The Gender Leadership Advantage | Mackenzie Investments

The Gender Leadership Advantage

The Gender Leadership Advantage

Heather Smith, Lead Sustainability Research Analyst at Impax, shares insights on the Gender Leadership Advantage and the criteria that guide the investment selection strategy.

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Heather: Unfortunately, in 2018, gender equality remains an issue. Despite the evidence about the benefits associated with gender diversity, not many companies are well positioned to take advantage of those benefits. Women hold just 5% of CEO positions and 17% of board positions among S&P 500 companies; women hold just 17% of executive management positions globally. And at the current pace of change, it will 170 years to close that gender gap and decades to close the gender wage gap.  And as an investment firm, we're committed to helping close that gap.

There's a strong business case for investing in women, and there's a really compelling body of research that all points in the same direction, and that is that companies perform better when there's more women in corporate leadership.

And studies have also shown that companies with greater levels of women throughout the organization tend to have higher levels of innovation, increased productivity, higher returns on capital, and increased and more employee retention and satisfaction. 

So to put it quite simply, gender diversity and competitive financial performance go hand in hand.

The idea and the thesis behind our strategy is quite simple. Drawing on the body of research, we think that we should be identifying companies that are gender leaders and investing in them.  And so we've developed a systematic method to identify companies that are gender leaders using five criteria of gender leadership. And the criteria includes the representation of women on boards, the representation of women in executive management, whether the company has a female CEO, a female CFO and whether the company is a signatory to the UN women's empowerment principles. 

We believe that the 400 companies that emerge from this selection process are more likely to deliver strong financial performance over time because they are taking advantage of what women can bring to the bottom line.