The following is based on a conversation with Melissa Means, managing director in the Boston office of Pearl Meyer.
Q. Gender-based pay parity is a hot topic of late. Are directors asking about this issue?
A: To some degree, but the question is not as common as it should be. Just asking management “Have we looked at this yet?” is an easy place to start. It’s no longer just about the CEO and their direct reports, it’s an organization-wide endeavor.
Q. Why do you think more aren’t talking about this?
A: I think there is reticence because some may feel that asking the question implies there’s a problem. The fact is, it’s really just good governance. In our environment of heightened awareness around this issue—and others like the “#metoo” movement—we will begin to see more boards thinking about this in the context of company culture, fiduciary duty, risk mitigation, and corporate reputation.
Q. How do you advise boards to begin the dialog with management?
A: Historically, gender pay parity hasn’t risen to the board level. HR has been in charge internally if and when there was a concern. Consider putting this topic on the next committee meeting agenda and ask the management team and HR the following questions: Have we taken a look at it and do we have any issues? Have we had problems in the past, and if so, how were they addressed? Do we have a game plan for incorporating this into our compensation and talent management structures? And be sure to ask if they’re starting to think about the coming reporting requirements, which are regulation now in the UK. Some states are beginning to talk about similar laws, even though it’s not yet at the federal level. The preparation will take some time and it’s best to get ahead.
