New Studies and Insights on the Benefits of Gender Equality in Leadership Positions

1. New Studies and Insights on the Benefits of Gender
Equality in Leadership Positions

2. New Metrics ’15
The Benefits of Gender Equality in Leadership
Julie Fox Gorte
SVP for Sustainable Investing

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The case for gender diversity
Source:
http://www.catalyst.org/knowledge/diversity-
matters
• Business case for diversity: risk and financial performance
• “…firms with higher representation of women in the top
management team face fewer lawsuits overall, particularly
lawsuits related to product liability, environment, medical
liability, labor and contracts.” (Akhikari et al, 2015)
• “…gender diversity may have a positive impact on the quality of
credit…” (Del Prete & Stefani, 2015)
• “A 10% increase of women in top management positions
improves the bank’s future return on equity by more than 4%
p.a…we show that this positive relationship is…almost twice as
large during the global financial crisis than in stale market
conditions…” (Reinert et al, 2015)
• “…we hypothesize that…women are more effective in male-
dominated industries in reducing both the frequency and
severity of fraud…empirical tests…are largely consistent with
these hypotheses.” (Cumming et al, 2015)
• “The analysis found a statistically significant relationship
between a more diverse leadership and better financial
performance.” (Hunt et al, 2014)
• “We find that female CFOs are more conservative in their
financial reporting…Finally, we find that the stock market reacts
less negatively to bad earnings news of firms with female CFOs.”
(Iftekhar et al, 2009)

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• Business Case for Diversity
• Innovation
• “…firms with more gender-diverse boards achieve greater innovative success.” (Chen et al, 2015)
• Governance
• “…female board representation is positively related to boards’ two primary responsibilities,
monitoring and strategy involvement.” (Post & Byron, 2014)
• Productivity
• “…female leadership has a positive effect on female wages at the top of the distribution, and a
negative one at the bottom…This evidence is consistent with a model where female executives
are better equipped at interpreting signals of productivity from female workers…if women
became CEOs of firms with at least 20% female employment, sales per worker would increase
6.7%.” (Flabbi et al, 2014)
• Sustainability
• “Companies with more women on their board of directors are more likely to be companies that:
– invest in renewable power generation
– have integrated climate change effects into their actuarial models…
– measure and reduce carbon emissions of their products…
– proactively address the environmental risks…” (McElhaney & Mobasseri, 2012)
The case for gender diversity

5. Sparklies
• The discussion isn’t women v. men, it’s diversity v.
homogeneity
• Diversity helps to leverage all the talent on the
planet
• Diversity is an indicator of the quality of
management
• Diversity is important at all levels of the
organization, not just in the boardroom
• Diversity in decision-making is positively
associated with various measures of sustainability
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Source: Harvard Business Review,
https://hbr.org/2011/06/defend-your-research-what-makes-a-team-smart
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6. 6
Pax World Investments
30 Penhallow Street
Suite 400
Portsmouth, NH 03801
603.431.8022
www.paxworld.com
THANK YOU
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7. 6
Pax World Investments
30 Penhallow Street
Suite 400
Portsmouth, NH 03801
603.431.8022
www.paxworld.com
THANK YOU
6