I have always been told that if I wanted to change a company I should start with the shareholders. Listed companies that require capital from outside parties will always listen to shareholders.
What we sometimes forget is that anyone with a superannuation account is a shareholder. We are giving the firms money in search of a return. Superannuation is much more than just an account, it is our own portfolio of investments.
With the news that Sallie Krawcheck, former doyenne of Wall Street who led investments for Citi and Bank of America, is heading back to the market with Ellevate (previously 85 Broads), we can all be excited.
Krawcheck is creating an investment index which will be known as Pax Ellevate Global Women’s Index Fund, which culls companies based on gender equality in their top ranks, ultimately encouraging more of them to put women into positions of power. She has recognised the interest of women who want to support gender equality in their investments, as well as the opportunity that exists in shareholder activism. Krawcheck is fusing her two great passions: gender equality and investments. It isn’t only about supporting women, she is also aiming to get a return for them.
Morgan Stanley started its own version of this a little over a year ago. They have called it Parity Portfolio, led by the formidable Eve Ellis. It is a collection of companies that have at least three women on their boards.
The companies who are listed in Parity Portfolio are generally global household names. Ellis claims it’s a diverse range, and that the companies must prove themselves beyond gender diversity.
The cynics were there when Parity first launched – as they always are – yet Parity is outperforming much of the rest of the market.
According to Catalyst, when Fortune 500 companies have at least three women on their board they have a competitive advantage: 73% better return on sales, 83% better return on equity and a 66% better return on invested capital. Parity Portfolio reflects this.
The investment world has long been known as a boys club, and finance and economics still tends to be dominated by men. But the men who work in financial services will be more inclined to support gender equality if they can see the benefit for their clients and KPIs.
If all the women in Australia with superannuation accounts asked their advisers the composition of the boards they’ve invested in, they might be surprised — and possibly shocked — by the answers. Indeed, they might be met with no answer at all.
You wouldn’t nominally invest in a company that you don’t support, neither should your super account. Whether you actively invest and deal with shares, or barely pay attention to your superannuation account, take an interest in where your money ends up. It is gender equality that will best support you and other women.
It makes sense to support women, economically and morally. Everyone can take steps as investors to demand gender equality.