Increasing transparency around the gender pay gap a good thing

The Institute of Directors has welcomed an announcement that the Government plans to require companies to report on their gender pay gaps.

“We support increasing transparency around pay equity and are looking forward to seeing more detail of the proposals,” says IoD Chief Executive Officer Kirsten Patterson.

“Many boards have already chosen to publicly report the pay gaps in their organisations,” Patterson says.

“A mandatory regime would help to ensure the information that is reported is comparable and enhance transparency around pay. Without transparency, it is very difficult to understand what is happening in the business community and in the governance community, with regards to pay equity.”

Australia has already introduced compulsory reporting for businesses with more than 100 employees and international research shows a relationship between pay gap reporting regulations and a reduction in pay gaps, Patterson says.

There are also gender pay gap reporting requirements in the UK and Canada, and New Zealand can learn from those examples, she says.

“We don’t want to see the compliance burden raised on New Zealand businesses and we don’t want to see new regulations passed that do not have a positive impact. But moves to increase transparency can only help directors understand the gender pay gap and make informed decisions in their own organisations.”

See an expert panel discuss the complexities and opportunities in gender pay gap reporting in this webinar.