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Corporate South Africa has to establish a pipeline that will channel women executives to top jobs currently occupied by ageing men who will be retiring in the next five years.
This is according to Andréas Horak, PricewaterhouseCoopers (PwC) SA people and organisation reward co-lead partner.
Horak told City Press that there are still few women in top posts in JSE-listed companies.
This followed the release of the 2022 Executive Directors Report by PwC SA last Tuesday.
The report revealed that there had been minimal progress in balancing gender representation and narrowing the pay gap in JSE-listed companies since last year.
Horak said these companies were “significantly male-dominated”, and that the average executive director in the JSE was about 54, which meant that there was a need for companies to widen their senior management pool with significant representation of women to give them enough time to grow and obtain experience.
Companies, he said, needed to prioritise this feeding system to ensure that there was more representation by women.
However, he said there had been some “green shoots” – signs of improvement – over the past two and half years as 25% of executive directors appointed in JSE-listed companies were women.
He said this trend needed to last because few companies were going to appoint CEOs with required experience in future.
Horak said:
EXCLUSION
Horak said male executives were acquiring experience of two to eight years, while women were within the one- to five-year range.
“So, automatically, people are saying we are looking for someone who has five years plus experience to fulfil the role of CEO. A lot of women fall out because the in-role experience criteria does not make them eligible to participate,” Horak said.
He said that was the reason a large pool of women executive directors was needed.
These executives would need systems in place that would make it attractive for them to stick around.
Horak said having a succession plan could help companies to identify and offer women the opportunity to also flourish in their careers.
‘GREAT RESIGNATIONS’
Unlike in the UK and the US, Horak said the phenomenon of “great resignations” was slightly different locally.
He said local talent needed to be retained to help with skills transfer, and that companies also needed to deal with the process called equal pay for equal work value.
He said there was legislative requirement for equal pay for work of equal value that was being driven from the country’s perspective.
The PwC report said there had been an increased global focus on the enactment of legislation to regulate equal pay for work of equal value.
“SA is no exception, having various regulatory and legal requirements that companies are required to comply with,” the report said.
These include:
*The Employment Equity Act;
*The King IV report on corporate governance in South Africa; and
*The revised draft of the Companies Amendment Bill.
The report said this was not only a legislative issue, but was also rooted in the social aspect of environmental, social and corporate governance, which is usually used by investors to measure the sustainability and ethical impact of an investment in a business.
The PwC report said:
While companies were increasing their efforts to pay fairly and close the gender pay gap, the report said more urgent action was needed. Horak said they posed a question about whether it was time for companies to consider auditing those outcomes and hire independent auditors, who would validate that they were equal pay compliant.
In return, he said, these companies would be labelled and certified.
“It’s easy to say you are doing it, but we want evidence.”
PROGRESSIVE POLICIES
Horak said progressive policies such as the maternity benefit had evolved in global economies and, in some countries, such policies were introduced as part of their listing requirements for companies, which would be asked to comply.
Such countries, he said, understood the importance of providing the right level of support to the men and women who were the primary caretaker of a newborn.
“So, there have been more progressive policies and processes put in place in those territories. Can we learn from that? Yes, I think we can. The Companies Act amendments that are currently being proposed look at certain specifications with regards to the lowest-paid and highest-paid employees. The top 5% versus the bottom 5%. I think there is natural progression that there will be at some point the view that the Companies Act will probably evolve to incorporate some of the legislative thinking that we saw previously.”
However, Horak warned that forcing such policies could lead to mistrust and a disconnect between the employer and employees.
“I think the pragmatic approach will be for corporate South Africa to actually embrace a more flexible policy purely for the retentive basis because it engages employees better in the process.”
‘WE ARE RESILIENT’
Horak said company boards were already talking about right processes, but more work was needed.
“Can it [progressive policies] be accelerated? Yes. It will be challenging. But, that being said, South Africans have always been able to punch significantly above their weight. Whenever everybody thinks that, ‘okay, we are going to struggle’, we sort of resurrect ourselves and we then move forward.
He said the JSE Top 40 already incorporated a lot of these principles on environmental, social and corporate governance when compared with global economies.
“I think we do have an opportunity to capitalise on this, but it will require people to have willingness to basically say we will take on this challenge and we are going prioritise it and we are going to incorporate it within our corporate strategy.”
