The UK government has been taking steps to deal with the gender pay gap that is prevalent across the country. The initiative from the Equality and Human Rights Commission, has obligated all public, private and voluntary organizations with more than 250 employees to publish six different figures relating to the gender pay gap. These include the mean gender pay gap in hourly pay, the mean bonus gender pay gap and the proportion of males and females receiving bonuses.
The results have shown that the national median pay gap is 18.4% and that over 80% of firms pay their men more on average than their women. Some industries were considerably worse than others, including construction, finance and the insurance sector.
A Good First Step
The creation of this national database is a first step in a plan to publicize the gender wage gap that exists in the UK and to give authorities an idea of the size of the challenge facing them. This publication of data can only go so far, however, in solving the problems of inequality in the workplace.
One of the first companies to take a significant lead on the matter has been the investment firm Legal & General Investment Management (LGIM). They have launched a fund of $65 million which “aims to empower investors to make a difference to the companies in which they invest and wider society”, by investing in companies which are making a positive impact on gender equality in the workplace.
The Girl Fund
It has been named “the Girl Fund” for short, though its full title is the L&G Future World Gender in Leadership UK Index Fund. The terms of the fund will see LGIM score companies across four gender-diversity measures including the percentage of women at board and executive level. The fund will track 350 blue chip stocks across an index and then choose to allocate funds to those firms which rank highest on the gender equality parameters. Thus, it will serve as an incentive for firms to increase the gender diversity as it will increase their share-price and see them being considered a more valuable company.
Head of Personal Investing at LGIM, Helena Morrissey, who is also one of the most senior women in the City, said gender equality was an issue which “generates so much frustration”. So, “rather than feeling trapped or despondent, let’s do something about it. I’m excited about the launch of the Girl Fund, which empowers us all to use our money to help companies to progress. When we invest in the success of women, we are investing in the success of business.”
Those who wish to take part in the Girl Fund’s investment plan can do so for as little as $40 a month, though some of the top performers on its index, such as BP, Royal Dutch Shell and British American Tobacco might not appeal to investors from other ethical standpoints. It is still a step in the right direction though and LGIM’s promise to engage with those companies which score very lowly is a promising sign of big capital using its power to effect positive social change.