Ten years of research on gender diversity suggests that providing more opportunities for women increases a company’s market performance and unleashes untapped economic value. Aligning global gender equality initiatives with private sector goals has the potential to advance the position of women in business.
Joe Keefe is President and CEO of Pax World Management LLC. He is a UN-recognized advocate for women’s equality and implements change by encouraging investors to align their investments with their values by supporting global organizations that promote the empowerment and advancement of women. In partnership with Sallie Krawcheck’s Ellevate Asset Management, Joe launched The Pax Ellevate Global Women’s Index Fund, the first U.S. mutual fund focused solely on investing in the highest-rated companies in the world in advancing women. He is the recipient of the United Nations’ 2014 Women's Empowerment Principles Leadership Award - Business Case for Action.
Why is it important for companies to take gender equality issues into account when directing resources and opportunities?
It’s a moral and economic imperative to take gender equality issues seriously. It doesn’t make sense to discriminate against half the world’s population nor is it feasible to disregard so much untapped business value.
Over the last ten years, a compelling body of research has emerged regarding the impact of women in business and more specifically the placement of women on boards. It’s been proven, companies with women serving on their board outperform companies whose boards are less diverse. Research suggests diversity matters to the bottom line.
How is gender equality linked to sustainable development and human rights?
At the most basic level, gender equality is the great human rights issue of our time. People often ask me, “As a man, why do you care?”
Isn’t it obvious? The problem has not been solved on a global level. There is still a system of Jim Crow laws or apartheid when it comes to women and girls. The fact remains that honor killings, genital mutilation, and systemic rape continue to happen. It’s a fact that there a places in the world where girls are not allowed to go to school and get an education.
In the United States, the conditions don’t fall into that extreme. However, women only hold 17% of the board seats and they make only 78% of what a man earns.
Gender equality can be connected to sustainable development in many ways. The most obvious way is by relating it to economic challenges. Organizations that do not have diverse leadership are missing out on great opportunities.
How much value is locked up inside these patriarchal structures around the globe? If companies tapped into this value by hiring, training, and promoting women, it would unleash the greatest period of economic growth the world has ever seen.
How does gender equality relate to sustainable development? It relates by unlocking untapped economic value that is a result of educating girls, providing equal opportunities, equal wages, and equal opportunity to rise to leadership positions in the private and public sectors.
How do culture and gender affect the way a country or a company implement gender policies and laws?
Culture and gender have a tremendous effect on laws and organizational norms. In many parts of the globe when you raise issues about gender equality, there is push back. The response is, “Don’t mess with our traditions or our culture.”
Inequality and oppression often hide under the cloak of culture, tradition or religion but it needs to be addressed just the same.
Part of our mission has to be going to men in these inequitable systems and explaining how they are penalizing themselves by not being more inclusive to women.
There is a sea change happening that wasn’t there ten years ago. Culture and tradition will succumb to economics and the need to modernize. Gender equality can be understood by the public as a vital economic issue.
Are there laws in place that are being expanded to protect women from discrimination?
I don’t see the public sector leading the charge on these issues. The boldest and most innovative changes will come from the private sector. The private sector is where we will see real progress made on gender equality issues.
If the greatest brands in the world made it clear that gender inequality is no longer acceptable, then people around the world would take notice.
If people see global capitalism and markets promoting gender equality then it will no longer make sense to hold women back. Companies and markets would advance and the untapped value and potential women have to offer would be available.
More progressive laws could always find their way to the books but the business corporation is everywhere and I believe can have the most impact. Let’s use the power of markets to make tremendous progress on these issues.
What are the 3 biggest gender equality issues PaxWorld is helping to tackle?
Our biggest mission is to bring greater board diversity to companies and promote better market performance through gender equality and diversity.
It’s quite a statement regarding gender diversity and equality when only 17% of board members today are women. By promoting more women to the board, companies make a symbolic as well as a practical statement. It means the board believes that the company will be stronger if they elevate women into these roles.
One thing I hear often is that there isn’t a pipeline of women ready for those positions. I don’t believe that. Most often, boards are made up of men who had senior positions in the corporate sector or worse, golf buddies.
There are plenty of qualified women to choose from and there are plenty of women who are CFOs, heads of marketing, finance, and manufacturing. There is a pipeline.
For example, when we conduct a search for a new position within our firm, women have to be in the finalist pool. This makes our search firms work harder to find qualified women but they do it to meet our needs. This teaches the search firms to conduct better searches and achieve better results when placing women on boards. The firms might have to look a little harder but there are plenty of qualified women available for board positions.
How do you measure the progress of gender equality programs and year after year success?
We start by defining how the programs have made the business or fund a better investment for stakeholders.
Putting metrics around issues like gender equality and opportunity can be challenging when we look beyond the pure numbers of how many women were placed in key positions.
For a company to measure whether it benefited by adding women to the board is tough. It takes time to measure performance year over year. We also need to look globally for measurements involving how many women were added to supply chains or a workforce in emerging markets. It depends on the type of initiative we are tracking.
How does the Pax Ellevate Global Women’s Index Fund help women around the world advance their positions in business?
The Fund will over time corroborate the data on women advancing the bottom line, companies with diverse leadership teams performing as well as or better than market expectations, and how that all aligns with stable or increased revenues.
We are a long way from this but the goal is to get women on parity with men. When that parity is achieved there will be minimal to no performance advantage for a corporation and everyone’s contribution will be equal to their contribution as an individual.
Think about it, if you are a firm with three women on the board and you have 25-30% women serving in key leadership roles, it is a well-researched and documented fact that your company has a better chance to perform better.
The Pax Ellevate fund was constructed to measure that advantage and to deliver what we hope will be stronger long-term returns to shareholders. The fund’s objective is to have a positive effect on gender issues and to create incentive for more companies to put women in key leadership roles. This positions companies for more success and better returns. Markets over time will reward companies for better management and having more women in leadership positions is simply better management.
What steps can companies take to improve gender equality issues within their own companies?
It’s critical that companies develop a strategy that assures women are given due consideration for all board and senior management positions. Targets need to be set for leadership roles and diversity across the organization.
Promoting women into leadership not only will increase a company’s financial position, it sends a symbolic message and sets the tone for your organization. It also sends a signal out into the market that demonstrates a company’s support for gender equality issues. Corporations and markets are a very important communications platform for promoting gender equality more broadly in the world.