Women Empowered for Progress and Profit
By Lauren Morrell
We’ve all heard about the upcoming generational wealth transfer estimated at over $41 trillion that will be passed down to the Millennial Generation by 2040, but a less known fact is that two-thirds of this transfer will end up in the hands of women, according to Audrey Choi, CEO of Morgan Stanley’s Institute for Sustainable Investing.
Ms. Choi joined Barbara Krumsiek, CEO of Calvert Investments, and Julie Gorte, Senior Vice President, Sustainable Investing, Pax World Management to speak on a topic entitled “Women Empowered: For Progress and Profit” at the 25th annual SRI Conference.
Analyses from McKinsey suggests that women manage their money differently. “One of the first things widowed women do is fire their financial advisor,” Choi said. “Women have showed us every indication that they think differently about wealth management.” And, like most millennials, millennial women are generally more aware about the social impact of their investments.
Barbara Krumsiek, President and CEO of Calvert Investments mused, “If I could give this room one piece of advice: get a woman in your practice. Hire one, steal one, train one, get your daughters, your spouse, your niece…”
More than 60% of college graduates are women, and more than 50% of PhDs and Masters’ Degree holders are women. But at the top of the corporate food chain, women represent no more than 16-25% of the workforce, and in a company’s top five paid employees, they are less than 5% on average. Why…?
This panel of highly accomplished women attributed this to what they called the “messy middle”—the barrier of social and corporate norms that make life as a working professional a difficult place to be a woman.
In the office, powerful norms that cater to manhood tend to dominate: a visit from the shoe shiner, but not a manicurist; an hour away for a workout is okay, but leaving to attend a PTA meeting is not. Fully 65% of working mothers with elite undergraduate educations are out of the workforce. This compares to 7% of men. The polite rational offered by women during exit interviews is often something like this: “I want to spend more time with my family,” rather than, “I felt uncomfortable here.”
At Harvard University, 30% of the students are women, but only 10% of students who earn the Baker Scholarship were female. Upon investigation, it was discovered that women were not given the same dignity in calling upon their questions, inspiring confidence in math and finance, etc. Taking responsibility for this culture, Harvard eventually succeeded in getting a 30% representation of women in their Baker Scholarship. “I’ve never seen a company go about that and not blame the women,” Krumsiek remarked.
It’s time for a change of culture everywhere. Since Calvert released their Women’s Principles, which were subsequently adopted by the United Nations, and now have 750 signators, every one of the companies in the S&P 500 has either a woman or minority member on their Board of Directors. Studies have shown that diverse groups make better decisions, because they have to reason for their point of view, heightening the intellectual wisdom of the dialogue and the outcomes.
At First Affirmative, we understand that the ways we save, spend, and invest can dramatically influence both the fabric and consciousness of society. We believe that in addition to the benefits of ownership, investors bear responsibility for the impact our money has in the world. Are you making conscious decisions about the impact of your consumer purchase and investment decisions?
Mention of specific companies or securities should not be considered an endorsement or a recommendation to buy or sell that security. Past performance is no guarantee of future results.
Posted: May 1, 2015