The growing attention being paid to gender quality and the reinforcement of the number of women in management positions have become key socio-economic issues that are attracting increasing investor interest.

According to recent McKinsey studies, companies that commit to diversifying their management obtain better financial performances.

The most diversified companies are better positioned to attract the best talent and boost employee satisfaction and decision-making, leading to a virtuous cycle of growing returns. Companies in the top quartile in terms of gender diversify consequently have a greater likelihood of recording financial returns above the median in their respective national business sector (chart 1, source: McKinsey).

The company’s image will also be affected by its management of gender equality. The reputational risk is high, with the number of controversies linked to gender inequality having been multiplied by 6x in three years (chart 2, source: Reprisk).

Companies are therefore increasingly integrating these social questions into their roadmaps, with diversity objectives reinforced notably as concerns greater representation of women at all levels and the reduction in the pay gap between sexes. The 2021 Equileap annual world report¹ concerning gender equality nevertheless notes that even if the majority of groups have adopted anti-harassment policies, none has truly erased the pay gap between men and women and only ten companies² among those examined are reaching gender equality at all levels (board of directors, management, senior executives and employees).

The creation of indices and quotas is enhancing the position of women within companies. However, despite sanctions, results vary.

According to the latest results of the professional gender equality index³, 98% of companies have room for improvement (above all in terms of pay increases following return from maternity leave and the presence of women among the ten highest remuneration packages) and only a quarter of companies have at least four women among their Top 10 of remuneration packages.

In France, the Copé-Zimmermann law requiring at least 40% women on boards of directors has been successful, with women currently making up 45.8% of board members compared to only 12.5% in 2010 (prior to the law taking effect). The High Council for Gender Equality is calling for this measure to be extended to executive and management committees. At present, women make up only 22% of members of executive committees at French companies included in the SBF120 index.

France is not the only country addressing the question of executive committee quotas. Last November, the German government imposed a mandatory quota for executive committees of listed companies requiring that executive boards include a woman as soon as they have three members. The only exception is the United Kingdom, with women making up 36.2% of the boards of directors without a mandatory quota system.

The conclusion is clear: strong legislation leads to better gender equality within companies.

According to a new study from the World Economic Forum⁴, the Covid-19 pandemic will delay progress in reaching gender equality by one generation. Nevertheless, with favourable regulations and the commitment of all the stakeholders, gender equality has become a priority for companies and the recognition of its importance can only rise.

¹ The fourth annual world report regarding gender equality in 2021 lists the top 100 companies with the best results ranging from pay equality and the representation of women on all levels of the company to paid parental leave and policies to fight sexual harassment. 19 different criteria were used by Equileap in order to rank 3,702 companies on 23 markets.
² The ten companies ranked by the Equileap study are Groupe AIB, Air New Zealand, Assura, Coty, DNB, Gecina, Mercialys, Hang Seng Bank, Klovern and Wallenstamp.
³ The professional gender equality index (also referred to as the Index Egapro or Index Égalité) is a barometer of gender-based discrimination. For the last year (two years for the largest companies), companies with more than 50 employees have been obliged to calculate and publish (on 1 March) their rating (on a scale of 100) in terms of gender equality.
Four to five indicators are taken into account, with each contributing a certain number of points: pay gap, differences in individual pay increases and promotions (in companies with over 250 employees), percentage of female employees receiving pay increases on return from maternity leave and, finally, equality among the ten highest paid employees.
⁴ Global Gender Gap Report 2021, report published 30 March 2021.

How gender equality has become a major topic in the “S” of ESG

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