Closing the gender pay gap: How boards can lead the way

Of course not. It exists across professions, whether India’s sports personalities or technology professionals. Statistics make it seem even more challenging, despite knowing that India's path to achieving a US $5 trillion economy depends on significantly boosting women's economic participation, one of the four crucial pillars of the Viksit Bharat vision.

The World Economic Forum’s Global Gender Gap Index 2024 ranks India 129th out of 146 countries, two spots lower than in 2023. India is 20.7% behind the global economic gender parity of 60.5%. The statistics mean that women in India, on average, earn Rs 39.8 for every Rs 100 earned by men.

We struggle in areas like female labour force participation, wage equality, and women's representation in leadership roles. India’s lower ranking indicates significant gaps that need urgent attention and strong policy interventions.

For years, the challenge has been that while women hold nearly half of all entry-level jobs, their presence dramatically decreases as they move up the career ladder. This is one factor not restricted to India alone; in varying degrees, especially in the corporate world, it is the same story everywhere. The higher up the ladder, the fewer the numbers.

The data from LinkedIn in 2024 also highlights significant disparities in gender representation across the global workforce. Women comprise 42% of the global workforce but only 31.7% of senior leadership positions.

The question arises: While the government pushes for policy changes and India Inc. continues implementing measures to bridge the gap, what role can boards play? Can they ensure that the organisations they govern are equal-opportunity employers in the true sense? That their women are trained and skilled to take on leadership roles?

• Develop a comprehensive DEI strategy

What approach should the boards take to make a difference? Should they update DEI metrics regularly to keep equal gender representation on track? Going beyond the BRSR report requirement to report gender ratio data, boards need to start seeking compensation data. Transparency in compensation data will highlight disparities and drive accountability. In fact, it is not far before this data becomes part of disclosure norms.

• Create and build a supportive work environment.

Boards could drive management to implement policies that genuinely support work-life balance, such as flexible work hours and hybrid work models designed not to impede career progression. The idea is to move beyond token gestures and make these policies part of the organisational culture. Focusing on an equitable parental leave policy will enable men and secondary caregivers to take time off, making it easier for them to fulfill caregiving responsibilities.

Another universal issue is women's hurdles when returning to full-time work after a break. These issues stem from workplace policies—structures are historically designed around the needs and capabilities of men, which urgently needs a cultural shift.

Deloitte’s Women at Work Report 2024 highlights that 41% of women request reduced work hours and 31% report mental health challenges.

• Ensure the ascension of women to leadership

Low numbers at leadership levels are well acknowledged. The role that boards need to play here is to encourage organisations to address the issue of many women leaving the workforce mid-career. Being more open to appointing and promoting women to leadership positions will help bridge the gender gap, inspire more women to raise their hands for bigger opportunities, and advance gender pay parity.

What may also help is if organisations could nurture a pipeline of senior women executives who lack extensive board experience but possess the potential, exposure, and adaptability to contribute effectively for board positions. A sitting fee, driven by performance and equity at the board level, would also go a long way in addressing the issue.

The road may be long and slow, but achieving gender pay equity must be an ongoing effort, not a one-time endeavour. Boards must commit to consistent and diligent efforts to drive meaningful change and create a more equitable workplace where women can thrive and reach their full potential. The time to act is now, to embrace a more inclusive future for all.