Analysis: International Women’s Day: RI’s investment, research and policy round-up

A detailed look at the investment, research and polls tied to International Women’s Day

To mark International Woman’s Day, Responsible Investor profiles some of the latest research, products and policies focused on gender diversity issues.


National Australia Bank (NAB) has today launched the first social bond financing companies that champion women and equality in a positive way. The NAB Social Bond (Gender Equality) will be marketed to institutional investors and will finance organisations that the Workplace Gender Equality Agency cites as Employers of Choice for Gender Equality, and that meet the requirements of NAB’s social bond framework. Organisations included in the bond are Lend Lease, Australian Catholic University, PwC and KPMG Australia.

State Street Global Advisors says it will vote against board members on nominating committees if they don’t make advances at adding women. The Wall Street Journal reports that the index-fund giant won’t have an exact quota, but companies must prove they have attempted to improve a lack of diversity. CEO Ronald O’Hanley says: “If someone could convince us that the absence of diversity or gender diversity is not a problem, we’re leaving that open. Will they? I doubt it.” Letters on gender diversity will be sent to the heads of Russell 3000, FTSE 350 and S&P/AXS 300 companies with no women on their boards. SSGA has also placed a bronze statue of a young girl leaning toward Wall Street’s famed bronze bull.

Legal & General Investment Management has been voting against company chairmen for lack of diversity since last year. Clare Payn, Head of Corporate Governance North America at LGIM, is responsible for the diversity theme. She told Responsible Investor: “Even though most FTSE 100 companies have reached the previous Davies Report target of 25% of women on the board by 2015, we are not softening our stance and continue to hold companies to account on this issue. In 2016 we voted against 12 chairmen of FTSE 350 companies for lack of progress on diversity. LGIM fully supports the new targets set out in the Hampton-Alexander Review, and our principles will strengthen over time, as we expect all boards in the FTSE 350 to be 30% female by 2020.”

Investment consultant Willis Towers Watson is having “serious discussions” about incorporating gender diversity as part of its due diligence of fund managers, according to Global Head of Manager Research Luba Nikulina. Speaking at an MSCI event on the subject of women in finance, she said good data on the issue was vital to be able to research links between gender diversity and investment performance.

The corporate governance heads at seven of the 10 largest institutional investors in equities are now women, according to data compiled by the New York Times. Those investors oversee $14trn (€13.3trn) in assets and in an editorial profiling these women the paper calls it a rare corner of finance where women dominate.

Clients of Canada’s Shareholder Association for Research and Education (SHARE) have filed shareholder proposals at four Canadian companies that do not have women on their boards of directors asking them to develop a clear plan to change that picture. Companies targeted include the parent company of coffee and donuts chain Tim Horton’s. SHARE said mutual funds firm OceanRock is asking for a comprehensive plan to address diversity across the entire company.Research:

MSCI study: The Tipping Point: Women On Boards And Financial Performance is just one piece of research demonstrating that companies with a healthy proportion of female leadership boosts financial performance. It analysed US companies over a five-year period (2011-2016): companies that began the period with at least three women on the board experienced median gains in return of equity of 10 percentage points or earnings per share of 37%. In contrast companies that began the period with no female directors experienced median changes of – 1 percentage point in ROE and -8% in EPS over the study period. Key stat: Globally, women held 15.8% of all directorships as of September 26 2016, up from 15% last year, based on an examination of MSCI ACWI Index constituents.

Lots of research says gender-diverse boards tend to outperform, but research from business school INSEAD claims gender diverse boards are less likely to use share buybacks to buy undervalued shares and achieve excess returns, than male-dominated ones, which may have better access to information networks. Read more here.


Project Rose is a tracker of funds and products investing with a gender lens mandate in global public debt and equity securities, including the Barclays Women in Leadership ETN and the Morgan Stanley Parity Portfolio. The tool was co-created by Veris Wealth Partners and angel investor Suzanne Biegel’s Women Effect and shows an almost 5x increase in assets under management with a gender lens since 2014. Link

Since the tool’s launch, AXA Investment Management has launched a fund comprising listed equity and equity-related securities of all-cap worldwide companies which promotes gender diversity and female leadership.

Jon Hale, head of sustainability research at Morningstar, compares two public offerings for gender-lens investing – the State Street Global Advisors Gender Diversity Index ETF (SHE) Index and the Pax Ellevate Global Women’s Index Fund.

In 2016 Bloomberg launched its Gender-Equality Index (BFGEI) that tracks gender data on financial services firms. Samantha Reiss, part of Bloomberg’s strategy and corporate development team, says the data giant has decided to focus its gender-equality index on financial firms to create a “trickle-down effect”. It initially launched with 26 companies in seven countries; and has doubled participation to 52 companies this year in 17 countries. Key stat: 2017 BFGEI member firms have an average of 24.24% female representation on boards, compared to an average of 12.75% from 1496 financial services firms. Link

Women in ETFs (Exchange-Traded Funds) is ringing the bell for gender equality today at 43 exchanges globally with the UN Global Compact, UN Women, Sustainable Stock Exchanges Initiative, IFC and World Federation of Stock Exchanges. Speaking to Responsible Investor, Deborah Fuhr, founder of Women in ETFs (WE), said the organisation is seeking to create more opportunities and help women in the finance industry. She added 13% of WE’s 2,600 members are men: “It’s important to engage men on this. So they buy-in and support the idea.” Link

The data:

Globally, female representation on financial services boards is 20% and executive committees 16%, according to the Women in Financial Services 2016 report. The study, from consultants Oliver Wyman, finds representation is growing since it first did the study in 2014, but progress is slow.

Financial News’ sixth Women in Finance Survey makes for depressing reading. In a survey of 705 women in the finance industry, 64.5% say their gender has hindered their chances of having a successful career. One investment banking veteran said: “The industry has moved backwards. In the 80s/90s when major markets were evolving, women played a key role in building [the industry] – and [were] respected for it. The more [business as usual] things have become, the more male dominance you find.”

Today the Official Monetary and Financial Institutions Forum (OMFIF) will mark International Women’s Day with the launch of the Global Public Investor Gender Balance Index, which tracks the balance between men and women in senior positions at central banks around the world.

One in five funds has at least one manager who is a woman, a figure that has not improved since the global financial crisis of 2008, according to research from Morningstar of 26, 340 fund managers. Fund Managers by Gender involves 56 countries and finds those with large financial centres have lower proportions of women fund managers than many smaller markets. Other interesting findings in the study include that women are not often tapped to manage mutual fund, women have better odds of managing passive funds than active funds and women fund managers hold on to their investment holdings longer than men fund managers. The paper does not address relative performance by gender but Morningstar hopes to construct such a study in the future.

The pay gap:

MSCI has found that among US companies, over the last 10 years women on average were awarded higher annual Total Summary Pay (the amount booked by companies as CEO compensation) than men but ultimately took home lower annual Total Realized Pay (which factors in gains from the vesting of stock and option awards granted in prior years). Male CEOs in the US were awarded stock options more often than female CEOs and their grants were worth more on average. This suggests persisting inequality in underlying pay packages for women and men. Meggin Thwing Eastman, author of the report Has Gender Pay Parity Arrived at the Executive Suite says the reason for this is unclear but suggests one possibility is that women may negotiate differently from men on pay or have different feelings about risk.• Wages of women directors at listed companies on the Singapore Exchange are just over half of what men in similar positions earn, at 56.8%, according to recent a study by the National University of Singapore. Today Online reports that the largest gap was among executive directors (43.9%). Female executive directors earned just 56.1% of their male counterparts’ salaries, while female non-executive directors earned 70.4% compared to men. Women occupied the CEO role in just 3.6% of all SGX-listed firms, and only 1.6% held chair positions.


Territories with gender board quotas include: Norway, Spain, Finland, Quebec, Israel, Iceland, Kenya, France, Italy, Belgium, Germany Link

In 2014, the Australian Council of Superannuation Investors announced a policy target of 30% women on each ASX 200 board by the end of 2017.

In France companies on the CAC 40 index must meet a quota of 40% women on boards by 2017.

By law the largest companies in Germany must have 30% female directors. The law came into effect last year but according to reports many companies are not meeting the quota. Late last year gender pay parity legislation was proposed in the country.

Since 2003 Norway has legally required public companies to have at least 40% of female board members. But according to an OECD online blog, the quota only worked after sanctions were brought in. This led to a rapid change: the 40% target was reached in 2008.

Last April, the Female Employment Promotion Legislation was passed that requires large private and public sector companies in Japan to disclose gender diversity targets.

Sweden’s parliament this year rejected a government proposal for quotas mandating that at least 40% of company board members are female. The legislation would have imposed financial penalties on companies not having achieved the target by 2019. The fines would have ranged from between 250,000 and 5m (€26,224 and €0.5m) kroner depending on a company’s market capitalisation. Swedish employers with more than 24 employees are already required to report gender-specific salary data and draw up an action plan on equal pay every three years.

From next month, large companies in the UK will have to report their gender pay and gender bonus pay gaps. The data will be housed in a publicly available online tool.

Under the Obama administration, much was done to drive equal pay, according to Jocelyn Frye from the Center for American Progress. The first bill he signed as President in 2009 was the Lilly Ledbetter Fair Pay Act. But partisan stalemate in Congress has meant there has been little action on equal pay since Ledbetter, such as increased pay transparency, says Frye. She adds it is not clear what President Donald Trump’s actions on equal pay will be as yet.