Gender pay gap 2017

Gender pay gap (2017) June 2018

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Contents Bonuses and recognition, April 2017

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ASI salaries, April 2017

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Closing the gender pay gap

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This report on the gender pay gap at Adam Smith International has been submitted voluntarily, as mandatory submission is not required for a company of our size. Nonetheless, ASI considers this an important benchmark in our commitment to continuously improving equality and fairness in our workplace. I confirm that all the data and information included here are accurate.

Jonathan Pell CEO, Adam Smith International

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The gender pay gap reported here demonstrates that there is a lot to be done in order to make our working environment as equal and diverse as we want it to be.

But we are already well ahead of the situation indicated by the pay gap indicators for 2017.

Over the past year, we have introduced a broad programme of reforms that includes measures to support equality of opportunity, achievement and recognition.

We have adopted an Equality Action Plan with champions throughout the company. The Plan covers actions to incorporate diversity and inclusion principles into recruitment, performance appraisals, our policies and procedures, as well encouraging women in leadership, flexible working, and regular discussions about gender balance with the Board of Directors.

There is an active Diversity and Inclusion Committee of staff members, who regularly meet with the Executive Team and are consulted frequently on developments in our corporate life. Over the past year, D&I has become a valued part of our professional lives.

Our reforms of the past year have introduced or refined mechanisms that will guard against any form of discrimination, such as a revised Code of Conduct and Whistleblowing hotline as well as creation of a Staff Council.

The Board of Directors has been chaired by a woman since September 2016.

While our most senior managers were all male in 2017, there are plans to expand and improve the gender balance of the Executive Team in 2018.

ASI staff size falls below the 250 employee-floor set for UK Gender Pay Gap reporting. ASI has nonetheless reported here, based on our UK-based staff, as a measure of transparency and a spur to improving our level of gender equality. The figures were presented to staff before publishing the report to stimulate internal discussion and accountability to staff.

We have set a high priority on reducing the gender pay gap. We see it as a moral commitment, and it is the smart way to operate. Achieving a much better gender balance is a critical goal. But just as important, I recognise that we must continue our journey to strengthen our corporate culture and ensure an inclusive environment for people of all protected characteristics, whether it is gender, age, ability, race, religion or sexual orientation. This is our ambition and my promise.

Jonathan Pell CEO, Adam Smith International

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Adam Smith International (ASI) is a strategic development company that works to grow economies, make governments more efficient, and strengthen security in countries at all stages of development.

2017 was a transformative year for the company, with the introduction of a spectrum of internal reforms, including a focus on equality, diversity and inclusion.

With 191 employees in April 2017, ASI falls below the limit for mandatory reporting. This report is provided voluntarily as a measure of transparency and as a benchmark for the steady improvement that we anticipate in gender equality.

ASI’s past record of hiring and promotion of women into the most senior roles is poor. While it is from an admittedly low base, gender equality has become a corporate priority and a central part of our Equality Action Plan, which enshrines equal treatment of men and women and commitment to more women in leadership roles.

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Bonuses and recognition, April 2017 Bonuses ASI paid annual bonus to all employees, rewarding company-wide contribution to annual results, rather than individual achievement. The bonus was in two forms. The first accentuates the pay gap because it was a percentage of salary; the second, the Employee Ownership Trust bonus, was a fixed amount of bonus and was therefore more rewarding to lowerpaid staff: Bonus 1. All employees received the same percentage of their salary for the previous calendar year, pro-rated for the number of months they worked in that year. Bonus figures reported here reflect payments made in 2016 (the most recent bonus paid prior to the snapshot date), based on the number of months worked in 2015.

This context explains the 100% median bonus pay gap, meaning more than half of women employed in 2017 were not eligible because they had not been on staff during the prior year. At the snapshot date, the majority of female employees had been hired during 2016 or early 2017. Therefore they did not qualify for the 2016 bonus based on employment in 2015. A majority of the male employees working on the snapshot date had been employed in 2015 and were therefore eligible for the bonus.

Bonus 2. ASI is owned by its employees through an EOT which expanded the bonus entitlement for lower-paid employees by introducing an additional EOT bonus. An identical fixed amount was paid to every employee as an EOT bonus, pro-rated for the number of months worked in the previous year but not linked to salary. This meant that many staff at junior levels receive a proportionately larger bonus than available through the salary-based bonus payment.

Salary Increases for performance At ASI, personal performance is rewarded through salary increases based on a performance rating. Men and women were recognized equally in the top performance category: 63 percent of women were recognized as outstanding or above expectations, as were 63 percent of male employees.

Outstanding, above expectations

Meets expectations

Requires improvement

63% 63% 28% 25% 1.8% 2.5%

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ASI salaries, April 2017 Definitions Following the UK government guidelines for calculating the gender pay gap, data is from the UK payroll on the snapshot date of 5 April 2017, using the following indicators: Indicator

Description

Mean gender pay gap in hourly pay

The difference between the average of men’s and women’s pay, calculated based on each employee’s ordinary pay and bonus pay

Median gender pay gap in hourly pay

The difference between the midpoints in the ranges of men’s and women’s pay, calculated based on each employee’s ordinary pay and bonus pay

Mean bonus gender pay gap

The difference between the average of men’s and women’s bonuses, calculated based on bonuses received by the relevant employees in the prior 12 months

Median bonus gender pay gap

The difference between the midpoints in the ranges of men’s and women’s bonuses, calculated based on bonuses received by the relevant employees in the prior 12 months

Proportion of males and females receiving a bonus payment

The proportion of males and females who got bonus payments, calculated based on bonuses received by the relevant employees in the prior 12 months

Proportion of males and females in each pay quartile

The proportion of male and female employees in four pay bands, calculated based on each employee’s ordinary pay and bonus pay

Median

29.1%

Gender pay Mean

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33.9%

UPPER

Pay gap in bonuses Median 100%

QUARTILE

80.4%

Mean 53.6%

Bonuses received %

19.6%

y gap

8%

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8.

48

43.5% UPPER MIDDLE QUARTILE

56.5%

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42.6% LOWER MIDDLE QUARTILE

57.4% 63% LOWER QUARTILE

37%

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Closing the gender pay gap ASI is committed to closing the gender pay gap as part of wider change of the corporate culture.

In April 2017, ASI established a Diversity and Inclusion (D&I) Committee, comprised of volunteer staff members who are tasked with building an understanding of equality challenges within the company and advising the Executive Team and Board on how to address them.

The D&I Committee’s first task was to gather information from employees in order to understand the extent of the required reforms. It conducted a survey in July 2017 that provided a baseline of information on how employees view the company and areas that need attention, such as gender, mental health, race, and sexual orientation With D&I Committee support, ASI has revised a range of staff policies, including Code of Conduct, Flexible Working, Mental Health, Leave (incorporating Time Off in Lieu), Grievance, and Equality, Diversity & Dignity at Work.

ASI has made equality, particularly gender equality, part of all aspects of the regular business of the company.

The Board and Executive Team apply this lens to all decision-making, from recruitment to promotions and policy decisions. Along with the gender perspective, a global company such as ASI is particularly sensitive to enriching an environment of inclusivity for all races and for staff located in a wide range of geographies.

Our plan for equality action In 2018 ASI introduced an Equality Action Plan (EAP) which sets out the steps to achieving ASI’s vision of being a diverse and inclusive business, where all our colleagues, customers and clients feel welcome, valued and included.

Incr to st

The EAP builds on the results of the employee survey, the work of the D&I Committee, and external expert advice. It comprises cross-functional priorities and stand-alone initiatives, including a focus on staff mental wellbeing, support for LGBT+ colleagues and a pathway for women into leadership positions. The EAP also addresses ASI’s internal and external communications, relationships with our suppliers and clients and the extent to which they share our values of diversity and inclusion.

The CEO and the Executive Team lead on the implementation of the EAP, while the Board holds them to account for its delivery by including the EAP as a standing item at its quarterly meetings.

The delivery of D&I at ASI is a collective effort and the responsibility of all staff. Line managers and directors are expected to lead by example and play a key role in supporting initiatives as change agents.

Specific 2018 initiatives focused on women The Board and Executive Team, in the EAP, commit to understanding barriers for women to progress at ASI, and to starting initiatives to close the gender gap. The Plan outlines the following indicators related to gender for 2018: Undertake study to understand barriers to women in leadership at ASI (acknowledging diversity of women working at ASI) and present back to staff, Executive Team and Board Start at least one initiative resulting from the findings of the study (e.g. related to recruitment and selection or leadership training, mentoring, etc)

Inc s awa and of f wo

At least 4 Inspiring speaker lunches organised in London and local offices to feature women leaders and leaders from minorities or those with protected characteristics At least one new Non-Executive Board member appointed in 2018 is female The Board will track progress against these indicators, holding itself and the executive to account for delivering these priorities. During 2018 ASI will undertake a second staff survey to gather more data related to equality and will complete a plan for 2019, particularly building on the results of the women in leadership study.

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Ext refle di

Equality Action Plan

rease support taff identifying as LGBT+

crease staff areness d uptake flexible orking

To engage in dialogue on race within ASI

Recruitment of new Board members is inclusive and Board monitors progress of D&I

ternal communications ect ASI’s commitment to iversity and inclusion

All permanent staff have an increased understanding of D&I through formal training

Regular communication to staff on D&I in an inclusive manner

Understand barriers for women to progress at ASI and start initiatives to close the gender gap at the highest levels Improve staff’s mental well-being through an active approach to mental health and improved work-life balance

All relevant policies and procedures are compliant with equality legislation, inclusive and mitigate against discrimination

Understanding of diversity of ASI staff and board in order to develop positive actions to increase diversity and inclusion at all levels of business 7

UK

Adam Smith International 240 Blackfriars Road London SE1 8NW United Kingdom +44 20 7735 6660

Africa

Adam Smith International 2nd Floor, Cavendish 14 Riverside PO Box 26721-00100 Nairobi Kenya +254 20 444 4388

Asia Pacific

Adam Smith International 507/46-56 Kippax Street Surry Hills Sydney NSW 2010 Australia +61 2 8265 0000

North America Adam Smith International 1712 N Street NW, Suite 400 Washington, DC 20036 United States of America +1 (202) 873-7626

EU

Adam Smith Europe B.V. Keizersgracht 62, 1015 CS Amsterdam, Netherlands +31 (0)20 520 7400

www.adamsmithinternational.com 8