05/05/2024 – 10:01
The search for gender diversity and equal pay has gained more space in the Brazilian public debate since last year, generating controversy and some results. The buzz around the term became stronger after the decree that regulated, at the end of last year, salary transparency (law 14,611/2023). The law requires companies with more than one hundred employees to publish biannual reports on remuneration and diversity within teams. The need for public policies that address the issue has also led other regulatory bodies to move in the same direction, as is the case with entities that operate in the capital markets.
Clara Serva, partner in the Business, Human Rights and ESG area at TozziniFreire Advogados, recognizes “substantial advances” in recent years and recalls that, in July 2023, the Securities and Exchange Commission (CVM) approved B3’s ASG Annex, which determined that listed companies must elect at least one woman and one “member of an underrepresented community” to their boards of directors or statutory boards. Companies need to include, in the Reference Form, the measures taken to achieve this goal or explain why they did not adopt them, a mechanism known as “practice or explain”.
In the case of law 14,611/2023, the topic has generated judicialization. Gabriela Lima, partner in the Labor and Social Security Law area at TozziniFreire, explains that the criticisms are related to the criteria used by the government to prepare these reports. She says that many companies have asked for injunctions in court that exempt them from publishing the reports under the current terms.
“The Ministry of Labor divided positions into large occupation groups, but compared the CEO’s salary with that of managers, for example. This creates a distortion. Furthermore, the Ministry took information from 2022, when self-declaration of race was not mandatory. So the part that talks about representation of black people is most likely wrong”, says the lawyer.
Lima also draws attention to the fact that many parameters of racial and gender equality are already provided for in the Federal Constitution and the CLT. “These recent measures are super important, but they reinforce something that already existed,” he says. She points out that article 461 of the CLT already determined that there cannot be a salary difference in the case of identical functions in the same business establishment, without distinction of gender, ethnicity, nationality or age.
American market
At least since 2015, the American financial market has also implemented policies to strengthen diversity and governance within companies. At the time, the Security and Exchange Commission (SEC) and other federal financial agencies issued the Final Interagency Policy Statement Establishing Joint Standards for Evaluating the Diversity Policies and Practices of Regulated Entities.
The movement came together with an American norm known as the Dodd-Frank Act, which required, in section 342, regulatory agencies to create Departments for the Inclusion of Women and Minorities (OMWI). Dodd-Frank was issued in response to the 2008 financial crisis and aimed to regulate the capital markets in the United States.
Looking for good results
As a cascading effect, some companies also created internal departments to think about the issue. This is what Shunda Robinson, senior vice president of Diversity, Equity and Inclusion at GM Financial, the financial arm of General Motors, says.
“If women were the majority in the company, why did men occupy more positions of power?” asks Shunda, saying that this was the question that led her to implement, in 2015, a mentoring program for equal access to career development. within GM Financial. She says that there was no doubt that the gender composition, almost ten years ago, resembled that of a pyramid. “Women were at the bottom and men at the top”, stated the executive in an exclusive interview with Broadcast (Grupo Estado’s real-time news system).
Shunda recognizes that there is still progress to be made, but celebrates the progress made after implementing the program. In 2023, women made up 54% of the global team and 35% of leadership. In the Brazilian branch, where 50.4% are women, the majority (52%) of management positions are already occupied by women. Local numbers are from April 2024.
‘The more diversity, the greater the perception of risk’
But why did an American law that aimed to prevent crises consider it important to make efforts to guarantee the inclusion of women in the capital market? Clara Serva, from TozziniFreire, says she believes that the perception of market risks is greater the more diverse the organizations are. “If I don’t know how to identify what’s between the lines, what wasn’t said, I can’t identify the risk.”
There are also practices that directly impact financial return. Cristina Kerr, executive president (CEO) of consultancy CKZ Diversidade, notes an increasingly strong demand for governance policies within production chains. “It has happened that suppliers have lost customers, even though they have the best product on the market, because the organization is not diverse, for example. And then bigger companies stop hiring,” she explains.
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