CEOs kept quiet about gender equality under Covid

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Until the pandemic hit, companies became more willing to open up to the diversity of their workforce. But even those who embraced transparency were embarrassed by the subject when Covid hit. This suggests that they have something to hide when it comes to how they led staff during the health crisis.

A record 173 companies with a total market value of $ 13 trillion submitted data on their hiring practices for the latest Workforce Disclosure Initiative survey, which covers 2020. The project, led by London-based government campaigner ShareAction, collects information from large companies on behalf of 66 UCITS , including Amundi SA, JP Morgan Asset Management and Schroders Plc. These investors are expected to engage with boards to raise employment standards globally.

Part of the survey must be answered publicly. But for the most part, participating companies can choose answers to stay in the WDI investment group. And they were quick to tick that box this time, with only 65% ​​of the answers published when they got the election. For 2019, that figure was 85%. The sudden turnaround in transparency was particularly sharp when issues related to diversity and inclusion, wage levels and wage differences, and supply chain transparency.

Of course, the answers are still confidential to the investment managers in WDI, who can hold companies accountable for their answers. And ShareAction says it has collected more data than ever before, mainly due to more detailed submissions on supply chains – an area where responses have been historically poor.

But you can see why many companies wanted to keep their individual responses out of the public domain. ShareAction aggregates the results, and these showed no change in the average level of data provided on pay gaps. About 97% of respondents divided their leadership by gender, but only 39% did so by race or ethnicity. True, there is a legal ban on collecting this data in some jurisdictions, but 43 companies still have not provided any data when they could have done so.

The responses to the gender and ethnicity breakdown of internal hiring – a metric that assesses progress across the firm – were also low. And just over half of companies did not disclose the number of discrimination and harassment incidents reported by staff, while 61% would not say how many such episodes were resolved. Reporting on how human rights complaints were resolved was also weak.

In terms of the data itself, information technology companies performed particularly poorly in terms of pay inequality, with a gender pay gap of 32% and an ethnic pay gap of 59% – almost double and 2.5 times the average, respectively.

These findings add to existing evidence that the business sector as a whole placed less emphasis on workplace equality in the pandemic. But they also reinforce the value of measuring the composition of the workforce. Companies with more than 30% female representation on boards were more likely to resolve discrimination and harassment incidents than those with less e.g. And the longer a company had participated in the survey, the lower its ethnicity and gender pay gaps were on average.

Of course, 2020 was a challenging year as companies struggled with Covid. Investors should tolerate a slowdown in the expansion of disclosure and hear – if not always accept – explanations as to why social measurement within the ESG went in reverse order. The reduced disclosure is regrettable, but these companies are at least in dialogue with a large group of investors, and each year the survey includes a large number of questions that cannot be answered privately.

Yet there is a crucial difference between taking a break from disclosure and turning back time on justice in the workplace. As ShareAction says, the pandemic shed light on conspicuous inequalities across the company’s supply chain, and the often-cited mantra was “build back better.” Shareholders should continue to keep corporate feet to the fire. And they should put the greatest pressure on those companies that do not disclose labor force data at all.

This column does not necessarily reflect the opinion of the editorial staff or Bloomberg LP and its owners.

Chris Hughes is a columnist for Bloomberg Opinion covering deals. He has previously worked for Reuters Breakingviews as well as the Financial Times and the newspaper Independent.

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