A recent effort by business leader Sallie Krawcheck epitomizes putting your money where your mouth is. The bigger the mouth, the better the take, so Krawcheck has enlisted the help of top female leadership at companies like PepsiCo and Lockheed Martin, companies which have demonstrated a commitment to women in positions of leadership and management.
Here’s the deal. Sallie Krawcheck, former an executive with Citi, Bank of America and Smith Barney, has moved on to investing financially in companies that put women at the top. She is partnering with the investment firm Pax World Management to launch an index fund, which will invest in companies with high percentages of women in management and on governing boards. Although the research has shown for years that diversity in management leads to better performance over time, this is the first time that the theory has been tested by investing in the top 400 companies in the world, all part of the Pax Global Women’s Leadership Index, in terms of commitment to women as corporate leaders. For more information on the venture, see the June 8, 2014 Washington Post article.
As further evidence of her dedication to women, last year Krawcheck purchased 85 Broads, a professional women’s network, and is repackaging it as the Ellevate Network. The problem that Krawcheck is addressing in both of these endeavors is that, on average, women make up about 20 percent of board seats at Fortune 500 companies and just 14.6 percent of executive officer positions, according to the research firm Catalyst. These figures do not square with a recent report from Credit Suisse based on a survey of 2,360 companies. The survey results showed that companies with women directors out-performed those without female board members on a variety of financial and earnings criteria.
So, isn’t it about time that law firms got the message? It is hard to argue with those statistics, and also hard to argue that they would not apply in the law firm setting, where fewer than 20% of women are partners. There is a demonstrated benefit to having strong female representation in the leadership suite, and it even has been showed that diverse teams outperform more capable teams in terms of skills.
Onward and upward. If you are looking for a good investment for your deep pockets Aunt Maude or Uncle Charlie, be sure to aim them in the direction of the Pax Global Women’s Leadership Index. Is it a sure winner? Who knows? That remains to be seen. But, think about the fact that the global public-based financial aid made available to households in developing countries often is pledged specifically to the women of the households. Those women are motivated to improve the lives of their families, and they will move Heaven and Earth to do it. They are hard workers, capable of multi-tasking, tough taskmasters, and they are goal-oriented. They appreciate a minority opinion, and they know how to compromise. If governments and government collaborations around the world can see that, so can the leadership of law firms.
We can only hope … and pray!
