some hand-wringing about how little headway we've made to achieve equality in the workplace. Complicating the picture: Corporate diversity programmes are facing a backlash, particularly in the US, where a court ruling on affirmative action has reverberated through boardrooms.
Women were already starting 2024 from a position of diminished strength -- the pandemic upended progress on narrowing the gender and pay gaps. But as we leave the post-Covid world behind, this is the time to right the ship. Businesses and governments should ignore the pushback and renew their support for initiatives to achieve equal representation and remuneration for women. When half of the population still trails in wages, executive ranks, and pension savings, shunning efforts to fix workplace inequity is not an option.
Female engagement in the economy is stuck. It will take 169 years for the economic participation and opportunity gender gap to close, according to the World Economic Forum. That is worse than the 131 years to reach overall parity. Females still earn about 20% less than men globally, according to the International Labour Organization.
Three places in the Asia-Pacific region -- Japan, Australia and Hong Kong -- will be a litmus test for how committed companies are to properly address gender disparities. Executives in other regions should pay close attention -- brushing aside wage transparency mandates to narrow the pay gap, like in Australia, or investor pressure to diversify all-male boards, in Japan's case, would be disastrous. Attracting, developing and nurturing the best talent, and pushing for equity for women should by now be entrenched in any company's DNA.
Japan Boards
Despite progress in getting more women in the boardroom, Japan has some catching up to do. It has slipped to 125th place in the World Economic Forum's gender gap rankings, while females hold just under 17% of board seats at companies in the Nikkei 225 Index, according to data compiled by Bloomberg. That is roughly half of the more than 30% for the S&P 500 and well below the 40% for Europe's Stoxx 600.
Foreign investors are taking note. Institutional investors are agitating for greater diversity and setting rules to vote against firms with few or no female directors. The government is also providing a tailwind -- it will require at least one woman on the board of major companies by 2025, a first step to meet the 30% target that very few even come close to.
These are encouraging moves to dismantle one of the world's most male-dominated corporate landscapes, with the widest wage gap among Group of Seven nations. But they won't be enough as long as companies still adhere to strict cultural mores that hinder women from holding executive positions.
Japan Airlines Co. announcing its first woman president was big news for the sheer fact that it is still so rare in a country where less than 10% of companies were led by females in 2022.
Now is the perfect time for Japan to show its commitment. It is once again currying favor with international funds that have sent stocks soaring to 34-year highs, though, as my colleague Gearoid Reidy notes, it can be an unpredictable place for investors. Let's hope that even if those gains are not sustained, scrutiny of diversity will be.
Australia Closing the Gap?
The gender pay gap has been narrowing, but women still earn, on average, about A$26,000 (about 610,836 baht) less than men.
To address this, pay laggards face tougher reporting requirements. Later next month, the Workplace Gender Equality Agency will publish wage differences for every firm with more than 100 employees. Until now, only a breakdown by industry was made public.
It will take time before we know whether more rigorous pay transparency will be effective in a country where the gender pay gap in some sectors, like financial and insurance services, is in the mid to high 20% range. Overseas examples don't look good. The gap has barely budged in the UK since 2017, when businesses were first required to report the data.
But Australia could provide a template for how to get companies to improve pay equity. Businesses will need a strategy for six gender equality indicators, including wages. And the government is ramping up efforts to address women's economic equality with a task force set up in October.
As more jurisdictions enshrine detailed wage reporting, it shouldn't just be used to name and shame -- though for some companies, that may be the only way to force reforms. Greater insight into compensation practices should become a tool for meaningful change to close the gap.
Hong Kong Quotas
Can quotas boost board diversity? Hong Kong may hold the answer.
The city is spearheading a move to eliminate single-gender boards. The stock exchange has set a deadline to create more than 1,300 positions for female directors by the end of this year. Since July 2022, any company seeking to list in Hong Kong has had to have at least one director of a different gender.
Enforcing quotas tends to be controversial. But early signs suggest that, in this case, at least, they may be working. Female directorships among constituents in the benchmark Hang Seng Index are at 19%, up from about 15% in 2021.
They are definitely not a panacea, though. Having only one woman on a company board may achieve little beyond improving the optics.
Still, it's a start for places like Hong Kong, which lags behind the US and Europe on this measure. But ingrained attitudes and structural issues that prevent more women from reaching the the C-suite and sitting on boards have to change.
Corporates are rethinking strategies in a climate more antagonistic toward diversity, equity and inclusion. But while your DEI team may have been decimated, executives can still strive for a workplace that resembles the real world.
In Asia, businesses are not hampered by the anti-DEI sentiment sweeping corporate America. But there's a lot riding on this region's efforts to make boards with no women a thing of the past and equal pay a reality. ©2024 Bloomberg
Andreea Papuc is a Bloomberg Opinion editor.