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Helena Morrissey: Many firms will have to 'go backwards to go forwards' to close the gender pay gap

While many companies claim to have made great strides with their diversity and inclusion efforts, narrowing the gender pay gap remains a largely unfinished task.

The gender pay gap widened in favour of men at almost half of the UK’s biggest firms in 2018. The overall median pay gap figure in favour of men barely budged — from 9.7% in 2017 to 9.6% in 2018.

Speaking on Yahoo Finance UK’s Global Change Agents with Lianna Brinded show, diversity campaigner and Legal & General head of personal investing Dame Helena Morrissey said she was “disappointed” when looking through the recently published 2018 gender pay gap reports.

Disclosure rules came into effect in 2017 that require UK companies with more than 250 employees to publish their gender pay gap statistics.

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Watch the full Dame Helena Morrissey interview here.

Morrissey called on companies to be “much more forthright and upfront about how they are going to close [their gender pay gaps] over longer periods.”

“One needs a strategy, not just a ‘oh this year we’re going to have a women’s initiative,’” Morrissey said. “You definitely need to have a proper action plan that’s meaningful.”

Legal & General Head of Personal Investing Dame Helena Morrissey appeared on Yahoo Finance UK's Global Change Agents with Lianna Brinded
Legal & General head of personal investing Dame Helena Morrissey appeared on Yahoo Finance UK's Global Change Agents with Lianna Brinded

‘Go backwards to go forwards’

Morrissey — who is also the founder of The 30% Club campaign, which aims to improve gender parity on company boards — added, “Many companies acknowledge, privately, that they will probably have to go backwards to go forwards.”

The difference in median hourly pay between men and women at Morrissey’s own firm, Legal & General Investment Management, rose to 22.8% in 2018 from 21.4% a year earlier. Its bonus pay gap also rose to 58.3% from 55.2%.

Morrissey said that the asset management industry has wider gender equality issues, which can make it harder to attract women to work in the sector. A 2018 study from the New Financial social enterprise found only 4% of UK fund assets are exclusively managed by women.

“[Companies] need to say, ‘This is our trajectory of our pay gap. It’s going to get wider and this is when it’s going to close, and we are going to do the following: We are going to track it and we are going to absolutely make sure that as well as recruiting women, then that there are these interventions we can make about promotion and obviously then pay rises,’” Morrissey said.

Global Change Agents with Lianna Brinded explores the stories of some of the most inspirational women across business, tech, and academia. Catch up on all the latest episodes here.