Closing The Gap

GM, Bank of America and Johnson & Johnson earn top scores in new study of corporate gender equality

General Motors CEO Mary Barra speaks to the news media June 12, 2018 in Detroit, Michigan.
Bill Pugliano | Getty Images

You can't fix what you don't measure — so the saying goes — and a new study by Equileap crunches the numbers on gender equality at America's biggest companies.

General Motors, Bank of America and Johnson & Johnson were awarded top marks across 19 criteria, including gender balance in the workforce (senior management and the board), as well as pay equity, parental leave and non-discriminatory hiring practices.

For investors and consumers looking for companies working to close the gender gap, the new ranking provides some guidance, Equileap CEO and co-founder Diana van Maasdijk tells CNBC Make It. "I hope that they will use this information to make the right choices [about] the companies that they should be looking at."

Equileap is a non-profit that tracks corporate gender equality. It published a global gender equality report and ranking in October, but this is the first time the organization has looked specifically at America's biggest companies by focusing on the S&P 100. The report was commissioned by the Tara Health Foundation and funded by The Educational Foundation of America and The Grove Foundation.

General Motors was awarded a B+ and received the top score of 71 percent. The automaker, which recently appointed CFO Dhivya Suryadevara to join CEO Mary Barra in the C-suite, is the only company with a pay gap between men and women of less than 3 percent.

The company has looked at the average pay women receive at different levels — from the factory floor to the C-suite —and has reached pay parity both in terms of paying men and women in comparable positions equally, and also when it comes to the average salaries of men and women at the company. Van Maasdijk calls the company's efforts "exceptional."

The 15 best-paying jobs for women in 2018
The 15 best-paying jobs for women in 2018

GM is one of four firms in the index with a gender-balanced board (the others are Starbucks, Wells Fargo and ConocoPhillips). It also scored top marks for offering employees flexible options in terms of when and where they work, something studies suggest more companies should consider to help end the disparity between men and women at work.

Bank of America and Johnson & Johnson each scored 68 percent, earning a B+ grade. At both companies, women are well represented in in the C-suite — Bank of America has five women on its leadership team while J&J has three — and in senior management.

"That's important, because that's where we see if there's a glass ceiling or not," says van Maasdijk. "Bank of America is doing quite well when you look at the senior managers, and that is one of the areas where we don't see enough transparency."

Both firms have outlined a strategy to close the gender pay gap and offer paid parental leave. The study found that U.S. companies, in general, are offering less paid maternity leave than the global International Labor Organization standard of 14 weeks, but more paid parental leave to fathers than the standard two weeks.

"We are looking for companies that are offering paid parental leave to both mothers and fathers," says van Maasdijk. "Many of the companies that are reaching the top of our ranking are doing just that."

Bank of of America and Johnson & Johnson each offer flex-time and work from home options, have implemented policies to promote gender equality and offer options for out of network maternal healthcare. Johnson & Johnson, in particular, extends a comprehensive health care package to employees working less than 20 hours a week.

"That is unusual and it's extremely important because in the U.S. there are more than 30 million part-time employees. Most of them are women, so you want these women also to have access to health care," says van Maasdijk.

Equileap studied two additional criteria for a separate ranking: Health coverage for all employees, including those who work part-time, and access to family planning services and maternal healthcare. Americans are reliant on employers for those benefits, which are seen as essential to achieving gender equality in the workplace, so the health plan employers offered was given a 20 percent weight.

Factoring in employees health options, the top score of 68 percent was achieved by Citigroup, followed closely by General Motors, Bank of America, Johnson & Johnson, and JPMorgan Chase. The lack of gender equality on Wall Street has been an area of intense scrutiny, and the finance world has taken note, says van Maasdijk.

"This has been a sector that has been under fire for a long time for being an old boys network," she says. "I think that that critique from society has worked, and that many of these companies are putting the right policies in place and being transparent."

Citigroup's health plan offers a few rare provisions, according to van Maasdijk, including unconditional abortion and contraceptive coverage for men. It also stands out for offering above average parental leave benefits, as well as options for out of network maternal healthcare. The bank is one of seven companies in the S&P 100 group studied which is a signatory of the Women Empowerment Principles of the United Nations, a pact among businesses across the globe to take action to empower women.

The best companies for women when it comes to both health plans and parental leave may well be in Silicon Valley. The tech sector as a whole offers the best health care plans and parental leave, the study found.

In fact, four of the six companies that offer the highest levels of paid parental leave (at least 20 weeks for primary carers) are in tech: Nvidia, IBM, Intel and Microsoft. The other two are Alphabet and American Express. As a group, the tech sector scores well across the board, but one thing that helped boost its scores is that most tech companies now have anti-sexual harassment policies in place, the so-called "#MeToo effect."

At the bottom of the combined gender equity and healthcare list was Berkshire Hathaway, closely followed by Costco and 21st Century Fox. This is because they either do not have the right policies in place to achieve gender parity or because they are not being transparent about their data.

"If the company is not publishing and is not being transparent about this, they could very well be doing fine but they will end at the bottom of the ranking," says van Maasdijk. "They need to be transparent with that data they need to be more gender balanced and have the right policies in place to create a culture of inclusion."

Equileap's researchers found that 71 percent of companies have sexual harassment prevention policies, but singled out 21st Century Fox and Ford for triggering "alarm bells."

In November 2017, 21st Century Fox reached a $90 million settlement of shareholder claims associated with a sexual harassment scandal at Fox News Channel, and in May 2018 paid $10 million to settle multiple cases alleging gender and race discrimination by current and former employees. In August 2017, Ford — which has fielded several allegations of sexual harassment over the past decades — reached a $10 million settlement for sexual and racial harassment at two Chicago plants.

"The first thing that I hope is that every CEO on that list will look at their grades and will talk to their execs and ask them, 'Why are we getting this grade, what do we need to to improve?" says van Maasdijk.

She says there is room for improvement across the board. The average score was 45 percent (grade C-) — well below the average 53 percent (grade C+) scored by companies ranked in Equileap's Global Gender Equality Report and Ranking of the world's 200 largest companies.

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