Dialogue & shareholder engagement
A large gap remains in most companies between the proportion of women in management and in the workforce. The presence of women in executive positions is key to advancing gender equality, an economic and social imperative. Sycomore AM publishes a review of its shareholder engagement and dialogue actions on the theme of professional equality between women and men.
Read our report "Dialogue & shareholder engagement - Gender equality in the workplace"
While the proportion of women sitting on boards of directors has risen considerably these past few years, particularly in Europe thanks to the introduction of regulatory requirements, women still remain largely absent from executive committees. In most companies, a wide gap also persists between the percentage of women in intermediary management positions and those in the overall headcount.
Although the issue has received rising attention, the latest statistics show that improvements are slow. The percentage of women in various management roles has only marginally increased in recent years.
Large disparities also persist between business sectors and roles: based on the most recent study conducted by the Credit Suisse Research Institute $$Credit Suisse Research Institute , “The CS Gender 3000 in 2019: The changing face of companies” – research conducted on 3100 listed companies of Credit Suisse Research coverage in 56 countries worldwide (36% Asia ex Japan, 31% North America, 23% Europe, 6% Japan, 5% Latin America) https://www.credit-suisse.com/about-us-news/en/articles/news-and-expertise/cs-gender-3000-report-2019-201910.html$$, it appears that 55% of Human Resource Directors within the sample are women, but only 14% of Information Systems Directors are female. Yet the presence of women in executive roles – more than on the board of directors – is an essential driver for the promotion of gender equality throughout the company.
Data obtained by the Credit Suisse Research Institute, based on over 3,000 companies, has also shown that in companies run by a woman, the likelihood of the CFO or Business Unit Manager also being a woman is 50% higher than in male-run companies. $$Credit Suisse Research Institute, “The CS Gender 3000: The Reward for Change”, 2016. https://www.wgea.gov.au/sites/default/files/documents/csri-gender-3000.pdf$$ “Role models” also contribute greatly to fighting stereotypes stereotypes that can become crystallised at a very early age: it is generally believed that gender stereotypes now influence children’s’ career aspirations as early as 7$$Education and Employers, “Drawing the future”, 2018 https://www.educationandemployers.org/wp-content/uploads/2018/01/DrawingTheFuture.pdf$$.
We have observed this underrepresentation of women in executive roles in most of the companies we invest in. In 2018, the average percentage of women on corporate executive boards stood at 15% for the SRI funds within our range, and close to 14% for EuroStoxx index companies$$Bloomberg data$$. As a shareholder, this situations is cause for concern at several levels: it means that the development of many talents is hindered and that companies are not fully benefiting from the widely-recognised positive impact of gender equality on the performance of organisations, and more broadly, of the global economy. To quote just one figure, the McKinsey Global Institute estimated that a “best in region” scenario in which all countries match the rate of improvement of the fastest-improving country in their region could add as much as $12 trillion in annual GDP by 2025. $$McKinsey Global Institute, “The Power of Parity : how advancing women’s equality can add $12 trillion to global growth”, 2015 https://www.mckinsey.com/featured-insights/employment-and-growth/how-advancing-womens-equality-can-add-12-trillion-to-global-growth$$
These figures are also indicative of the efforts that lie ahead in attaining the fifth United Nations’ Sustainable Development Goal, and in particular target 5.5: “Ensure women’s full and effective participation and equal opportunities for leadership at all levels of decision-making in political, economic and public life”. To quote the United Nations, “Gender equality is not only a fundamental human right but a necessary foundation for a peaceful, prosperous and sustainable world”. In this respect, the issue is inherent to the concept of sustainable investment.
Read our report "Dialogue & shareholder engagement - Gender equality in the workplace"