This article forms part of CAER’s ‘Responsible Investment Agenda 2018 – A Work Plan for Australian and New Zealand Investors’ Report
Looking back, 2017 will go down in history as the year of the #MeToo movement. At a time when many pundits had come to question the value of social media, a simple hashtag went a long way to demonstrating the medium’s potential for positive change.
As Hollywood grappled with the fallout of Harvey Weinstein’s serial sexual predation, it soon became clear that #MeToo was not going to stop there. Through Facebook and Twitter, #MeToo spread rapidly. Soon politicians, business people and the broader community were impacted by a growing understanding of the pervasiveness of gender-based assault and harassment.
It hasn’t just been a Western phenomenon either. In China, attempts by authorities to slow the spread of #MeToo are being circumvented using the emoticons for ‘rice’ bunny’ – which in Chinese is pronounced ‘mi tu’.[i]
A Widespread Power Imbalance
What the #MeToo campaign represents is extremely important for society. While there have been numerous sex scandals involving high-profile men over the years, #MeToo is different in that it has driven home the message that this is not just an isolated incident – that sexual harassment is happening to women at all stages of their life, at all levels of society.
#MeToo is a symptom – a symptom of the gender-based power imbalance that has pervaded our society for thousands of years. When 50% of the population stand up and say enough is enough, that can’t help but have an impact on the investment community.
The power imbalance that is the underlying fuel behind the #MeToo movement is perhaps most starkly reflected in hard statistics relating to the position of women in the workplace. While our research demonstrates great progress in terms of women on the board of company directors, that is taking a long time to filter through to some of the more on-the-ground measurements that really make a difference to women.
The Impact on Investment
Investors who are looking to take a position in response to #MeToo should also be mindful of metrics such as the number of women in executive committee roles, in positions of senior management within companies, and the percentage of female employees across the company. Employment policies around discrimination, strategies regarding gender pay equity, and the availability of family-friendly workplace arrangements are also useful indicators of how well a company is managing these risks.
A good set of policies and demonstrated results on the ground will allow an investor to tell a positive story about an investee company – and will also allow a company to maintain a position as an employer of choice, something extremely valuable in a competitive employment market. There is also compelling market research demonstrating a positive correlation between positive employment practices and company returns.
The Workplace Gender Equality Agency (WGEA) has been tasked with delivering the Australian government’s policy objectives in this area and their website is a treasure trove of useful information for investors. In Australia, non-public sector companies with 100 or more Australian employees must report under the WGEA reporting requirements that cover gender composition of the workforce and governing bodies, equal remuneration between women and men, flexible working arrangements, consultation with employees concerning issues relating to gender equality in the workplace and sex-based harassment and discrimination.
According to ABS data, the gender pay gap in Australia has hovered between 15% and 19% for the last 20 years[ii], while in New Zealand, StatsNZ has reported the gender pay gap to sit at 9.4%[iii] . This is a significant improvement from 1998, when the gender pay gap was reported at 16.3%. So long as this remains the case, we can expect the community and regulators to target workplace inequality.
The #MeToo movement has created an environment where gender issues are being discussed at a broader community level. Gender equality indices have been released to the market index series favouring companies with significant gender diversity among their boards. Investors are also utilising gender-related indicators collected by research houses, like CAER/Vigeo Eiris, and making use of this data in their investment decisions.
Investors can expect their clients to be asking more questions on this front in 2018, and to see more movements from the leaders and laggards in the corporate arena as everyone scrambles to improve their profile in the face of this emerging societal movement.
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[i] Meg Jung Zeng, The Conversation, From #meToo to #RiceBunny: how social media users are campaigning in China: <https://theconversation.com/from-metoo-to-ricebunny-how-social-media-users-are-campaigning-in-china-90860>
[ii] Workplace Gender Equality Agency, Gender Pay Gap Statistics (February 2018): <https://www.wgea.gov.au/sites/default/files/gender-pay-gap-statistics.pdf>, data sourced from Australian Bureau of Statistics (2018), Average Weekly Earnings, Nov 2017, cat. no. 6302.0: <http://www.abs.gov.au/ausstats/abs@.nsf/mf/6302.0>
[iii] New Zealand Ministry for Women website: <http://women.govt.nz/work-skills/income/gender-pay-gap>
Author: Duncan Paterson