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Are We There Yet?

As we celebrate the Women Impact Strategy’s second anniversary in April, it’s a bit thrilling to reflect on all that has happened in this relatively short period of time.

We began with the seed of an idea in 2015:

If it is true that gender diversity in corporate leadership roles (directors and executives) produces better results, is there a related  investment strategy that may be both financially rewarding and socially impactful?

Our own research, in addition to that of several others[1], concluded that the investment thesis was more than wishful thinking.  The research found better stock performance over long periods of time (ten years) for public companies with higher numbers of women at the top.   But looking in the rear view mirror has its limitations, and bringing an investment strategy to life in real time is …  something else entirely.

So how is it going? Exciting on all fronts, for sure.

  • Our experience continues to support the thesis.
  • Our strategy is now available as an separately managed account on the TD Ameritrade platform
  • Articles are published daily on the benefits of diversity, and the movement of investment dollars into socially impactful investments[2] continues to grow significantly
  • We are pleased to be among a very short list of independent firms across the country that have launched a gender lens investment strategy using liquid public stocks.
  • We presented at conferences and had our research published on the Impact of Women in Corporate Leadership
  • We are encouraged by the increasing numbers of women joining public boards, and the institutional investors who announced they are voting proxies[3] with an eye on the diversity of the board member candidates.
  • Perhaps most importantly, the benefits of gender diversity across areas such as decision making, innovation, and talent retention, are becoming widely recognized as providing a strategic advantage to companies.

Like a passenger in the back seat on a long car trip, we ask the question “Are we there yet?”.  No indeed! We see progress, but we are clearly not at a defined destination.  There is no magic number which allows anyone to check a box “Done”.

For the companies in which we invest, it’s about creating and sustaining a corporate culture which values the benefits of diversity.   And that, like investing, is best done with a long term view.

Suzanne Mestayer

 

Footnotes:

[1] Credit Suisse Research Institute, “The CS Gender 3000: The Reward for Change”. September 2016, https://glg.it/assets/docs/csri-gender-3000.pdf

Hunt, V., Yee, L., Prince, S., and Dixon-Fyle, S., McKinsey & Company, “Delivering through diversity”. January 2018, https://www.mckinsey.com/business-functions/organization/our-insights/delivering-through-diversity

[2] “total US-domiciled assets unders management using SRI strategies grew to $8.72 trillion at the start of 2016”, US SIF Foudantion Biennial Reprt on: US Sustainable, Responsible and Impact Investing Trends, 2016.

[3] Vittorio, A., “New York State Pension Fund to Protest All-Male Boards”, March 21, 2018, https://www.bna.com/new-york-state-n57982090156/.

Fink, L., “Annual Letter to CEOs: A Sense of Purpose”, https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter

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