Investing In Women–And Not Just In The Abstract

Companies with more women on boards and in leadership positions outperform, financially and otherwise, companies with fewer women–and yet, this information doesn’t typically factor into investment decisions. Now, some firms are giving investors the option to invest in companies that promote gender equality.

Investing In Women–And Not Just In The Abstract


You can probably name the CEOs of many global corporations–but you might not be able to name the people who serve on the boards. Nor might you be able to say how many women serve on the boards. 

And yet, corporate boards make decisions that affect shareholder value, company brand and reputation, global economies and industries, employment, the environment, human rights, the fortunes of suppliers and distributors, health care and pensions, and much more. And studies show that companies with more women on boards and in leadership positions outperform–financially and otherwise–companies with fewer women.

Knowing that companies with gender diversity perform best, you’d imagine that all investors would factor this information into their investment decisions. Unfortunately, not yet. But the investment firms that are leading the way tend to be those with sustainable investing solutions that integrate environmental, social, and governance (ESG) factors into investment analysis and decision-making. 

Pax World Investments, for example, established a Global Women’s Equality Fund.

“This is the only mutual fund in America that is focused on investing in companies that are global leaders in promoting gender equality and women’s empowerment in the workplace and beyond,” says Joe Keefe, President and CEO, said in an interview. “We look at gender equality as an investment concept. We invest in companies with at least two women on the board, and preferably three, and management teams with at least 30% women.” Recent top holdings include companies like Pfizer, Roche, and BlackRock.  

For all 13 of its funds, Pax World focuses on companies with women friendly work policies; recruiting, hiring, promoting, and advancing women; and family friendly work policies. “These are all indicators of effective management,” says Keefe. “The research bears this out.”


One challenge to ESG investors is the inadequacy of gender reporting.

Aditi Mohapatra is senior sustainability analyst at Calvert Investments, a leader in sustainable and responsible investing. “Few companies disclose data regarding the percentage of women in their workforce,” Mohapatra told me in an interview. “Only eight out of the S&P 100 publicly reported by race and gender.” 

Mohapatra added that while companies indicate whether they have work-life balance programs and retention programs, they fail to report how many people participate.  “As a result, as investors, it’s difficult to assess the effectiveness of the programs.”

To address the lack of information, Calvert launched the Calvert Women’s Principles in partnership with the United Nations Development Fund for Women (UNIFEM) in 2004. This statement formed the basis for UN Women’s Empowerment Principles, which are use by business offering guidance on how to empower women in the workplace, marketplace, and community, says Mohapatra. They were adopted in 2009 by the UN Global Impact and UNIFEM.  “As investors, we need a way to assess a company’s performance related to women’s empowerment,” she says. “The principles also provide companies with a set of goals to measure their performance and progress.”

Keefe and Mohapatra recently addressed the Fourth Annual Women’s Empowerment Event at the U.N. Keefe urged companies to adopt the Women’s Empowerment Principles, while Mohapatra talked about “Demystifying the Metrics: Overcoming Obstacles to Increase Transparency.”

Not satisfied to being reactive with regard to board composition, Pax World is proactive by voting their proxies to advance gender diversity on corporate boards. “If, as investors, we don’t exercise our proxy votes to say no to all male boards, then we are part of the problem,” said Keefe.  Not only does Keefe encourage mutual funds, pension funds, and other money managers to withhold support for slates of directors that are all male, Keefe also urges fund managers to write follow up letters explaining their opposition.


Mohapatra told me that Calvert not only votes their proxies against slates lacking women or minorities, but they have also filed shareholder proposals to sixty companies to date. Their request is not simply for companies to add women and minorities to the board, but to change the director-selection process. Calvert has achieved success with Netflix, Apple, True Religion, and Under Armour.

We all want companies to be accountable for their practices. Calvert, Pax World, and other ESG investment firms like Walden Asset Management, Trillium Asset Management, and Domini Social Investments provide lessons about the roles we can play in advancing corporate behaviors that are good for business and good for the world. 

Check out the boards of the companies where you invest. Check out the policies of the mutual funds where you invest, and encourage them to vote their proxies only for slates of directors with significant gender diversity.

[Image: Flickr user Victor1558]

About the author

Korngold provides strategy consulting to global corporations on sustainability, facilitating corporate-nonprofit partnerships, and training and placing hundreds of business executives on NGO/nonprofit boards for 20+ years. She provides strategy and board governance consulting to NGO/nonprofit boards, foundations, and educational and healthcare institutions.