New research indicates a gap of almost three-quarters between the earnings of female and male directors within the FTSE 100, raising key questions and concerns about the gender pay gap.
A new study by New Street Consulting Group highlights that female directors within the FTSE 100 are currently earning around 73 per cent less than male directors.
Whilst the average pay for a FTSE 100 female director stands at £237,000, the research reveals that their male counterparts earn £875,900.
This discrepancy between the pay of directors has been attributed to the number of female directors holding non-executive roles as opposed to executive positions which are known to have a significantly higher level of remuneration.
As such, the research warns that women are not only being given less pay but are also being deprived of the opportunity to access higher-earning roles.
It is estimated that the large majority of female directors within the FTSE 100 (91 per cent) are in non-executive roles.
A report by the FCR highlighted that having just one woman on the board could increase stock prices by 10 per cent annually, indicating there is a real business case for improving D&I at board level.
Yet, NSCG also found that the women who do make it into executive roles are still facing a significant gap in terms of wages.
Male directors within executive positions were shown to earn around a million pounds more, with their average annual salary standing at £2.5 million whilst executive female directors’ salaries were measured at £1.5 million.
As such, the group urges companies to move beyond improving diversity and inclusion through solely focussing on the number of female directors at board level.
Instead, it suggests that women should be given more executive responsibilities and should be trained and prepared properly for taking on this senior position.
Furthermore, NSCG also calls on boards to scrutinise whether there are any barriers which prevent females from reaching the top ranks at their organisation and finding ways to mitigate these to ensure real diversity and inclusion.
Darren Hockley, Managing Director at DeltaNet International, indicated key ways businesses could improve diversity and inclusion at board level:
Despite discussions of the gender pay gap over recent years, and the introduction of gender pay gap reporting, it’s clear that FTSE 100 organisations are still not doing enough to tackle the issue. If a woman is a female board member, why is she not getting paid the same as a male counterpart in a similar role?
The fact is that unconscious bias remains, and organisations must tackle diversity and equality issues by supporting staff with training. HR must work more closely with executive teams to address equal and fair pay to stamp out social injustice.
Pay equality responsibility does not just lie with HR; it requires support from everyone in the organisation in order to be addressed. So, more executives need to step up and become an ally for their female colleagues. If they are aware of injustice, then they need to speak up and support their female colleagues to get paid what they deserve.
Monica Sharma is an English Literature graduate from the University of Warwick. As Editor for HRreview, her particular interests in HR include issues concerning diversity, employment law and wellbeing in the workplace. Alongside this, she has written for student publications in both England and Canada. Monica has also presented her academic work concerning the relationship between legal systems, sexual harassment and racism at a university conference at the University of Western Ontario, Canada.
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