I spent a very uplifting day in the company of some of the top financial brains on Tuesday, at the Financial Services Research Forum in Westminster.
The title of my talk was:
The Rise of The Sheconomist: Why Women are a Wise Investment,
in which I discussed the financial capabailities of women.
It boiled down to this.
Women are as good with money as men. In some cases they’re even better. They get higher returns on investment, for example. And companies with women leaders have a 35% higher return on equity.
But men tend to over-rate their own capabilities. And women under-rate theirs!
Little wonder then, with all the other societal factors that come into play, women have been marginalised when it comes to money.
However, we're soon to see a shift in financial responsibility from the state to the individual and women will need to be more financially self-reliant and assume greater financial responsibility. It’s vital to ensure they rise to the challenge and not become second-class financial citizens. That’s what Sheconomics is all about.
|Pine, 2010, The Rise of The Sheconomist|
When women’s skills are harnessed at an organisational level for example, it improves a company’s bottom line and gives them a competitive advantage. There’s lots of evidence for this, but one study by Pepperdine University found:
When a company had at least 3 women on the board of directors it outperformed the competition on all measures by at least 40%.
Norway saw the sense in this years ago, other countries are catching on more slowly.
Legislation in Norway in 2003 made it mandatory for every state-owned company to fill 40% of board seats with women by 2006, and for public companies to do so by 2008.
I wonder if there’s a link between Norway’s decision and the fact that the coutnry enjoyed 3% economic growth in 2009 and an 11% budget surplus, while much of Europe was in economic decline?
Could a recipe for the success of corporates be:
Add three females and watch profits rise?
If you want to read my full report on this download it from the Recent Talks section on our website.
The 30% Club
With perfect timing, the 30% Club was announed on the same day. This is a fantastic new inititative encouraging UK companies to aim for at least 30% female representation on their boards by 2015.
The initiative was founded by Helena Morrissey, CEO at Newton Investment Management and comprises a group of senior businesswomen. Go girls!
Read more about their progressive and impressive move here