On March 26, 1973, the London Stock Exchange broke with tradition and for the first time in its 200-year history, admitted female stockbrokers. Six years earlier, in 1967, Muriel Siebert became the first woman to own a seat on the New York Stock Exchange — a full 175 years after the exchange was founded.
Fast-forward a few decades and women in the financial sector are still struggling to get to the top. But progress is being made. A new report by the Sustainable Stock Exchanges (SSE)* initiative, which examines the state of gender equality in the private sector, looked at exchanges across 13 markets—Australia, Brazil, Egypt, Germany, Hong Kong, India, Italy, Jordan, Kazakhstan, Kenya, South Africa, the United Kingdom and the United States—and found that many exchanges have taken the lead on addressing this issue.
For example, the ASX in Australia first adopted gender diversity reporting recommendations in 2010, making the ASX one of the first exchanges to promote gender diversity. In 2010, the board of directors of ASX set targets to achieve female representation across various levels of the work force.
The London Stock Exchange Group (LSEG), a merger of the LSE and Borsa Italiana, has a strong national policy to promote gender equality. Borsa Italiana actively promotes “in the Board Room”, a training programme aimed at preparing female leaders for future board positions. Building on this success, Borsa Italiana is now developing “The CEO School”, a similar model targeting women preparing for the CEO role. The LSEG has publicly committed to achieve 40% female representation across the workforce, including senior management.
And progress is not limited to the developed world. Women’s empowerment is a focus of the Amman Stock Exchange’s (ASE) sustainability strategy. ASE has achieved near equal representation in its employee base due to recruitment policies based upon fair and equitable competition, ensuring appointment of candidates without discrimination. The motivation behind adopting this policy was enhanced corporate performance.
In South Africa, recent efforts to promote gender equality have been inextricably linked to black economic empowerment initiatives. The JSE has noted this challenge internally and is taking action to better identify and promote gender-specific initiatives both through its diversity and transformation programmes, as well as through gender-specific measures.In 2015, the JSE introduced a rule requiring issuers to have a policy for the promotion of gender diversity at the board level and disclose their performance against it.
But despite these positive examples, more work needs to be done. Exchanges can continue to raise the bar on gender equality through requiring or encouraging listed companies to report on diversity objectives and how they are achieved; taking action to enforce gender requirements across the supply chain or by engaging the market securities regulator to require or encourage listed companies to report on diversity metrics.
But exchanges can’t make progress in isolation. While stock exchanges can leverage the power of capital markets to close the gender gap, investors and companies each have a valuable role to play in addressing gender equality. Morgan Stanley recently introduced an Impact Platform’s Gender Diversity Tool Kit, which guides financial advisers in helping individual and institutional clients develop investment approaches that integrate gender diversity criteria into their investment portfolios.
Gender-specific products are also growing. Examples include the Pax Ellevate Global Women’s Index Fund and State Street Global Advisors’ Gender Diversity Index Fund. In addition to indices, some companies have begun to issue women-focused social impact bonds such as the Women’s Livelihood Bond. Representing $16 million, it pools high-impact borrowers that are positively impacting the lives of women in Asia and the IFC’s Banking on Women Bond Program which helps financial institutions serve women-owned businesses.
Across the corporate sector, companies can adopt all of the practices by stock exchanges, including improved disclosure on gender diversity policies and practices. Management can also engage with local trade unions on the issue of gender equality. For companies looking to improve their practices, they can take advantage of certifications and capacity building tools.
In celebration of International Women’s Day on 8 March, over 40 stock exchanges will host a bell ringing ceremony to raise awareness of the pivotal role the private sector can play in advancing gender equality. It will be a good time to reflect on how much we’ve achieved since 1973 but also how far we have yet to go.
Fiona Reynolds is Managing Director of the Principles for Responsible Investment.
*The PRI is one of the partners of the SSE along with UNGC, UNCTAD and UNEPFI