Philip Morris International has placed wage equality and gender balance at the core of its business strategy as the company transforms from a traditional cigarette manufacturer to a science and technology-centered company with a raft of innovative smoke-free products that are significantly less harmful to health in the pipeline and set for rollout shortly.
“We’re a tobacco company, and we want the world to become smoke-free. You need the best talent you could possibly get, and you need a lot of inclusive voices and diversity to achieve this”, a richly ironic but breath-taking declaration unabashedly made by Stacey Kennedy, PMI president for South and Southeast Asia during The Wall Street Journal CEO Council held on September 20 in Singapore.
“It’s shocking to think that as we approach the year 2020, men and women are still not paid equally for equal work in many parts of the world. A gender gap is a talent gap” Kennedy said.
To bridge this gap, PMI sought the equal pay certification by third-party EQUAL-SALARY Foundation, thus becoming the first international company to earn the citation.
The certification confirms PMI’s commitment to equality and is an important building block on the road to creating an inclusive, gender-balanced workplace.
“One of the hardest things for any company to do is to decide where you start when it comes to improving diversity and inclusion. So we decided to pick a real, tangible action that would draw a line in the sand. Make sure that we are sending a very clear message to the talent pool that’s out there, women and men, that we pay equally”, she said.
PMI has also set into motion its ambitious target of increasing representation of women in management positions across the company to 40 percent by the year 2022.
The PMI lady executive expressed optimism that this could be achieved as it is already operating at 35.5 percent to date.
“Women bring color, literally and figuratively, to a sea of men in white shirts. We bring different ideas, a different strategic lens to tackle problems, and different leadership styles. This is what inclusion and diversity are all about — to include women’s voices that represent 60 percent to 70 percent of the population who are making consumer purchase decisions”, Kennedy said.
She cited a 2019 study showing that “companies with one-third women in senior management positions do on average around 15-percent profit on an annual basis”.
“Those are hard-core numbers, and we know that companies that have women fare better. So this is a business imperative, it’s a business case, and grounding it that way, I think, is very important,” she added.
According to Kennedy, being the first multinational company to achieve global equal salary certification has already had a dramatic effect on the giant firm’s ability to attract not only female but male talents as well.
“The younger generation who are entering the workforce want to know that they are going to work for a company with lots of innovation and diverse ideas, and a real mantra around fairness,” she added.
The PMI official noted that the tobacco industry is male-dominated, and yet her company is making progress in achieving wage equality and gender balance.
“If we can do it, other companies can, too. We hope that our success can inspire other companies and kick off a global movement,” she stressed.
As PMI initiates wage equality, it also acknowledges the disruption it is causing in the tobacco industry, and Kennedy hopes that their low-risk products would overtake combustible cigarette sales in the future.
The US Food and Drug Administration recently confirmed that IQOS, PMI’s electrically heated tobacco system, is appropriate for the protection of public health and has authorized it for sale in the United States.
FDA’s decision follows its comprehensive assessment of PMI’s premarket tobacco product applications filed with the Agency in 2017.
Unlike cigarettes, the IQOS system heats — but does not burn — tobacco. It is the first electrically heated tobacco product to qualify for sale in the US pursuant to the 2009 law that empowers FDA to regulate tobacco products, including through oversight of innovative products.
“And that’s exactly how we do it, having a very high conversion rate among adults who were smoking cigarettes and who were able to abandon cigarettes by switching to our reduced-risk products. More than 70 percent of all of those who use our electronic heated tobacco system have been able to completely switch. They’re not smoking cigarettes anymore. I think that’s the strongest statement that tells me that we have a very good prospect of being successful”, she said.
Kennedy zeroes in on a simple message about smoking: “Burning is the problem.”
“The problem is when you light tobacco, it generates significant levels of harmful chemicals that are found in the smoke. Inhaling that smoke puts these harmful chemicals in your body. By providing a product that heats tobacco but doesn’t burn it, you avoid creating vast amounts of harmful chemicals in the aerosol. So smokers can enjoy having a product that helps them to stop smoking by making the switch. We want to make sure that message is available for the smokers”, she explained.
Consumer welfare and safety are also fine feathers on the cap of PMI’s corporate social responsibility principles.