Parity ≠ 94:6.
29 companies in the S&P 500 Index are led by women, which is roughly 6% of all companies included in this popular large company index grouping.
We recently performed a deep review of our client portfolios, our investment research and selection process, and our data sources. While accountability to justice, customers, and community is a large part of our process, we were underweighted to companies and investment funds run by women.
There continues to be a growing body of evidence that shows how companies and communities can benefit from investing in women as employees, entrepreneurs, customers, and most importantly, leaders, with decision-making as a critical variable.
A sustainable and inclusive economy largely depends on how much we invest in and support women’s leadership. Strong financial results paired with higher wages paid by companies led by women indicate that women’s leadership within corporations is extremely positive. Further, women control a significant amount of the world’s wealth and the growth rate will outpace broad global wealth accumulation over the next several years. (BCG).
Investing in women’s leadership can create optimal outcomes for our clients and community by delivering strong and impactful business results.
Over the last twenty years, the global gap between male and female employment rates has closed by only 0.6%. The global financing gap for women entrepreneurs is well over $300B (IFC). Further, women of color face a 90% wealth gap, a widening wage gap despite comparable educational attainment, are less likely to own or inherit high-return assets, and face a substantial housing gap (GS).
Goldman Sachs reports that overcoming the aforementioned inequities for Black women would create up to 1.7M jobs for the US economy. Boston Consulting Group states that if men and women participated equally as entrepreneurs, global GDP could rise by $5 Trillion! Further, investments in women will have a ripple effect in their families and the world around them as many women are more likely to reinvest their earnings into their family and local community, plus 80% of all consumer purchases are driven by women. When women hold more executive leadership positions, their companies are more profitable. Companies in the top-quartile for gender diversity on executive teams are more likely to outperform the national average.
As a result of this growing and compelling evidence, we have created a standalone investment portfolio sleeve that focuses on women’s leadership for our clients. It is a thematic, actively managed strategy that seeks to identify investments that promote women and a sustainable future, while fundamentally outperforming peers.
So, why are only 6% of S&P 500 companies run by women?
We will look to the following organizations to answer this question while continuing to learn, evaluate, and invest in women’s leadership:
The World Bank
The International Monetary Fund
The Federal Reserve Bank
100 Women in Finance
Glenmede Women in Leadership Fund
Pax Ellevate Global Women’s Leadership Fund
Boston Consulting Group
Goldman Sachs One Million Black Women
McKinsey & Co.
Who else should we add to this radar?
[…] We also feel a responsibility to educate the marketplace on how racial and gender equity can create a better future, particularly through investments and planning. Our reach has grown since inception and we have over 220,000 followers across our social media platforms, which we leverage to advance the mission of our partners and company. For example, we recently published an essay across our platforms that argues the benefits of investing in companies and funds run by Women titled, “Investing in Women’s Leadership”. […]