Irish woman spearheads Diageo bid to close gender pay gap

Drinks giant has cut its pay gap to 5.4% on HR chief Mairéad Nayager’s watch

Mairéad Nayager, Diageo’s chief HR officer, with her daughter Maeve. Photograph: Dara Mac Dónaill

Mairéad Nayager, Diageo’s chief HR officer, with her daughter Maeve. Photograph: Dara Mac Dónaill

 

As the top human resources executive in a FTSE 100 company, and the woman who signs off on its gender pay gap reports, Diageo’s Mairéad Nayager sometimes hears from women seeking advice on situations that crop up in other, less-than-enlightened workplaces.

“I get phone calls from people – friends of mine, or relatives – saying: ‘This is what I’ve just been told, is that reasonable?’ And I say: ‘No, that’s blatant discrimination. Here’s what you do, you say this, and you say that, and I guarantee that it will change.’”

We have been talking about why it is that, in some businesses, there are plenty of women in the talent pipeline but they get stuck there (in what is sometimes dubbed the “marzipan layer”) and “don’t see the promotions coming in the same way” as male colleagues.

Nayager has had women tell her they don’t want the very top jobs because they perceive them to be incompatible with the work-life balance they need – but companies shouldn’t use this as an excuse for a lack of gender balance in senior management, she cautions. “I would nearly say erase what I just said, if it causes that outcome, because I think it is a very small part of the issue.”

Hospitable environment

In truth, it all comes down to whether or not the environment is hospitable.

“Senior roles are, by definition, more stressful and you feel like you need to be more available. But I think many companies are getting beyond that. I don’t feel, for example, that I have to be fully available all weekend, every weekend. I just don’t,” she says. In her office, “nobody is clock-watching”.

Sometimes fathers may be more open about parental responsibilities in the workplace, I suggest, because they have the confidence that they won’t be judged for them, whereas mothers may feel they have to be as covert as possible, in case their status rebounds on them.

“Exactly. And some of it is based on their reference points – on what they have heard has happened. It’s not as if it is made up.”

In a blog post on last March’s International Women’s Day, Nayager told Diageo staff the day felt “particularly pertinent” to her as she was writing the message from her maternity leave.

Representing the next generation of female talent, Maeve (1) plays with her toy car and random shiny things in the offices of the Dublin public relations agency where we meet. They’re about to fly back to London.

“Now the thing is, you have to be good going through Heathrow without Daddy [Diageo executive Dayalan Nayager],” Nayager says hopefully to her daughter. “We’ll just look pitiful and get people to help us. ‘Do you mind?’ That’s going to be my line.”

From a “very rural” background three miles outside Kiltimagh, Co Mayo, she has been Diageo’s chief HR officer for more than three years. This is her first Irish media interview. The company is keen for her to talk about her work on gender equality and diversity at Diageo and the statistics make it easy to understand why.

Diageo’s record is better than most. Its gender pay gap report for 2018, published under mandatory reporting requirements for companies in Britain with more than 250 employees, shows that its combined operations there have a median pay gap of 5.4 per cent, down from 8.6 per cent the previous year, and substantially narrower than the average reported gap of 18.4 per cent.

But there was some variation. Diageo Great Britain Ltd was among the 13 per cent of companies that actually paid women more than men on an hourly basis (though their bonuses were still lower). In the manufacturing business Diageo Scotland Ltd, however, women’s median hourly rate was 18 per cent lower than men’s, worsening from a 16.7 per cent gap in 2017.

“We are quite proud of where we have come out [in Diageo GB],” says Nayager. “I don’t think there are many companies that can show a positive position, albeit we still have the challenge of Scotland to overcome.”

Closing the Scottish gap will take time, though the work has begun. She cites Diageo’s scholarships for women who want to study engineering or brewing and distilling at Heriot-Watt University in Edinburgh. In Ireland, meanwhile, Diageo currently has its first female apprentice.

“We have a female apprentice working in the craft technical side of the business for the first time in, I think, 250 years.”

Just the one? She clarifies that there are plenty of women in the Irish operation, but that this is the first on this specific apprenticeship. “Because of the nature of that work, even through school, you don’t see females tending to choose the subjects or show the interest in it from an early age. So we are positively taking steps,” she says.

Unsociable hours become part of the issue later on. “If women do feel the responsibility of looking after children, then expecting that they will work night shifts as well... that’s challenging,” says Nayager. “We’re looking at all options in terms of the flexibility that we can show. We do still have to run a 24/7 operation.”

On boardroom balance, Diageo also does well by FTSE 100 standards. Four of its nine-strong board are women, as are 40 per cent of its executive committee (which includes Nayager, alongside another Irishwoman, Diageo general counsel Siobhán Moriarty). Women hold an estimated 34 per cent of Diageo’s global senior leadership roles, but the company has a target of at least 40 per cent by 2025.

Why are so many other companies not doing as well? Nayager believes the issue is “multifaceted”, but that progress will be limited if the “tone from the top” doesn’t demand it. “Our CEO, Ivan [Menezes], really doesn’t differentiate between men and women on his team, and talks very openly about his commitment to this agenda.”

It wasn’t quite like that when she first joined the drinks giant – owner of the Guinness, Smirnoff and Johnnie Walker brands, among many others – in 2006, initially as employee relations manager in Dublin.

“It was very different. It wasn’t until 2010 that the first female was appointed to the executive team,” says Nayager. “Not only that, we now have six nationalities, whereas back when I joined it was all male and nearly all British, with one exception I think.”

With Diageo employing more than 30,000 people across 180 countries, the cultural differences across the company are as wide as they can be. Even now, the underlying human rights are far from uniform.

“I can’t say we are equal everywhere when it comes to flexible working, gender balance and openness to diversity,” says Nayager. “There are still countries in Africa where we operate where it is illegal to be gay. And while we do our best to influence, we can’t change the legislative environment, and therefore we have to be very conscious and supportive of our employees.”

South Africa

After three years in Dublin, she moved to Diageo’s operations in South Africa in 2009, where prevailing attitudes to race were a shock to encounter. “I was horrified because somebody sat down with an organisation chart of my team and said ‘black’, ‘white’, ‘coloured’,” she recalls.

“I found it very challenging. When I was there, I would say it would directly or indirectly take up 50 per cent of my time, trying to improve our targets, and trying to sift through and find where bias existed in the business.”

When a joint venture between Diageo and Heineken came to an end, Diageo moved its business from Cape Town to Johannesburg. “Symbolically, that was a very important decision, because more of the talent we could attract from the black population was based in Johannesburg.”

Her background is on “what I would call the harder side of HR”. After a postgrad at the Smurfit Business School, she started her career at business group Ibec, where she represented employers “at tribunals and that sort of thing” and studied employment law before joining Diageo.

It is more by accident than design that she ended up in HR, she says. She had initially “fallen into” the higher diploma in education at Trinity. “Many of our family are teachers, it’s just in our blood. I thought ‘Right, I know I can do this’ but after about a year of teaching I knew it wasn’t for me.”

Whether they choose it at the outset or later stumble upon it, it is striking that many more women than men find their way to the HR department.

“There are definitely more women in HR, but it’s not always [the case that] the most senior person in HR is a woman, which is completely unacceptable, in my view, when you see how many women are coming through,” Nayager says.

Women account for “about 70 per cent, maybe more” of HR people, and yet “there are still very few female chief HR officers on the FTSE”.

Seeing this trend play out in her own field has perhaps heightened her determination on the question of gender pay.

“I personally sign off on the whole global pay budget annually,” she says. This means making sure her team of HR directors and business leaders across Diageo are “consciously thinking about it if women’s pay is in any way falling behind men’s”.

Multinationals that have been through Britain’s reporting system will have an advantage over Irish counterparts if/when proposed mandatory gender pay gap reporting is introduced here. Nothing has been signed into law yet, and it could take a couple ofyears more before companies have to publish any numbers, but Diageo has already started to examine its payrolls to see what might emerge once they do.

“The governance around these things takes a lot of work, but we’re a big company. We can manage it.”

Gender pay gap reporting is “a bit of a technical exercise” and it can be “a blunt instrument”, she says. “But I still value the fact that it has been introduced.”

A gap can arise for multiple reasons and doesn’t prove the existence of illegal pay discrimination (an absence of equal pay for equal work). Mandatory reporting has, however, exposed some companies’ failures on equal pay. That this is still happening, “in this day and age”, says Nayager, “is just ridiculous”.

Pushback

Thinking of the notorious “anti-diversity memo” written by a now ex-employee of Google, I ask if she is aware of any internal pushback or resentment to gender and diversity targets.

“We don’t experience it in any open way,” she says. Promoting gender balance is about doing things like ensuring there are female candidates for jobs; it is not about only hiring women. “We would never exclusively say we are only hiring women. We want to promote the best talent.”

Diageo will never compromise on this, though she understands how some white men end up feeling excluded by the new narrative. “I’m sure it can feel a little bit lonely sometimes. I think if you’re a white male and you want to get on a board in the UK, it might be quite difficult right now. But when it becomes more balanced, that will right itself.”

Job applicants, meanwhile, are asking outright about flexible working policies in interviews. “That’s a big shift from where it might have been a number of years ago, when people would nearly try and hide the fact that they might have children. Now they come in and they say: ‘What’s your policy?’”

There is increased interest from within, too, in Diageo’s stance on all manner of social and political issues, which (a recent Six Nations misstep aside) it has poured into its marketing, from Smirnoff’s LGBT+ inclusive campaigns to a well-timed pro-immigration Johnnie Walker ad in the US market.

It does seem like people are more actively calling for corporations to take this kind of leadership, rather than merely being cynical when they do?

“It is to fill a gap,” she says. “There is so much distrust and volatility in the world, and the speed at which things are changing with technology, it probably is quite difficult for people to know where to get direction from.”

For Nayager, as chief HR officer, the high expectations of the younger workforce when it comes to Diageo’s investment in various issues and initiatives is “alarming, in a way”, but also brilliant and joyful. “I think it’s amazing that there’s a pull on this, rather than a push.”

CV

Name: Mairéad Nayager

Post: Chief HR officer, Diageo plc.

Age: 44

Family: From Co Mayo, she now lives in London with husband Dayalan and their daughter Maeve.

Something you might expect: Time has “become more limited”, but she enjoys “nice long walks”, eating out and coming home to family in Ireland.

Something that might surprise: She originally studied Irish and philosophy at Trinity.

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