More women now on corporate boards but not in top management, pay gap worries remain: IIMA study

A significant study by the Indian Institute of Management Ahmedabad (IIMA) has revealed some worrying aspects of gender imbalance that continue to persist in the Indian corporate world. That this has happened despite greater recognition within India Inc., on the need to correct this and to let merit and not gender matter is worrying indeed. 

Here are some of the key findings: 

• The gender pay gap widens as women advance in their careers. Every step up in responsibility increases the pay gap for women.
• The percentage of women in top management and senior executive positions is significantly lower than the percentage of women on the board of directors.
• At the top-level, the number of Women Directors have increased from 4.5 per cent in 2014 to around 16 per cent in 2020 due to regulatory requirements. (Source: IIAS)
• On an average, women senior executives earn INR 85 for every INR 100 that men senior executives earn.
• Average compensation paid to women senior executives is INR 1.91 crore and average compensation paid to men senior executives is INR 2.24 crore.
• Major companies that have high women in top management roles include HUL, Kotak Mahindra Bank, HDFC Bank, ICICI Bank, L&T Infotech.
• An increase in the percentage of women at the board has not yet resulted in a significant increase in the percentage of women at the top management level.

Some of the other pointers from the study that also need attention include:

• Women’s participation in the workforce in India is 20 per cent as against the US at 55 per cent and China at 60 per cent for 2019 (World Bank, 2019)
• The economic impact of achieving gender equality in India is estimated to be US$700 billion of added GDP by 2025 (FICCI, 2019).

The study is titled ‘The Glass Ceiling: Research Report on Leadership Gender Balance in NSE 200 Companies.’ It was undertaken by Professor Promila Agarwal, Associate Professor, Human Resource Management, IIMA. The study has been put together with data from across 109 NSE 200 companies in the last financial year and involving as many as 4146 senior executives. It was undertaken with two key objectives of improving gender balance amongst top management and senior executives in Indian companies as well as helping to accelerate career progression of women in senior management. 

Coinciding with the release of the findings of the study, an online fireside chat with Ms Indra Nooyi, Former PepsiCo CEO was organised for students of the IIMA. Here, she has been quoted as saying that companies should take an ‘all talent on equal pay’ approach. She suggested that organisations could achieve this by taking measures to put in place a critical mass of women leaders who could set the precedent and inspire other women. “Another most important thing is that men in power have to be educated. Men in society have to be educated not to discriminate against women,” she added.

Speaking to Financial Express Online, Professor Promila Agarwal said, “the widening pay gap was certainly an important finding and the fact that women representation in senior management roles is very low and therefore companies need to design ways to correct this. However, the good point is that the companies seem open to this.” The period studied, she said, was the last financial year (2020-21) from data gathered from the NSE 200 firms. 

The study had put the reasons behind the persisting gender imbalance challenges into four buckets – family, organisation, self and society. In family it is aspects like choices of career versus marriage, being a primary caregiver; in the organisation component, there were the aspects like discrimination and attitudes; what could be attributed to ‘self’ are self-limiting behaviours; and finally as for society, it is about ‘gender stereotypes and discrimination.’