Companies, Women’s Management, Finance increasingly interested in gender diversity
Forum for Sustainable Finance 16 Jan 2018
Investor activism on the front of female inclusion in company management is growing.
217 years. It is the time it will take to bridge the gap between participation, opportunity and pay between men and women in the world of work according to the latest “Global Gender Gap Record 2017” of the World Economic Forum (WEF).
The WEF underlined how the progress of gender equality in the economic field would benefit the welfare of the entire planet: in fact, if the gender gap (today at 58%) decreased to 25% by 2025, world GDP would increase by US $ 5.3 thousand billion.
As for top management, the female presence is still limited. According to 2016 data of the European Commission, in the Boards of the main listed companies of the EU countries less than one in four members (23.9%) is female.
In addition, just 5.7% of the companies are led by female CEOs. Data are slow but steady growth: between 2010 and 2016 there was a 12% increase in women on Boards of Directors; a doubled progression in the four countries that introduced legislative measures in this regard (Belgium, Germany, France and Italy).
Several studies are highlighting the multiple positive effects linked to the increase in female participation in the decision-making processes of companies, both in terms of quality, competence and efficiency of personnel, and financial performance.
A 2016 report by the Credit Suisse Research Institute found that the higher the percentage of women in top management, the greater will be the returns for shareholders.
Another example is the research “Gender Quotas: Challenging the Boards, Performance, and the Stock Market” of the Bocconi University.
Starting from the analysis of the effects of the Gulf-Moscow law, which in 2011 introduced in Italy gender representation shares for the Board of Directors and the board of statutory auditors of listed companies and public control, the study found a rejuvenation and an increase in level of education of the top management. Furthermore, the increase in women present in the BoDs is associated with lower volatility of stock prices on the market.
Even in the light of these empirical evidence, financial operators are increasingly inclined to take the “gender” factor into consideration when offering products and in investment strategies.
Significant, in this sense, is the initiative of the Government Pension Investment Fund, the largest pension fund in the world with over US $ 1.4 trillion in management. In July, the Japanese giant announced that it will invest in the MSCI Japan Empowering Women index, which selects companies active in supporting the entry and progress of women in the labor market.
The tools that allow operators to integrate gender equality considerations into their investment strategies are increasingly numerous: for example, last November Lyxor listed the first gender equality in Europe, which will allocate capital into a basket of 150 companies selected based on the level of gender equality.
Furthermore, three of the leading asset management companies in the world (Blackrock, State Street Global Advisors and Vanguard) have asked investor companies to pay greater attention to gender diversity within the BoDs.
State Street’s action was particularly aggressive, as well as having promoted the campaign symbolized by the statue of the “fearless girl” installed on Wall Street, voted against the re-election of the presidents or senior members of the Board of 400 companies that had not taken measures to increase the number of female presences in the Boards.
Initiatives of this type show how much financial operators can play an important role in directing investments towards companies that pay attention to gender equality and in encouraging companies invested to introduce company policies in this sense.
Source Borsa Italiana
