Andrea Dietrich Murray, co-head of Women in ETFs in London, and Deborah Fuhr, co-founder of Women in ETFs, have warned female exclusion from leadership roles is harming business growth, however, there is a roadmap for improvement.
Women in ETFs, which has been ringing the bell for gender equality across more than 100 exchanges on International Women’s Day, is now an organisation of more than 6,500 members spanning across the US, EMEA, Canada and Asia-Pacific regions.
Speaking to ETF Stream, Murray (pictured left) said the non-profit’s core function is to act as a point of contact for members of the ETF community across the globe, to network and advance their shared goal of gender equality within the industry.
“As an organisation, Women in ETFs champions the goals of equality, diversity, and inclusion. Our mission is to develop and sponsor talent, recognize and honour the achievements of women in the industry, and invest in the ETF community,” Murray said.
According to S&P Global, these goals are not just worthwhile for society, but also for businesses’ bottom lines. The organisation said at present, women across all sectors earn just 83% of what their male counterparts earn for performing the same roles.
Likewise, it added that equalising gender participation within the workforce could add $5.9bn to the value of the global stock market over the next 10 years.
Fuhr (pictured right) explained the reasons for this are twofold. First, companies that embrace gender diversity at all levels can leverage both a broader range of perspectives and talent, to find new ways of solving problems.
Furthermore, equal inclusion of genders – or lack thereof – is a notable risk factor for companies. Those that do not comply with diversity regulations are not only breaking the law but could incur financial ramifications as a result.
The World Bank’s International Finance Corporation (IFC) also said gender-diverse boards have a positive impact on companies’ sustainability profiles among other factors.
“Benefits include improved financial performance and shareholder value, reduced risk of fraud and corruption, increased customer and employee satisfaction, greater investor confidence, and enhanced market knowledge and reputation,” the IFC said.
Top-down and bottom-up response
In Murray’s view, positive changes such as female inclusion and equal pay can only come about through action at the management level, and by individuals.
“One of the key issues is the need for change at the top. Change has to occur from the top down – we need to see more women on boards, in upper management, and receiving equal pay if you want to attract more women and minorities,” Murray said.
Murray added women in the ETF industry must also be proactive in seeking out opportunities. For instance, she said women must be vocal about the changes they want to enact and be decisive in taking career opportunities and making good connections.
Murray continued: “If I had the opportunity, I would tell my younger self that you should always negotiate your salary and be tactical with finding the right mentors – and a term I have heard recently, career sponsors.”
Equality requires accountability
Murray and Fuhr both agreed that trends such as ESG have helped advance not just goals of sustainability and corporate responsibility but have also encouraged companies to take diversity and inclusion more seriously.
“With all of the focus particularly on inclusion as well as just general ESG ETF trends, firms really are inspecting the governance side of the business and trying to correct any deficiencies,” Murray added.
However, new opportunities bring with them new challenges. One such challenge, Fuhr said, is the issue of collecting complete and consistent data. Only with complete data can investors and product issuers have a true sense of which companies are either succeeding or have concrete plans to tackle their internal inequalities.
Already, those doing their due diligence face the challenge of greenwashing, as some companies tout areas of progress to mask their failures. However, during the height of the Coronavirus pandemic, the goal of complete data suffered another setback.
With the benefits of data reporting having been reflected – with female representation on boards having risen over the past decade – Liz Truss, UK minister for women and equality, and the Equality and Human Rights Commission, decided to waive companies’ obligation to report on gender pay in 2020.
In February, the UK government added that the decision to suspend reporting for an additional year was under review.
Fuhr said such measures were contrary to the goal of gender equality within businesses. Consistent data reporting helps regulators and the public put pressure on companies and helps data houses build indexes which accurately reflect companies’ actions regarding the treatment and inclusion of their female staff.
What is required, Fuhr said, are uniform reporting requirements, with data gathering conducted by external, impartial bodies.
"Ultimately, I am positive that improvements are afoot and we will get there," Murray concluded.
