Here at Investing Ethically we’re really committed to being an inclusive workplace, meaning that all our team feel they belong. As an example, each year since 2018 we’ve been a signatory to the Women in Finance Charter – promoting gender diversity and a more balanced and fair financial services industry. In 2023 we’re pleased to continue our pledge to 50% female Board directors. In addition, two of our four financial planners are women as are, currently, half our employees.
There’s now clear evidence that companies with diverse leadership teams perform better. For example, McKinsey found that companies in the top quartile for management gender diversity are 25% more likely to have above-average profitability, compared to the ‘laggards’ in the fourth quartile. For ethnic diversity it’s even higher at 36%.
To me, this is because these companies have leaders who better represent their staff, customers, and society at large – as well as having broader perspectives and ideas that help the company in challenging times, such as Covid. So valuing diversity is not only the right thing to do, there’s also a strong business case.
That said, globally, women are still hugely under-represented as business leaders, especially at senior levels. Research from the World Economic Forum highlights this “drop to the top”. Today, less than a third of people in company leadership roles are women (and sadly the financial services sector is among the worst). Things are getting better, slowly, but there’s still so much room for improvement. Looking at the UK’s FTSE 100, there are only nine women Chief Execs. Indeed, I’ve read that – in 2021 – there were more FTSE100 CEO’s called Andy or Steve than there were women!
The ethical funds we deal with, here at Investing Ethically, recognise the importance of this. Board diversity is a key theme for ethical fund managers, a measure of good corporate governance. How well companies manage diversity, more broadly, will influence fund managers’ investment decisions – and be an important topic for ongoing engagement. Personally I find this re-assuring on lots of levels – as a financial adviser, an investor, a company director…oh, and yes, as a woman. 😊
If you’d like to learn more about diversity, your investments, and how our Chartered Financial Planners can help, then please get in touch.
This article is for information purposes only. None of the content should be considered a personal recommendation to invest in any of the companies or funds listed. You should seek personal financial advice before considering investments.