Boost performance with women in leadership

Boost performance with women in leadership

ESG
Ida Kassa Johannesen

Head of ESG investments, Saxo Bank.

Summary:  Though research shows that companies with more women in leadership positions outperform their peers, women are still largely underrepresented in leadership roles worldwide. The research points to those companies being more innovative, more socially responsible, having higher customer satisfaction and higher employee retention. Empowering women seem to be a win-win benefiting both women and society as a whole. Saxo’s Women in Leadership basket puts the research to the test by focusing on companies that advance women through senior leadership positions.


International Women's Day

Since 1975 the United Nations has celebrated International Women’s Day (IWD) every year on 8 March. IWD is about gender equality, women’s advancement and empowerment. It is a celebration of women’s rights and achievements over the years, so let us talk about women.

Women have come a long way, but not that long ago, women could not enjoy many of the rights they now have. For example:

  • Only in 1967, contraception was authorized in France.
  • Only in 1974, women were granted the right to open a bank account in the US.
  • Only in 1986, women were allowed to vote in nationwide polls in Switzerland.
  • Only in 2015, women were allowed to vote in local elections in Saudi Arabia. 
Since then, there has been significant progress. Women have taken leadership positions in governments and corporations, have traveled to space, led prestigious universities and won Nobel prizes. However, stark differences remain between genders when it comes to wages, wealth, investing and leadership. According to the World Economic Forum, in 2021, the gender pay gap in Europe and the USA was 12.7% and 22.1% respectively. The global gender gap score, the difference between women and men in social, political, intellectual, cultural and economic attainments, was 68.4% in 2023 for all countries. No country has yet achieved gender parity and it will unfortunately take close to a century before women can expect to achieve equality with men. The numbers are shocking, but this is the reality we live in.

    Gender equality matters 

    Two of the most important reasons that gender equality matters are that it is good for the economy and reduces poverty. This can save the lives of women and their children in many places around the world. 

    One way to advance and empower women is by giving them a seat at the table, bringing more women into leadership positions. This is not only beneficial to women but also to companies, in fact, Research shows that companies with more women in leadership positions perform better. Those companies tend to be more innovative, more socially responsible, have higher customer satisfaction and higher employee retention. Having more women simply changes the way companies think and operate.

    To put the research to the test, we have put together a basket of global companies that are committed to gender diversity and advancing women through policies, programmes, and leadership positions. Only companies with at least 30% women in senior management and top sustainability ratings are considered for inclusion in this basket. 

    Risks and other considerations

    1. Market risk: the risk that the value of your assets declines. Depending on the locations in which these companies operate, you might also face political and emerging market risks, leading to reduced liquidity and a lack of financial, legal, and social stability. 
    2. Gender diversity risk: the focus on gender diversity means that companies that do not meet the gender diversity threshold of 30% women in senior leadership will be excluded. Those companies may outperform the companies within the basket.
    3. Sustainability focus risk: the focus on sustainability means that companies with poor ESG (environmental, social, and governance) ratings and certain sectors will be excluded. This may result in less diversification than the broader equity market and may at times negatively impact performance.  

    How to invest

    You can browse through Saxo’s Women in Leadership theme for a list of companies that advance women through leadership positions. 

    Before making any investments, you should consider your investment objectives, risk tolerance and time horizon, and review the available information about the product on the platform.

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