Gender Diversity Reporting in Mexico

In this Expert Focus article, Carlos Escoto and Marianela Romero, a partner in Galicia's Environmental and ESG practice and an associate in its Compliance and ESG practice, consider the rising importance of gender diversity reporting in Mexico and the further actions companies will need to take in this fast-developing area.

Published on 28 June 2022
Carlos Escoto Chambers Expert Focus Author
Carlos Escoto
Ranked in 1 department in Chambers Latin America 2022
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Marianela Romero Chambers Expert Focus Author
Marianela Romero

While only a few years ago, ESG matters and gender diversity reporting were not on the agenda of companies in Mexico, today they are a pressing and important item. The world has learned that the economic performance of companies, and countries in general, is directly linked to their ability to foster and promote diversity. With institutional investors pressing companies on their commitments to gender diversity, some of them are starting to focus on these long-neglected matters. Discussion on the topic includes, among other things, gender pay gaps, the lack of women and minority groups in leadership positions and how to create diverse workforces.

More diverse boards, while they can advocate for further diversity, are not necessarily focused on such matters only.

In the public arena, the debate on how to increase the participation of women in Mexico lead to the 2019 amendments to the Mexican Constitution. Pursuant to the constitutional reform, there must be gender parity in the integration of the three branches of the Union and in the three levels of the Mexican government (federal, local and municipal). Whether the integration of more women in the public sphere will be a mechanism that actually promotes the advancement of women and gender diversity, is still to be seen, since it would be necessary to analyse if legislation and policies on gender diversity are part of the resulting agenda, a good metric of which would be if germane bills of law or regulation were being pushed through the legislative process. Be that as it may, the Constitutional reform is evidence of how gender diversity has gained public attention in Mexico.

What is understood by the term gender diversity in Mexico

When speaking about gender diversity in the context of a company or the public administration, reference is made to a fair representation of people of different genders across positions. Even though the term includes gender outside of the binary of male and female, in Mexico this non-binary distinction is still a hot topic and an issue of significant controversy. Consequently, there has not been a development of indicators pointing to this distinction nor development of measures of success in their performance or implementation. Therefore, gender outside of the binary of male and female is analysed and measured along with other diversity indicators (eg, among minority groups), to the effect that companies tend to report gender diversity using the binary male-female distinction. A shift in reporting from gender diversity only to a broader perspective on diversity and inclusion is anticipated.

Diagnosis and reporting

A company cannot engage in an effective diversity strategy without being able to make a general diagnosis of its gender diversity situation. For such purposes, companies can use different standards, for example the ones set forth by the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board or the UN Principles for Responsible Investment.

Public companies in Mexico started reporting on certain ESG matters due to the sustainability commitment signed by the Mexican Exchange Commission in 2014; they are even obliged to make a self-evaluation of their maturity on sustainability matters. However, while these companies do make a disclosure on their relationship with stakeholders, specific information on gender diversity is unfortunately rarely given.

Firms need to move from the traditional approach of reviewing the percentage of women on boards of directors towards a focus on women in leadership positions and the real influence they can exercise within the company.

Indeed, public entities are required to disclose information regarding their corporate governance, board of directors, management, committees and shareholders, including the composition of the board of directors with respect to gender, as part of their annual report, but in Mexico, the particular focus that gender diversity reporting has had is limited to the percentage of women sitting on boards of directors. However, good ESG governance reporting must include more data on the actual situation of the company, such as the criteria set forth by the GRI Standards which includes:

  • a breakdown of employees per employee category according to age group, gender, minority group membership and other indicators of diversity; and
  • the ratio of basic salary and remuneration of women to men by employee category.

In any case, there needs to be a clear commitment from companies to gender diversity. Firms need to move from the traditional approach of reviewing the percentage of women on boards of directors towards a focus on women in leadership positions and the real influence they can exercise within the company. They must analyse gender diversity across different levels of the company. Representation should matter at all levels of seniority if companies aim to foster gender diversity from the production line up to the executive leadership positions in management or on the board.

More diverse boards, while they can advocate for further diversity, are not necessarily focused on such matters only. They can, of course, exercise their influence to promote diverse policies, but it is not enough if this is not duly reflected in the companys culture.

Reacting and reporting

As part of the process of implementing gender diversity at the company, the desired approach (based on the preferred reporting standards of the company) needs to be incorporated into the day-to-day culture of the company and its human resources practices: recruitment, training, retention, pay and career advancement, mentorships, networks, etc. Additionally, internal reporting channels must have a gender component. Mexico has also made advances requiring companies to promote an organisational environment favourable to female employees and preventing acts of workplace violence.

The road to gender diversity, as well as greater diversity in general, may seem like a long one, but companies should make a strict commitments to both short and long-term goals that aim to achieve a diverse workplace environment. Setting measurable indicators from year to year will increase gender diversity and will allow employees to adapt to and adopt practices appropriate to diversity. Being able to report such new policies and advancements will make the company and the employees conscious of and accountable for their actions and their impact on gender diversity in the workplace.

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