This year is the 50th anniversary of the Equal Pay Act in the UK. And yet, the World Economic Forum and The Equality Trust has stated it will take another 200 years before women will achieve equal pay. It’s clear that the Equal Pay Act needs to be updated – there have been a number of high-profile cases that have shown that pay discrimination still exists. It is time to to put an end to this type of discrimination and stop it from being trivialised.

The Equality Trust examined the gender pay gap in their May 2020 report. The ten worst reporting companies within the FTSE 100 all have a gender pay gap of over 40%. In other words, for every £1 a man earns, on average a woman earns 60p. The bonus pay gaps are even higher – the ten largest bonus gaps of FTSE 100 companies was 75%. So, for every bonus a woman receives of £1,000, a man will receive in excess of £4,000.

More needs to be done around transparency in pay systems as bias still creeps in when people tend to operate on what they ‘feel’ is right, rather than use objective criteria. Discretionary pay and bonuses are another weak area that can go unchallenged, and where decisions are down to individual managers.

Compensation Committees need to ensure diversity and prevent any biases that may arise. Fairness and consistency are key, along with succession planning, and areas that a diverse compensation committee could help to navigate.

Creating equality and diversity is not only the right thing to do, it is the smart thing to do. Studies show that diversity, equality and inclusion (DEI) pays: the most gender-diverse companies outperformed the least diverse by 48%. Capturing the benefits of DEI should be a top strategic initiative for all companies.

That said, we need a greater commitment from the Government, shareholders, CEOs and executives to move us to our goal of a truly diverse workplace. Without commitment from the top, the slow pace of change will continue. Government can play a part here as a guardian of the law: there should be penalties for non-compliance – it seems that it is not enough to just name and shame these companies.

Now more than ever, businesses and business leaders need to ensure that they are inspiring the younger generations and promoting talent regardless of background in their organisations. That’s why it is so important to see role models, but more importantly, role models in their own likeness, and representing all aspects of a diverse workforce.

Companies that make the most progress are those willing to hold challenging conversations about equality and diversity and inclusion issues among the executive team, and being truly honest and transparent about where they are as a company on this journey.

The world of business is a better place when all women and men representing our diverse society are able to lead equally, be paid equally and contribute the best that they can.

This post originally appeared in The Financial Technologist – Phoenix Edition

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