Unctad report shows slow and uneven progress on gender equality in MNEs

The world’s leading multinational enterprises are improving their gender equality reporting and policies. However, large gaps remain, especially in parts of the developing world and transition economies, according to Unctad’s World Investment Report 2020. Sebastian Shehadi reports.

Globally, 70% of the world’s largest multinational enterprises (MNEs) report on gender equality. More than 80% of these MNEs report having a diversity policy. However, women’s representation remains “unequal at every level”, according to a recent report from the UN Conference on Trade and Development (Unctad).

Having more women in leadership roles creates better financial results, according to Dr Amelia Santos-Paulino, chief of Unctad’s investment research section.

“Multinationals can help advance equality,” she says. “A more gender-balanced board improves corporate governance and innovation of business perspectives. It also creates a better mix of talents and skills, and more informed decision-making and understanding of consumer preference.”

A mixed picture

Gender reporting rates vary from region to region, with developed countries leading the way. Companies in North America and Europe stand out, while those in Africa and Latin America and the Caribbean also outperform the world average, according to Unctad’s latest World Investment Report. The rest of the world, especially developing Asia, lags behind significantly.

Reporting rates are influenced by culture and local attention to gender issues; by the visibility and size of companies; by the importance of gender issues for investors and other stakeholders; and by disclosure requirements imposed by stock markets.

“This is why Africa stands out in comparison to other developing regions,” says Santos-Paulino. “Most firms are reporting on gender in countries such as South Africa, even though the continent lags behind in other institutional and development indicators. Gender issues are taken more seriously over there.”

Meanwhile, the sectors that boast the best gender reporting rates are information and communication; other service activities; arts and entertainment; pharmaceuticals; and human health and social work activities.

Conversely, the industries that perform the least well are trade; paper and paper products; basic metals and metal products; motor vehicles and other transport equipment; and construction.

“Those industries [lagging behind] are typically male-dominated work, because they require more physical force,” explains Santos-Paulino. “However, the bulk of the labour force are women in other areas of manual labour, especially in assembling for textiles and apparel, not least because women are cheaper to employ in some countries.”

On a global level, the reported share of women employees in the largest MNEs is just 17%, with 9% at a managerial level, and a larger share of 18% at the board level.

Differences between industries typically reflect the nature of their activity. For example, female voices are preferred for call centres, and historical gender roles mean that there are more women in care work, according to the Unctad report.

Regional variations are also very apparent. At the board level, women’s representation is higher in Europe, North America and Africa, all above 20%. This is largely the result of regulations.

“South Africa’s case is very interesting because the country requires gender equality in all appointed board listings with a minimum of 30%,” explains Santos-Paulino. “Also, the Black Economic Empowerment Act provides a financial incentive for companies to advance black women on to boards and in senior leadership roles. For this reason, South Africa performs very well compared with other developing countries.”

It should be noted that there has been some advancement at the board level in the top 100 MNEs, particularly in developed countries and in some developing countries, such as South Africa, as well as some progress in diversity at lower levels of the workforce. However, there is a shortfall at the middle and managerial level.

Beyond the numbers

In terms of publishing diversity policies, roughly four out of five companies around the world have done so, according to the Unctad report.

That said, there is a big difference between reporting a diversity policy and actually implementing it, says Santos-Paulino. One good implementation benchmark is the degree to which companies offer flexible working arrangements and the provision of childcare services, which tend to positively benefit women.

At a global level, the shares of companies reporting policies on flexible work and childcare are far lower than the share of those with diversity policies, suggesting that implementation of gender equality policies is weak, according to Unctad.

In this regard, European companies perform the best, followed by North America; other developed countries; developing Asia; Latin America and the Caribbean; Africa and transition economies.

The implementation of policies on flexible work and the provision of childcare are economically costly, which may explain differences across regions, says Unctad. For example, only 5% of companies in the sample from Africa have annual revenues of more than $10bn, compared with 26% in Europe.

The report shows that progress towards gender equality is moving forward, albeit at varying paces due to cultural differences on a regional level and varying industry weights.