By Kirsty McManus, National Director, Institute of Directors (IoD) Northern Ireland
New laws on the reporting of gender pay gaps have placed increased scrutiny on larger firms, not just on disparity in levels of pay, but also the gender balance at the top of their organisations.
The recently introduced legislation requires companies that employ more than 250 people to report the difference in average salaries between male and female counterparts.
Although the lack of a Northern Ireland Executive means the laws are not enforceable locally, 22 firms based in Northern Ireland have reported the relative levels of pay between men and women within their business. Just three of those showed that female workers earned more on average than their male counterparts although a further two had no pay gap at all.
The laws are part of a wider drive to improve transparency at leading companies and already, we are seeing many large institutions committing to improve the gender balance among their top employees.
Bank of Ireland, for example, has said it wants half of its senior management team to be women by 2021. Meanwhile, the BBC has promised to deliver a “new framework” after it was revealed many men at the organisation were being paid more than women doing the same work.
If the ambitions to see more women in senior positions are to be realised, however, greater investment in professional development may also be required to provide directors with the skills to raise up new leaders within their business and to enable ambitious employees to meet the challenge of moving into leadership.
Earlier this week, a cohort of 15 business leaders in Northern Ireland became the latest to complete their Certificate in Company Direction, a qualification that will equip them with the core knowledge and awareness needed to function effectively as a director.
It is the first step towards achieving Chartered Director status which has been bestowed on more than 60 leaders in sectors across Northern Ireland and we look forward to guiding many more through the process at the recently launched IoD Academy (WATCH).
Focusing on the IoD’s Director Competency Framework, the Academy addresses so-called ‘soft skills’ by putting knowledge of finance and business strategy on the same level as the ability to encourage diverse views, communicate effectively and make decisions in the face of uncertainty.
While the benefits of undertaking professional development will of course have a tremendous impact on those receiving the training, whether individuals or groups from the same organisation, successive studies show the effects on their business as a whole can also be profound.
Research carried out by McKinsey & Co for its Global Management Matters survey found a direct correlation can be made between high competency among managers and productivity.
It found a single point improvement in management practices (which it rates on a five-point scale from ‘worst practice to best practice’) is associated with the same increase in output as a 25% increase in the labour force or a 65% increase in invested capital.
Further research presented by the Department for Business, Innovation and Skills meanwhile has illustrated the connection between strong management and leadership skills and increased productivity and vice-versa with the development of best practice management resulting in a 23 per cent increase in organisational performance.
Greater scrutiny of how companies operate and their ability to adapt to changing dynamics in the workplace, and in the economy as a whole, is to be welcomed. By providing world class professional development, the IoD aims to play a major supporting role in their efforts to raise up new leaders and provide greater diversity at the top of their organisations.