The Board undertake a review and report to shareholders by December 2019, omitting proprietary information, on compensation practices, policies and strategies addressing any current or historic gender pay gap between female and male employees within operations of Sun Life Financial Inc. and subsidiaries.
The gender pay gap is defined as the difference between male and female median earnings expressed as a percentage of male earnings.
The gender pay gap contributes to women’s poverty, acts as a barrier to women’s full economic participation and reduces global economic growth.
Statistics Canada estimates women earn 75 cents for every dollar earned by men. This gap widens for women who are indigenous, living with a disability, racialized, or newcomers.
The World Economic Forum estimates that, if pay equity gap trends continue, it will take 217 years to close the economic gender gap worldwide.
The Organization for Economic Co-operation and Development reports that addressing gender pay equity can increase economic growth, reduce poverty, enhance societal well-being, and help ensure sustainable development.
Currently there is limited reporting on the issue of the gender pay gap by publicly traded Canadian companies including Sun Life.
Regulatory risks are emerging as global trends are moving towards greater disclosure requirements. The United Kingdom introduced gender pay gap reporting regulation in 2017. Sun Life’s UK operations did not participate in this disclosure however results from other major Canadian financial organizations reported similar results: a mean gap between men and women’s hourly rate in the 40% range with women accounting for a minority of the highest paid company employees and the majority of lowest paid. As a result, the United Kingdom identified insurance as one of the sectors with the highest gender pay gap.
The positive effects of diverse gender leadership on a company’s financial and ESG performance are well documented however Women in Financial Services, a 2016 report by consulting group Oliver Wyman, found the financial services industry has the highest level of mid-career exit for women in comparison to other sectors. Female managers, senior managers, and executives in financial services are 20 -30 percent more likely to leave their employer than peers in other industries. Mckinsey research finds “tracking and eliminating gender pay gaps” is a best practice in support of the advancement and retention of women leaders.
Sun Life will likely be required to comply with Canada’s new pay equity legislation: Act to Establish a Proactive Pay Equity Regime within the Federal Public and Private Sectors. While the legislation does not explicitly require public reporting, voluntary disclosure by Sun Life on the gender pay gap and its management of the issue will further enhance Sun life’s reputation and brand as an equal employer and leader in corporate social responsibility while also supporting Sun Life’s impact on the UN Sustainable Development Goal 5: Gender Equality, Goal 8: Decent Work and Economic Growth, and Goal 10: Reduced Inequalities.