Arjuna Capital managing partner Natasha Lamb has convinced 21 companies to commit to analyzing and closing their gender pay gaps. These include major players in tech (Apple, Intel, Microsoft), finance (J.P. Morgan Chase, Bank of America, Mastercard), and retail (Amazon, Nike, Starbucks). In honor of Equal Pay Day, Fortune sat down with the activist investor to talk about how—and why—she engages with companies on the issue of pay equity. The interview below has been edited and condensed for clarity.
Fortune: Bloomberg recently called you one of the 50 most influential people in business for your work on pay equity. Can you please explain what you do?
Natasha Lamb: Arjuna Capital is a wealth management firm focused on sustainable and impact investing. We look to widen the lens on how we evaluate our investments, taking into account environmental, social and governance criteria and looking beyond traditional methods of analysis to incorporate the sustainability factors. So when it comes to the pay gap, we’re asking companies to close the gender pay gap and commit to keeping it closed.
Talk to me about the process of getting a company to change. How does that actually happen?
Our clients are investors in these various companies and as investors, they have a voice and they have a right to file a shareholder proposal at the companies. They can ask companies to improve their performance, to look at what might be unmitigated risks or opportunities. That proposal goes to a vote of shareholders at the company’s annual meeting for other shareholders to weigh in on.
When investors engage in this way, companies often will enter into a dialog with them and the best possible outcome is that the proposal never has to go to a vote, but that the company commits to making the requested changes. In the case of the work that we’ve done in the tech space, on Wall Street, and with retail companies, we’ve had a lot of success reaching agreement with companies through dialog and then withdrawing the proposals before they go to a vote.
There are so many different issues that women in the workplace are talking about. Why the focus on pay equity?
Not only because it’s the right thing to do for women, but because of the business case to do so. If you pay women fairly and competitively, then the company’s ability to retain top talent goes up, as well as its ability to move women up the ladder. What we know from the research is that the diversity of teams affects performance, and so we’re always making that case. So while equal pay is not the only structural barrier for women in the workplace, it’s an essential one and actually ranked as women’s top concern. If companies can manage pay equity effectively, their ability to attract and retain women goes up. And that’s in service of drawing from 100% of the talent pool, creating a more robust diverse leadership pipeline and reaping the benefits that that diversity affords.
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Is it really that simple to get companies to change? Just write proposals?
Overall, Arjuna has filed 23 proposals on the gender pay gap. The first in this campaign was eBay in 2014. When that proposal when to a vote, it got just 8% of the vote. The following year, we increased the number of proposals we sent out to nine and one by one, companies through dialog began to reach an agreement with us, and so by the time the eBay proposal went to a vote in the spring of 2016, the gender pay gap was no longer seen as an emerging investor issue—it was seen as a competitive issue in terms of a company’s ability to attract and retain female talent. It got a 51% vote—it went up six-fold. Equal pay has become a rallying cry for women. The question is no longer, ‘Should you issue a gender pay gap report?’ but ‘How and when should u issue a gender pay gap report?’
How can those of us who aren’t professional investors do to help narrow the pay gap?
Every single person has a role to play when it comes to this issue. For women who are working, it’s important to ask management if they’re doing a gender pay gap analysis and ask for that information to be transparent and reportable. For so long this information has been kept in a black box, and the fact is, if you can’t see it, you can’t manage it. Often, women are told they need to be more aggressive negotiators, but the onus isn’t on women to change. It’s on companies to measure and report this information in a transparent and accountable way.