2018 09 23 business today

And it is an issue in India as well, though most of the senior women leaders we talked to wanted to speak off-the-record.. Of course, do not miss the profiles of the fascinating women le

The Gender Pay Gap

HERE ARE numerous studies which show that having more

women in the workplaces is good for business – not because it

is the politically correct thing to do in today’s era, but because it

is better for the bottom line Two years ago, a study by EY and

Peterson Institute of the US, looking at 21,000 companies in 91

countries, showed that companies with more women in their

leadership teams had better bottom lines Two McKinsey reports –

one in 2015 “Why Diversity Matters” and another in 2018 “Delivering

Through Diversity” – came to similar conclusions Companies with a

higher number of women in top management ranks were more likely to

outperform those with lower gender diversity in top rungs And these are not the only ones – there have been multiple other studies, both sector-specific as well as country-specific, which have reinforced the findings

But even while companies and governments are trying to improve gender diversity at all levels – through both HR policies and government policies – another issue is cropping up

This is about gender pay parity – or rather disparity – at all levels in the organisations It has become a bit of a cause célèbre in both the US and the

UK Several high-profile cases have been fought and are being fought over gender pay discrimination

And it is an issue in India as well, though most of the senior women

leaders we talked to wanted to speak off-the-record But they pointed

out that in many cases, there is both conscious and unconscious bias

that comes into play, especially against women who have just married or

have just had children and are coming back from maternity leave

Sometimes, well intentioned laws play their own role For example,

the law on six months maternity leave often means that women coming

back after child birth get assessed for only six months, while their male

colleagues are assessed for the full year

Our cover story in this year’s Most Powerful Women special issue

takes a close look at the problem and the possible solutions Another

article looks at the problems that women entrepreneurs face,

which their male counterparts do not have to deal with, when

starting up a company

Of course, do not miss the profiles of the fascinating women leaders

who make up our list of 30 Most Powerful Women in business and

economics this year And also the 16 women who have won our social

impact awards for their work at the grassroots level

Senior Editors: P.B Jayakumar, Nevin John,

Goutam Das, Ajita Shashidhar, Joe C Mathew,

E Kumar Sharma, Anilesh Mahajan

Senior Associate Editors: Dipak Mondal,

Manu Kaushik, Sumant Banerji

Associate Editor: Nidhi Singal Assistant Editor: Sonal Khetarpal RESEARCH

Principal Research Analyst: Niti Kiran COPY DESK

Senior Editors: Mahesh Jagota Associate Editor: Sanghamitra Mandal Chief Copy Editor: Gadadhar Padhy Senior Sub Editor: Devika Singh Copy Editor: Aprajita Sharma PHOTOGRAPHY

Photo Editor: Reuben Singh Deputy Chief Photographer: Shekhar Ghosh Principal Photographer: Rachit Goswami Senior Photo Researcher: Sudhansh Sharma ART

Assistant Creative Editor: Safia Zahid Deputy Art Director: Amit Sharma Associate Art Director : Ajay Thakuri Chief Designer: Raj Verma Designer: Rajesh Singh Adhikari PRODUCTION

Chief of Production: Harish Aggarwal Senior Production Coordinators: Narendra Singh,

Rajesh Verma

LIBRARY Assistant Librarian: Satbir Singh Publishing Director: Manoj Sharma Associate Publisher (Impact): Anil Fernandes IMPACT TEAM

Senior General Manager: Jitendra Lad (West) General Managers: Upendra Singh (Bangalore)

Kaushiky Gangulie (East)

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Newsstand Sales: D.V.S Rama Rao, Chief General Manager;

Deepak Bhatt, General Manager (National Sales); Vipin Bagga, Deputy General Manager (Operations); Rajeev Gandhi, Regional Sales Manager (North)

Vol 27, No 19, for the fortnight September 10-23, 2018

Released on September 10, 2018

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Printed & published by Manoj Sharma on behalf of Living Media India Limited Printed at Thomson Press India Limited, 18-35, Milestone, Delhi-Mathura Road, Faridabad-121007, (Haryana) Published at K-9, Connaught Circus, New Delhi-110 001 Editor: Prosenjit Datta  Business Today does not take responsibility for returning unsolicited publication material.

All disputes are subject to the exclusive jurisdiction of competent courts and forums in Delhi / New Delhi only

Jyotsna Suri Lakshmi Venu Nadia Chauhan Neeru Chadha Nisaba Godrej Pallavi S Shrof Prathiba M Singh Priya Nair

Radha Chouhan Rekha Menon

RM Vishakha Shobana Kamineni Shweta Jalan Usha Sangwan Vanaja Sarna Vani Kola Vibha Padalkar Zarin Daruwala

Aditi Gupta Anuradha Kapoor Latika Thukral Noorjehan Safia Niaz Phoolbasan Bai Yadav Praseeda Kunam Prukalpa Sankar Rani Bang Ratnaboli Ray Rukmini Banerji Sabarmatee Shayara Bano Suhani Mohan Sumita Ghose Surga Thilakan Vijayalakshmi Das

WOMEN

IN BUSINESS

Wages of Inequality

T H E M O S T P O W E R F U L W O M E N I N B U S I N E S S

THE PAY GAP BETWEEN FEMALE AND MALE EMPLOYEES NOT ONLY EXISTS BUT ALSO INCREASES AS THEY ADVANCE IN THEIR CAREERS

WHAT CAN BE DONE TO REVERSE THE TREND?

THE BREAKOUT ZONE >

STAY CONNECTED WITH US ONwww.facebook.com/BusinessToday@BT_India

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or “Advertorial” in Business Today This is no different from an

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in its creation in any way

businesstoday.in/ aadhaar-face.authentication

In Defence of Mutual Fund AMCs

Why SEBI Chief Ajay Tyagi is not right in harping

on the need for more competition in the mutual fund business

raises many eyebrows.

businesstoday.in/ independent.directors-payments

JSW, Tata in Race to Become Steel Bellwether

Reports say that both JSW and Tata look to submit bids for Usha Martin's 1 MT steel unit

businesstoday.in/ keralaflood-losses

THE

HUB >

Wearables, especially watches, are all about fitness Now, Google wants to throw in a special assistant

WEAR YOUR COACH

126

DEMONETISATION EFFECT

SMEs hit hard, India still remains a cash economy.

THE RESERVE BANK of India

annual report says that 99.3 per

cent of the high value notes that

were demonetised have come back

It also says that people have started

keeping their savings in cash again Meanwhile,

the introduction of new currency notes, with the

much touted security features, has not stopped

the production and circulation of fake currency

Other reports on the RBI website show that

Small and Medium Enterprises (SMEs) were

hit pretty hard because of demonetisation when

it came to getting credit (A Mint Street Memo

on the RBI site says that demonetisation hit an

already decelerating credit growth to MSMEs)

The other stated objectives of demonetisation

from reducing corruption to becoming a less

cash economy – have only been partial successes

And whether the government economists and

ministers agree or not, the growth in GDP

fell quite sharply post demonetisation (Some

economists still defend demonetisation saying

that it cannot be proved that growth fell because

of demonetisation, though they have failed

to give explanations on what else caused the

growth to fall) The loss in productivity, the

cost of printing new notes and recalibrating the

ATMs were not insignificant either leaving aside

the loss of lives and human suffering it caused

The sole benefit of demonetisation is probably

the rise in direct tax compliance, though whether

SMEs HIT HARD, INDIA STILL A

@prosaicview

Rewarding Haircut

RUPEE

RCOM

RELIANCE COMMUNICATION is racing

against time to conclude the deal

with Reliance Jio to sell its wireless

business, towers, fibre and media

nodes, for about `18,000 crore Jio

is expected to take on over `7,000

crore of RCom’s deferred spectrum

liability debt After the Jio deal, RCom

will sell its remaining 66 units of

spec-trum (valued at around `3,700 crore),

and is likely to make another `10,000

crore by selling real estate Efectively

RCom will reduce its current `46,000

crore debt to `7,300 crore of debt

on paper; The estimated net worth of RCom’s remaining business is close to

`7,000 crore.

Last year RCom’s debt-structuring deal with lenders involved banks converting `7,000 crore worth of debt into 51 per cent equity in RCom

Though this would have left RCom’s books with lower debt, - `4,000 crore – lenders are definitely better of with this approach At least they don’t have

to pay `7,000 crore for 51 per cent

of a business that is valued at only

`7,000 crore – Manu Kaushik

THERE IS NO

RE-SPITEfor the Rupee as

it breaches the 70 mark

against the US dollar

There are estimates

of the Rupee

remain-ing at the 69 to 70

level because of weaker

external parameters;

the trade deficit is a big

worry because of oil

imports The current

account deficit (CAD)

is expected to touch

2.8 per cent GDP in

2018/19, which was

less than 1 per cent two

years ago The rising

interest rates in US and later in the Euro zone will bring more trouble for rupee With infla-tion above the comfort zone, there are expecta-tions of an interest rate hike to provide some cushion The RBI is already following a calibrated approach by intervening in the forex market to reduce high volatility The long-term outlook for the Rupee, however, doesn’t appear encouraging – Anand Adhikari

BACK ON THE CHOPPING BLOCK

12I BUSINESS TODAY I September 23 I 2018

THIRTY-FOUR STRESSED power sector accounts that defaulted on `1.5 lakh crore worth of dues are now before the National Company Law Tribunal – yet again They were given a 180-day dead- line to settle their debts but failed.

Lender banks are pected to take a haircut and write-of these ‘bad loans’ – 18

ex-of which had already been referred to the NCLT earlier The remaining, including Ind- Barath Energy (Utkal), Lanco Anpara, Jindal India Thermal Power and others will be at the bankruptcy tribunal within two weeks.

RBI has refused any relief

on the deadline to avoid setting a precedent even as SBI – the lead lender to nearly eight power plants is hoping for resolution, and has been given a fortnight to appoint a legal team for the NCLT pro- ceedings – Anilesh S Mahajan

NO RESPITE

INDO-US TIES

TRANSPARENT

ENFORCEMENT NEEDED

ALL PATIENTS WHO

got a faulty hip implant

(eight years ago), sold

by a Johnson &

John-son subsidiary must be

compensated, said a

February 2018 report by

an expert committee of

the Ministry of Health

and Family Welfare.

Seven months after the

report, five of the victims

have written to the try seeking the details of the recommendations

minis-Patient advocacy groups have been demanding that the government make the report public

to avoid any scope for subsequent alterations

in the tions.

recommenda-Two things are clear

In-dia does not have proper electronic, traceable health records or a reg- istry of patients We fail

to enforce time-bound penalties on wrong do- ers For a robust health- care ecosystem, both ingredients are crucial

It is time to make India’s digital drive more pur- poseful – Joe C Mathew

COMPLEXITIES RELATING to Iran

will stay contentious As New Delhi

is finalises its agenda for the first 2 +

2 dialogue between India’s Foreign

Minister and Defence Minister with

their American counterparts, officials

are looking for a window allowing

India to reduce Iranian oil imports to

last years numbers

US Sanctions require India to cut all

supply from Iran by November 4; but

it is difficult to replace oil from Iran

–the second largest supplier after

Iraq—roughly 457,000 barrels a day

in Q1 FY 2018/19, with a peak in May

of 771,000 barrels a day imports

After doubling (Q-Q) from Q1 FY 2017/18 imports of 279,000 bar-rels, India started cutting imports by 66,000 barrels

Saudi Arabia in a bid to regain its market share lost to Iran (when the latter offered steeper discounts), has offered to ramp up production But Iran is critical to New Delhi’s larger strategy in the sub-continent to counter China For now, it’s wait and watch –Anilesh S Mahajan.

HERE COME THE

FLYING ROBOTS

DRONES

THE IRAN EQUATION

IN DECEMBER this year, drones will begin flying across Indian skies for surveys, photog- raphy, and mapping The government has announced its first ever policy cover- ing unmanned aerial vehicles.

Initially there’ll

be no food or commerce deliveries allowed The first phase

e-in December will only allow drones flown within the operator’s vi- sual line of sight, in the daytime and up to 400 feet altitude Detailed guidelines have been issued about who can seek the mandatory licences and how Au- tonomous drones and/

or beyond visual line of sight will be dealt with

in the second phase The Indian ap- proach to the drone policy is similar to other major drone markets such as China or the

US The drone tem is constantly evolv- ing, and digital majors such as Amazon and Google are gearing up

ecosys-to use flying robots, globally.

From a blanket ban in 2014, the Indian government has finally joined the bandwagon

to realise the potential

of drones.

– Manu Kaushik

14I BUSINESS TODAY I September 23 I 2018

GAIL UNBUNDLED

PNG

INDIA’S GASmonopoly GAIL, is set to

restructure operations and become a

pure infrastructure provider It opened

its Natural Gas Pipeline Open Access

System governing the 11,400-kilometre

pipeline network to private gas

market-ing companies This strengthens the

marketing business of the company,

along with freer movement of gas

Almost two-thirds of GAIL’s capacity stays unutilised With this move, private players can now import and sell gas to consumers using GAIL’s infrastructure

Regulator PNGRB is already working out plans to unbundle the marketing and pipeline business in a phased manner

It is learnt, that GAIL plans to segregate the two businesses.

Meanwhile, Petroleum Minister Dharmendra Pradhan is pushing GAIL

to concentrate on building pipeline infrastructure and sell of non-core busi- nesses like petro-chemical complexes at

an ‘appropriate’ time and price owned oil marketing companies – Bharat Petroleum and Indian Oil – have already ofered to buy stakes in the unbundled GAIL – Anilesh S Mahajan

State-THE NON BANKINGFinance Companies sector

with over 11,000 players of all shapes and sizes is

showing reduced numbers This is good news In

the first half of the current year, there were some

368 cancellations, while in 2016/17 there were

169 offset by 105 new registrations

The RBI says the cancellations are mainly

voluntary surrender, and non-compliance of the

revised criteria for net owned funds After the

Payments, and Small Finance banks (mostly

MFIs), there are many NBFC players not

renew-ing licences, and there are fintechs with NBFC

licences where entry and exit are rapid

The NBFC as a sector is just 14 per cent of the

banking industry’s total assets and its share in

loan and advances is about 18 per cent Clearly,

the industry needs fewer but not smaller players

– Anand Adhikariz

THE DECISION TRAP

AIR INDIA

16I BUSINESS TODAY I September 23 I 2018

IT WAS AMONG the wisest decisions taken, when the Finance Ministry junked Air India’s demand for a `30,000-crore fund infusion, reportedly because the airline didn’t present a turnaround plan The Finance Min- istry had discussed a

`11,000-crore bailout package with the Civil Aviation Ministry earlier when the attempt to sell a

76 per cent equity stake in the Maharaja bombed One could well argue that for a government preparing for the general elections next year, there are more urgent issues than reviving Air India The airline has already sucked

in `28,175 crore from the

`30,231-crore (10-year) turnaround plan (TAP) approved by the previous government in 2012 with

a marginal improvement

in its operating profits for two consecutive years but with the deterioration

in market fundamentals, Air India will most likely struggle with profitability yet again – Manu KaushikLicence

to Clean

THE JUST RELEASED GDP numbers for the first quarter of FY19 — showing 8.2 per cent growth— have come as a relief for the government

However, while the recovery is robust, it still depends too much on the government’s spending – and also to an extent on a favourable base efect The government needs to make sure that it can keep the momentum going BT

Should Expense Ratios Come Down?

ECONOMY

First quarter GDP at constant prices

MARKETS

regula-tor Sebi has sought

to review the Total

Expense Ratio (TER) of

mutual fund schemes

MFs charge up to 2.5

per cent TER on active

funds Now that

in-dustry has grown, MFs

sitting on a bigger pie

can reduce TER, as the

cost of running doesn’t

grow much against

ris-ing corpus

Sebi’s stance has not

gone down well with industry, which argues the decision will affect penetration and hinder investor awareness Do they really tell consum-ers relevant things?

Few consumers know about the direct plans

of MFs, which incur lower TER, and thus higher returns For instance, a `5,000 SIP

in SBI BlueChip Fund’s regular plan, after 10

years would return

`13.93 lakh at 15 per cent CAGR It would

be `12.11 lakh, after adjusting for TER of 2.3 per cent Whereas

if that amount was invested in its direct plan, with a TER of 1.18 per cent, you get `12.96 lakh or `84,826 more

If the SIP continued for 10 more years, the difference would be an enormous `9.22 lakh

Most investors don’t know about index-hugging passive funds, which charge under 1 per cent TER

It is time commissions are linked to fund performance A higher TER should be charged only if fund manag-ers deliver alpha Sebi needs to come up with

a fair fee structure for retail investors

REPRESENTATION OF WOMEN IN PARLIAMENT AND OTHER DECISION-MAKING

ROLES IS A KEY INDICATOR OF DEVELOPMENT INDIA HAS

A LONG WAY TO GO IN THIS AREA.

G R A P H I C BY TA N M OY C H A K R A B O RT Y

R E S E A RC H BY S H I VA N I S H A R M A

Indian Administrative ServiceIndian Economic ServiceIndian Foreign ServiceIndian Forest ServiceIndian Police ServiceIndian Statistical Service

IN REPRESENTATION

OF WOMEN IN PARLIAMENT (IN%)

30%



INDIA’S RANK AMONG 193 COUNTRIES IN TERMS OF REPRESENTATION OF WOMEN IN

PARLIAMENT

22I BUSINESS TODAY I September 23 I 2018

GETTING SMARTER WHAT: CII Smart Manufacturing

Conclave

WHEN: Sept 18, Pune

WHAT TO LOOK FOR: India’s manufacturing sector is expected

to change dramatically over the next few years And the biggest change is the emergence of smart manufacturing The conclave will provide a deeper understanding

of possible changes

in the area.

ODISHA CALLING WHAT: Odisha Travel Bazaar

WHEN: 5-7 Oct, Bhubaneshwar

WHAT TO LOOK FOR: The Odisha state tourism fraternity comprising hotel and tour operators aims to create

a platform to aggressively promote the tourist destinations in the state to buyers from India and abroad It will also address investment opportunities in tourism infrastructure in the state

GOING RETAIL WHAT: Massmerize 2018

WHEN: 9 Oct, Delhi

WHAT TO LOOK FOR:

Massmerize 2018 is a C-level dialogue between government and retail, FMCG and e-commerce sectors to discuss regulatory issues, macroeconomics and consumer trends It will help explore opportunities

to accelerate the growth of these sectors.

FUNDING SME S

WHAT: Rajasthan MSME

Finance Summit

WHEN: Sept 27, Jaipur

WHAT TO LOOK FOR:

The MSME sector contributes

significantly to the Indian

economy The theme of

the event is Financing the

Aspirations of MSMEs It will

host discussions relating to

credit flow to MSMEs, issues and

solutions and financial products

for MSMEs.

1

2

3 4

5

6 7

WHEN: Sept 11, Mumbai

WHAT TO LOOK FOR: It is a stop destination to understand the key issues and challenges constraining further growth of the industry

one-It also provides a close look at what to expect from this sector in the not-too-

distant future

DEMYSTIFYING GST

WHAT: Workshop on GST and

e-Way Bill

WHEN: Sept 7, Patna

WHAT TO LOOK FOR:

Technical experts from the

Department of CGST and SGST

will give a demonstration and

help understand the nuances

of the GST and the e-Way Bill

Tax experts will also analyse the

impact of the last GST Council

Meet and its implication

for the industry.

VODAFONE AUSTRALIA, TPG

IN $11 BN MERGER

Under an $11 billion merger, Vodafone Hutchison Australia and TPG Telecom will create a mobile, fixed-line and broadband provider that can chal-lenge market leader Telstra Vodafone Australia, owned by Hong Kong-based CK Hutchison and Vodafone Group, will have a majority 50.1 per cent stake in the new entity A net debt

of $3.5 billion is also being ring-fenced from the deal and will be guaranteed

by the two offshore giants

US POSTS STRONG GROWTH

IN SECOND QUARTER

The U.S economic growth in the

second quarter was stronger than

expected as GDP growth was

revised upwards to 4.2 per cent, the

fastest rate in four years The

econo-my was on track as lower consumer

spending was offset by investments

in software and reduced imports

Compared to the second quarter of

2017, output increased by 2.9 per

cent instead of the previously

report-ed 2.8 per cent

Japanese auto major Toyota Motors is investing $500 million in US-headquartered ride-hailing com-pany Uber so that the companies can jointly develop autonomous vehicles The investment will value Uber at about $72 billion Toyota is reportedly planning to manufacture its Sienna minivans loaded with Uber’s software and testing is scheduled to start on Uber’s ride-sharing network in 2021

In its first direct investment in India,

Warren Buffet-led Berkshire Hathaway

has picked up a small stake of 3-4 per

cent in One97 Communications, the

parent company of digital payments

major Paytm The US investor will also

get a board seat Although details are

not known, Buffet’s company was

reportedly in talks with Paytm to invest

about `2,200-2,500 crore at a

valua-tion of about $10-12 billion

Canadian Foreign Minister Chrystia Freeland and US Trade Representative Robert Lighthizer are in talks to iron out trade differences, the outcome of which could replace the North American Free Trade Agreement (NAFTA) Negotiations entered a crucial phase after the US and Mexico announced a bilateral deal, pav-ing the way for Canada to rejoin talks and modernise the pact that underpins over $1 trillion in annual trade

COCA-COLA TO ACQUIRE COSTA COFFEE

US beverage giant Coca-Cola has agreed to pay $5.1 billion to buy Costa Coffee chain from the UK leisure group Whitbread Costa has nearly 4,000 stores across 32 countries The deal gives Coke a strong coffee platform in parts of Europe, the Asia-Pacific, West Asia and Africa It also puts Coca-Cola

in direct competition with Starbucks and other global coffee brands Earlier this year, Nestlé and Starbucks struck

a $7.2 billion global coffee alliance

24I BUSINESS TODAY I September 23 I 2018

26I BUSINESS TODAY I September 23 I 2018

FOURTEEN-YEAR-OLD Avni

Deshmukh and her

16-year-old sibling Sara alternately

do a post a day on Instagram,

featuring the latest in make-up trends

and commenting on the new and the

fun colours that are out If you think

it is a bit too early in the day to seek

name and fame on that platform, take

a look at the numbers and traction

Their Instagram account #iconicakes

has around 2,75,000 followers, and

several companies send them newly

launched products, expecting reviews

In this era of connected existence

Precision-targeting through authentic voices

has led to the rise of micro-influencers, but

self-regulation is needed for success.

Due to real-time and native tising, influencer marketing became

adver-a big hit with adver-all compadver-anies Of ladver-ate,

however, the sheer focus on eyeballs and the recent scandals where big-time influencers paid for followers, likes and comments to inflate their accounts have been a big turn-off Even big brands are moving away from celebrity influencers

to micro-influencers who are authentic and speak their mind

The rise of the micro-influencers

is not difficult to comprehend As mentioned before, they have a better engagement with their followers and hence, are more careful about what they promote as they do not want to risk their online reputation It also makes them more relevant in terms of product recommendation, a boon for brands trying to reach target audience

“As it is a good business, we should have specific regulations so that people who endorse brands could be held li-able for the comments they post on so-cial media,” says Siddharth Deshmukh, Senior Advisor and Adjunct Professor, MICA, and father of the budding Insta-gram stars mentioned at the beginning

of the story Even then, it will be difficult

to draft rules and follow them as checking influencer claims is easier said than done “We need to call out people who are not genuine,” adds Deshmukh.The UAE has recently tried to regulate this budding industry As per the latest regulations, influencers who make money by promoting brands on their social media pages will need a media licence, something akin to what publishers or media houses require.According to R.P Singh, Confer-ence Chairperson, CMS Asia, and for-mer South-east Asia Head of Media

cross-at VML, self-regulcross-ation is the key fluencers must be self-disciplined and should not endorse a bunch of similar brands at the same time They will lose their credibility by doing so and it will also hurt their long-term growth strat-egy Unless influencers toe the line, they could soon be ignored by follow-ers, losing eyeballs and traction that remain at the core of this business

In-@sonalkhetarpal7

Snapchat’s all-new Android

app, announced last year by

CEO Evan Spiegel, is now

out However, it will require

root access to your phone’s

internal files if you want

to enable the overhauled

app, lauded for its smooth

performance and speed

That could be risky as alpha

versions often pose

performance issues while

rooting your phone could

void your warranty.

TOLD THE INDIAN GOVERNMENT

IT WOULD NOT BE ABLE TO

PROVIDE A SOLUTION FOR

TRACKING THE ORIGIN OF

MESSAGES SHARED ON THE

PLATFORM AS THE MOVE WOULD

GO AGAINST THE CONCEPT OF

USER PRIVACY AND END-TO-END

ENCRYPTION IT HAS, HOWEVER,

SHARED ‘LEARNING MATERIAL’

WITH THE GOVERNMENT TO

CREATE AWARENESS AROUND

MISUSE OF SOCIAL MEDIA AND

FAKE NEWS WHATSAPP HAS

ALSO BEEN ASKED TO SET UP A

LOCAL CORPORATE BODY THAT

WILL BE SUBJECT TO

INDIAN LAWS.

September 23 I 2018I BUSINESS TODAY I 27

FACEBOOK RATING USERS’

TRUSTWORTHINESS

Facebook has started rating its users’

trustworthiness so that the social network would know how much to value user reports when they say that a particular news story might be fake The Washington Post irst reported the rating system Facebook has said in a media statement that it does not maintain a “centralised reputation score” Instead, it is part of “a process to protect against people indiscriminately flagging news as fake and attempting to game the system”.

The amount that public Wi-Fi could contribute to India’s GDP

by 2019, as per a report by sultancy firm Analysys Mason

con-The report also says public Wi-Fi will bring in 40 million new Internet users by this period

Around 100 million people could

be spending an additional $2-3 billion a year on handsets and a similar amount on mobile broad- band as a result of experiencing fast speed on public Wi-Fi.

THE NUMBER OF ALL LA LIGA (TOP PROFESSIONAL FOOTBALL DIVISION OF SPAIN) GAMES THAT FACE- BOOK WILL BROADCAST

IN INDIA FOR FREE IN 2018/19 IN A LANDMARK DEAL THAT WILL CHANGE SPORTS BROADCASTING, THE SOCIAL NETWORKING GIANT HAS BOUGHT THE EXCLUSIVE RIGHTS FOR THREE YEARS.

$ 20 billion 380

BY S O N A L K H E TA R PA L

I L LU ST R AT I O N BY R A J V E R M A

Wages of

Inequality

THE PAY GAP BETWEEN

FEMALE AND MALE EMPLOYEES

NOT ONLY EXISTS BUT ALSO

INCREASES AS THEY ADVANCE

IN THEIR CAREERS WHAT

CAN BE DONE TO REVERSE

THE TREND?

The gender pay gap

in India, the third highest globally

adha (name changed), 39, is a Senior Partner at an

in-vestment banking firm where she has been working for

seven years She was rising swiftly, managing important

clients, cracking multi-million dollar deals Since last

year, when she became a mother of twins, she is not

sure where her career is headed She has been allowed

flexi-time – part of company policy – enabling her to

work from home, whenever needed, but she is no longer

given difficult assignments She fears she will have little

to show when her appraisal comes up “I have worked

hard for so many years I don’t want to give it all up,” she

says “But my company seems to have already decided

that I will not be able to perform as before.”

This is nothing new Managers often

assume that a new mother will not be able

to give priority to work and think they are

doing her a favour by lightening her

work-load, whereas they are only reinforcing a

gender stereotype For new mothers, the

bias is a lot more deep seated Managers

often assume they will not be able to give

priority to work and think they are doing

her a favour by lightening her workload

“It is more of a social issue than an organisational

one,” says Harjeet Khanduja, a veteran in human

re-source (HR) management In some companies, even

the six months of maternity leave turns into a hurdle for

the woman as her clients are assigned to male

counter-parts in her absence, and often remain with them after

she returns to work, forcing her to start from scratch

“Many companies don’t even think about giving a new

mother work matching her potential when she rejoins,” says Sarika Bhattacharyya, CEO at diversity consul-tancy BD Foundation

The corollary is that the new mother’s increment is likely to be lower than her male colleagues’ The women question this The men often say their contribution during that period was more and, hence, they deserve more Managers want least friction “So, they go with the masses,” says Khanduja “Think of it as another kind of vote-bank politics This is how the gender pay gap builds up.”

Discrimination exists not just for the new mother,

but is prevalent across at all levels in any organisation, from high-end investment banks down to family businesses

Anjali Bansal, former global partner and MD with TPG Private Equity, says such discrimination is quite common in traditional family businesses where the patriarch ensures that male colleagues get a higher share of bonus

The gender pay gap is not an specific issue and certainly not a recent one Way back in 1975, 90 per cent of women in Iceland took to streets over this In 2016, they organised anoth-

India-er protest by leaving their office at 2:38 pm, working 30 per cent less that day, as this was the gap between the av-erage income of men and women in Iceland This year,

170 women employees of BBC accused the broadcaster

of paying them less than the men Their former China Editor, Carrie Gracie, resigned and won the pay battle

108

India's rank among 144 nations in WEF’s Global Gender Pay Index

when she got £2,80,000 in back pay and a public

apol-ogy from BBC Though they have not made much news,

there are some cases in India Bimla Rani a packer who

sought equal pay with her male counterparts lost her

case since it was found that the nature of work she did

was different India-born London-based techie Shreya

Ukil had also sued Wipro in London

Law Makes No Difference

India passed the Equal Remuneration Act way back in

1976, which prohibits discrimination in remuneration

on grounds of sex But in practice, a recent International

Labour Organization (ILO) global survey found India’s

gender pay gap for formal workers in urban areas at

23 per cent It ranked India 28th out of 30 countries

Similarly, the World Economic Forum’s, or WEF’s,

Global Gender Gap Index, which surveyed 144

coun-tries, ranked India at 108, far below the global average

and behind neighbours Bangladesh and China “The

gender wage gap is a result of many factors such as

attitudes towards women, occupational segregation, motherhood, education levels, care burden, access to transport, among others,” says Xavier Estupiñan, ILO Wage Specialist

Worse, data shows that for older women with more work experience, the gap is higher Global employ-ment major Monster’s Salary Index 2017 for India re-vealed that for employees with experience of less than two years, the median gap in wages between men and women was 7.8 per cent, but rose to 15.3 per cent among those with six to 10 years experience, and 25 per cent for those with 11 or more years of employment The ILO study, using the National Sample Survey Organisation data, reaches the same conclusion – the wage gap gets wider as men and women age

Proxy advisory firm Institutional Investor Advisory Services (IiAS) has used data from the S&P Bombay Stock Exchange 500 Index to show that women earn less than men even at the CEO level The median annual salary for male CEOs at these companies was `4.4 crore, September 23 I 2018I BUSINESS TODAY I 31

1.99

NAMIBIA

2.41SERBIA

23INDIA

3.34URUGUAY

24.03RUSSIA

3.67SRI LANKA

32.66SOUTH KOREA

THE GLOBAL PAY DIVIDE

The Top 5 Nations…

…and the Bottom 5

Urban Hourly Average Gender Pay Gap in %; Source: ILO

while for women it was `3.9 crore In fact, there is no

woman among the top 20 highest paid CEOs The

high-est earning male CEO gets `83.2 crore while his female

counterpart earns `19.8 crore (at No 25) No doubt, an

important reason for this is the sheer paucity of women

at the top – of the 500 CEOs in the index, only 24 are

women, while among board members, men outnumber

women 11:1 In private sector banks, women CEOs

ac-count for just 14 per cent of the total, in healthcare

com-panies 9 per cent, and in fast moving consumer goods, 4

per cent “I’m the only woman CEO in Indian insurance

– and that’s across some 50 companies encompassing

life insurance, non-life insurance, health insurance and

reinsurance,” says R.M Vishakha, Managing Director

and CEO, IndiaFirst Life Insurance “Ensuring equality

of pay is critical to encourage more women to continue

on their career path to reach leadership positions.”

Manifold Reasons

Discrimination in salary happens not just

at top management but starts right at the

recruitment stage “Ultimately

compensa-tion is finalised on the basis of how much

the candidate is able to negotiate,” says

Khanduja Every recruiter’s aim is to lower

costs Many women are poor negotiators,

while some have priorities other than the

salary Khanduja shares an instance While

interviewing MBA students, a girl broke

down after she was asked one simple

ques-tion —why do you want to do an MBA after cal engineering? She said, “If I don’t get into an MBA programme, my father will get me married.” Hence, some are desperate for work, and less mindful of the

electri-salary offered Others have considerations such as the distance of the place of work from their homes, working hours — since they have domestic re-sponsibilities as well – and whether the work involves travel

or not All this affects the salaries they get Men are rarely simi-larly constrained and their salaries reflect it

“Higher compensation

is not the main criteria for women as it is for men,” Khanduja adds

“Women will negotiate, but not haggle.”

These considerations also influence the kind of jobs women take up “Studies have shown that wage dispar-ity is also due to choice of job roles which, in turn, evolve from gender stereotypes,” says Neharika Vohra, Profes-sor, Faculty of Organisational Behaviour, IIM Ahmed-abad Researchers call this gender segregation For a large part of the 20th century, middle-class women – if they worked at all – were mostly schoolteachers, doc-tors and secretarial staff, which reinforced their social role as nurturers and caretakers It was only from the mid-1970s that they began entering other professions

in large numbers, but even so the hangover of the past remains “Safety, work-life balance, desk job become pervasive themes in the career choices women make or are asked to make,” she says “Women were never meant

to be primary breadwinners and so a high growth career

is never on their agenda.”

But the fact that the jobs women tionally plump for also pay less shows that the society values their work less A Cornell University study found that the difference between occupations and industries in which men and women work is the single largest reason for the gender pay gap An-other US study shows that salary levels de-cline in fields where women enter in large numbers While there have been no corre-sponding studies in India, it is well known that from the lowest to the highest levels,

tradi-“The gender wage gap is

a result of many factors such as attitudes towards women, occupational segregation,

motherhood, education levels, care burden, access to transport.”

COURTESY : ILO

work predominantly done by women

pays less Cooks and maids are paid

less than drivers An HR head’s job will

be valued less than that of a sales head

Top male actors are paid much more

than top female ones

Noxious Work Culture

Workplace culture also often doesn’t

give women the right opportunity to

grow and thrive For instance, one

issue is staying late in office or

net-working outside office hours “I’m

paid at least 30 per cent less than my

male counterparts because I stick to

institutional ways of making sales

in-stead of wining and dining clients,”

says a woman director with a power

firm “Many companies make dinner

networking mandatory, and since I

choose not to join them, I’ve not been

able to move to new jobs as often as I

would have liked, and am therefore

earning less than I should.”

Also, if women leave office on

time, it is seen unfavourably A CEO

of a digital media agency says she has

learnt from office grapevine that she

is referred to as the “part-time CEO”

because she leaves office early

when-ever possible “Work from home,

flexi-time isn't a favour anymore It

is about giving employee the space

to finish work as and when he or

she wants.”

A senior reporter in media shares

how she had to work from different

locations due to her husband’s

trans-fer every 10 months She wasn’t given

a promotion for those two years “It

wasn’t that I was working any less

But the company felt it was doing

me a favour.” Even otherwise,

stud-ies show that women change jobs less

frequently than men “It is a vicious

cycle: women start with less, get low

increments and it gets worse over

time,” says Khanduja

And it’s worse for married women

WageIndicator and Paycheck India

noted in a study for years 2006 to

2013 that while the gender pay gap

for single women was 26.5 per cent,

for married and divorced women, it was over 35 per cent across ages It springs from the inherent perception that women with families cannot fo-cus primarily on their work “An HR executive frankly told me that if he had a choice between a married wom-

an and a man, both equally qualified and experienced, he would promote the latter, as married women are likely

to take more leave,” says a senior ecutive at a consulting firm who didn’t want to be named As for women with young children whose husbands are away, even a job can be elusive “Dur-ing final interview rounds, as soon as prospective employers learnt I was living alone with an eight-month-old daughter, their attitude towards

ex-me changed,” says Rohini Prajapati,

a former HR professional She just could not convince them that she had

a strong enough support system at home to take up a job, and after be-ing turned down 12 times, turned to content writing and blogging

No employer will ever openly mit to paying women less than men

ad-“It’s never said aloud but bias creeps

in when candidates are being assessed for employment or promotion,” says Bhattacharyya of BD Foundation

“Many excuses are offered to explain the pay gap, especially the claim that women being paid less agreed to the salaries they are drawing.” But the fact remains that the male-female ratio

is far better at the entry level and gets skewed towards middle age as more women drop out of work, showing the problems in the ecosystem that don’t let women stay even if they want to

In 2017, a Facebook employee anonymously released data show-ing that, over a five-year time span, the rejection rate of code written by female engineers was 35 per cent higher than that of code written by males The former also elicited 8.2 per cent more comments and ques-tions – showing that women are often held up to higher standards than men

Experience (in years) The wage gap (in%)

Source: Monster Salary Index 2017

GLOBAL BEST PRACTICES

In Northern Ireland, women earn 3.4% more than men, and they have been doing so

since 2010

Germany passed a law efective from January 2018 under which employees can access information on what their peers earn if they feel disadvantaged

Iceland has declared it illegal for employers to pay women less than a man for the

same job

34I BUSINESS TODAY I September 23 I 2018

at work If they fall short, it shows in their increments

Some, however, feel that the women themselves are

also partly to blame “Many women hold themselves

to higher standards and in the process underestimate

their work,” says Rituparna Chakraborty, co-founder of

staffing firm TeamLease “They consider their work

un-equal or unworthy Unless they stop doing so, they have

lost the battle at the start.” Unlike men, who are more

aggressive in asking for bigger roles, women take the

conservative route They are more cautious when

tak-ing new assignments because they like to do everythtak-ing

too well and worry if they can manage the extra work,

says Ameera Shah, Managing Director of

Metropolis Healthcare; this then plays out

in their increment

The liberalisation of the economy since

1991 has had many salutary effects but it

may not have been the best thing for pay

parity In the public sector, rules regarding

compensation and promotions are clearly

defined, with gender differentiation strictly

prohibited, and in the years when it offered

the majority of jobs, women benefitted

“The increments may have been small, the

promotions few, but there was complete pay parity,” says Vishakha of IndiaFirst Life Insurance With expansion

of the private sector came concepts like linking of pay to performance and even potential – assessment of which can be highly subjective, leading to an increase in the gender wage gap In the last five years, for instance, overall compensation of male executives – including CEOs and Executive Directors – has increased 70 per cent, while that of female ones has grown only

48 per cent

Fixing the Problem

Remedies are not difficult “Pay parity is easier to achieve than gender sensitisation or changing the cul-ture of the workplace,” says Pallavi Jha, Chairperson and Managing Director of leadership training company Dale Carnegie Training India There could be laws, for instance, mandating that every company, public or private, employing more than a certain number, publish the average salary it pays men and women for different jobs The UK mandates this for companies with more than 250 employees, and it has led to considerable corrective action

Again, Germany, earlier this year, passed a law by which employees can access information about their peers’ income if they feel disadvantaged – this exam-ple too is worth emulating Iceland, which figures at the top of the WEF’s ranking of countries on gender

equality, imposes fines on companies with more than 25 employees which are found to have deviated from a strict equal pay policy

While legislation is awaited, companies could also start benchmarking salaries for different roles and sticking to them “It is not fair for compensation to be determined

by an individual’s negotiating skills,” says Nirmala Menon, Founder and CEO of HR consulting firm Interweave Consulting.Some companies are doing so – for in-

35%

Pay gap for married and divorced women, compared to

27 per cent for single women

“Studies have shown that wage disparity is also due to choice of job roles which, in turn, evolve from gender stereotypes”

NEHARIKA VOHRA

P R O F E S S O R , F A C U L T Y O F O R G A N I S A

-T I O N A L B E H A V I O U R , I I M A H M E D A B A D

stance, Adobe India announced in

Janu-ary this year that it has achieved gender

pay parity across the company It started

reviewing internal job structures as well

as compensation practices, making

nec-essary adjustments to break existing

biases against women To ensure pay

parity in the long run, the company

dis-continued the widespread practice of

us-ing a job applicant’s prior remuneration

as a benchmark to determine the salary

it will offer “This will help us overcome

the gender wage gap women may have

experienced in previous jobs,” says Jaleel

Abdul, Vice President, Employee

Ex-perience, Adobe India To address the

unconscious biases, the company has

started actively driving trainings and

fine-tuned internal processes, including

the use of gender-neutral language in job

descriptions

In the struggle for pay parity,

how-ever, what is also important is to have

a large enough critical mass of women

employees at every level so that their

voice is heard loud enough This will

happen when there are solutions to

ad-dress the issue of caring for the elderly

and the children “Many women

can-not participate in the labour market

because of this The way forward to

ensure gender equality in the world of

work is to recognise and value

wom-en’s work as well as distribute the care

work,” says Aya Matsuura, ILO Gender

Specialist According to an ILO report,

unpaid care work is one of the main

obstacles to women moving into better

quality jobs It affects the number of

hours spent by women at work,

impact-ing their earnimpact-ings

Unless the issue of distribution of

work at home is addressed, there will

never be enough women at work

In-clusion studies have shown that the

tipping point for any form of

diver-sity to flourish is having about 30 per

cent representation This can be done

by abolishing gender restrictions “To

bring more women into the workforce,

it is important to do away with policies

that perpetuate gender stereotypes,” says

Chakraborty of TeamLease “Child care

leave, for instance, should be allowed for

both men and women Providing it only

to women suggests only mothers are sponsible for child care.” Any factory-related laws that prevent women from working at certain hours or in certain roles should go The armed forces too have rules restricting women taking up combat roles – but these are lately being reconsidered

re-Above all, what is important is equal opportunity HUL is taking conscious efforts to stem the drop off

of women after maternity The pany claims it was able to retain 97 per cent of women who went on a ma-ternity break in 2017 If offers on-site day care facilities, flexible working, job shares/splits and remote working arrangements Then there is a career break policy, for both genders, where employees can take a sabbatical of six months to five years Another is Career

com-by Choice which helps women sition to full-time work post a break

tran-“The representation of women has gone

up dramatically,” says B.P Biddappa, Executive Director, HR at Hindustan Unilever

At legal firm Samvad Partners, nine out of 14 partners are women, as also

70 per cent of its 80-odd lawyers, but this was not the result of any special effort “We never had a female-friendly recruitment policy and never will,” says Harish Narasappa, Founding Partner, Samvad “We treated women appli-cants no differently from men, judging them solely on the basis of qualifica-tions and skills.” So, too, was the case at ICICI Bank in the mid to late 80s when the bank recruited a range of talented women who went on to become top bankers “The institution did not talk

of diversity but of equal opportunity for all,” says K Sudarshan, Managing Partner at executive search firm EMA Partners “Diversity is not an overnight exercise It arises from 20 years of con-sistent effort.”

(With inputs from Ajita

Shashidhar)

@sonalkhetarpal7

LABOUR MARKET FACTORS

Direct labour market discrimination Occupational segregationSelection efectPre-market discrimination Human capital discrimination

FAMILY FACTORS

Parenthood dutiesUndervalued women’s workMotherhood break

SOCIAL FACTORS

Entry barriersLow bargaining powerPreconceived notions on

productivity

WHY THERE

IS A GENDER PAY GAP

Source: WageIndicator Foundation and Paycheck

38I BUSINESS TODAY I September 23 I 2018