“Gender diversity” pays off for companies and investors

Women are still underrepresented in leadership positions. Targeted investments in companies committed to diversity could change that, say Audhild Aabø and Julie Bech of Nordea Asset Management. Moreover, they are also worthwhile from a financial perspective.

The issue of gender diversity stirs the emotions. Measures to reduce gender inequality are discussed, but only hesitantly implemented in practice. This is evident in most companies: The higher the hierarchical level, the fewer women are found. According to the latest edition of the schillingreport, in 2019 the proportion of women on the management boards of the 100 largest Swiss companies was 10%, while the figure for SMI groups was 12%. And this despite the fact that women often form the majority of students at universities. "So a lot of talent is being lost on the career ladder", notes Audhild Aabø, co-manager of the Nordea Global Gender Diversity Strategy. Therefore, it does not accept the argument of many companies that they cannot find suitable qualified female candidates. After all, he said, there are still hidden prejudices that put obstacles in the way of women, not only in the recruitment process but also in everyday working life.

Competitive advantage through diversity

This is not only a problem for women, but also represents a missed opportunity for companies: "The main argument for diversity in companies is the correlation between gender diversity on the one hand and company success on the other, according to Aabø. Studies would have shown that diversity is a critical factor in not only attracting but also retaining the greatest talent in the labor market and not losing it to competitors. In addition, the different perspectives help to be more innovative. Last but not least, the decision-making processes are more efficient thanks to improved cooperation. "All this gives companies that value diversity a competitive advantage", says Aabø.

Microsoft as a showcase

A look at the world's largest companies reveals a lot of catching up to do when it comes to diversity. But Microsoft shows that it can be done differently: the twelve-member Board of Management includes five women, and training courses on diversity are offered throughout the company. Employees also benefit from twelve weeks of paid parental leave. "When selecting investment targets, we consider not only the liquidity ratios of companies, but also their ESG measures and – not least – their diversity", explains Julie Bech, co-manager of the Nordea Global Gender Diversity Strategy. Finally, this factor also promises a better performance, which is why such investments are also worthwhile from a financial perspective.

"S" of ESG becomes more important

When it comes to ESG, most of the time the "E" is there, i.e. the environmental aspect, in the foreground. "The desire for sustainability is now firmly entrenched in society, which has increased the demand for sustainable investments. Now it's much easier for sustainable companies to raise capital on the markets, which of course pays off for them", explains Aabø. This has made the economy greener overall.

With regard to diversity, she assumes a similar development and therefore expects that in the future, the "S" of ESG is likely to become more important. "If investors invest in companies that are committed to diversity, it will lead to a fairer and more equal society", Aabø is safe.

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