Bloomberg Launches Service To Rate The Financial Sector According To Gender Equality

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We are all familiar with the gender equality that exists in many different industries, whether it be the tech, engineering, or even film industries, the gap is well and truly alive. But thankfully, with more and more studies being released as well as initiatives to combat this problem, awareness is also on the rise.

In the corporate business sector in particular, we have to give huge props to Facebook COO Sheryl Sandberg, whose book ‘Lean In’ and subsequent movement of the same name has really ignited conversations around how women can greater participate and take up leadership roles, while making men aware of the masculine-driven leadership styles that do not necessarily leave room for feminine leadership skills.

The tech world has seen a host of many well-known brands releasing diversity reports in order to stay accountable to the consumers who keep their lights on every day. With the abysmal knowledge that women and minorities make up a small percentage of overall roles, and even less in leadership and engineering positions, it’s clear we still have a long way to go.

In the financial sector, there have been some interesting bits of data which have become fantastic evidence for closing the gender gap. A number of studies over the past few years have showed that companies with more women on their board had much more favorable returns. Meaning, the more diverse a company’s leadership is, the more money they are going to make.

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Of course, we shouldn’t be looking at women and minorities simply as a means to make a profit, the point here is that when you have a diverse range of perspectives, voices and leadership styles leading a business, the better equipped they are to deal with a variety of factors including awareness of various customer needs and how to foster employee loyalty.

Famous businessman and ABC’s ‘Shark Tank’ investor Kevin “Mr. Wonderful” O’Leary has even backed up this claim by sharing information about his own portfolio. He says that over 50% of the businesses he invests in are run by female CEOs, and the female-run businesses often bring in greater profitability than the male-run ones. He certainly has no care for gender equality like an activist would, he is simply going by the numbers and what makes the most business sense.

Recently, Bloomberg launched an idea that could potentially increase the number of women on boards of companies. The Bloomberg Financial Services Gender-Equality Index is specifically geared toward the financial industry, and it scores a company based on how they prioritize gender equality and treat the women who work for them.

Programs like paid family leave and and flexible work arrangements make up a whopping 70% of the score according to The Atlantic, but the index also scores a company based on whether a company has product offerings geared toward women and community engagement.

“Currently the BFGEI only includes public companies with a market cap larger than $15 billion; the data itself comes from a survey companies volunteered to fill out. The inaugural list featured 26 financial firms that scored above the 60-point threshold required for a company with strong commitments to gender equality,” writes Bourree Lam at The Atlantic.

The idea is based on the Environmental, Social, and Governance (ESG) indexes, which were established for investors who care about environmental and corporate social-responsibility issues, yet another timely and important issue to keep corporations accountable about.

Founder and namesake Michael Bloomberg said the gender equality index idea came about from the growing trend of investors asking for this type of data as it has become an important benchmark of many industries.

“The big money managers really are interested in gender equality, in the environment and what companies are doing about that, how open they are about recruiting people from all different backgrounds, from all over the world,” he said at the launch event in New York.

The gap in leadership is not something to gloss over, but what makes it worse is that it’s not necessarily common knowledge, according to a recent study from the Rockefeller Foundation titled ‘Women In Leadership: Why It Matters’. Polling 1,011 adults online revealed that 9 in 10 surveyed think there are more women leading major companies than the 20 who actually do.

Fast Company’s Lydia Dishman writes that this high number is surprising, given that 1 in 4 participants reported they had no women in leadership positions at their current employer and only 34% thought that their employers were placing a high priority on putting women in those jobs. One in four also said they believed there was a greater likelihood that humans would colonize Mars than get gender parity in the C-suite…

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An overwhelming majority (90%) of those surveyed agreed that traditions and expectations for male leadership hold women back from full representation, and only 40% think women should make up at least half of the top executives at these major corporations.

“Other preconceptions also play a role, including women being seen as prioritizing family over career (89%), and the perception that women are less effective leaders than men (78%),” said the study.

An interesting aspect of the study, when asked what would create meaningful change, 84% of survey respondents placed the responsibility squarely on businesses to attract and retain talented women for leadership roles. As a result, the Rockefeller Foundation have launched their own initiative, “100×25”, where the goal is to get 100 women CEOs in Fortune 500 companies by 2025. They are encouraging both male and female CEOs to make a commitment to bring more women into leadership positions.

Currently, only 5% of Fortune 1000 companies have a female CEO, yet they generate 7% of the Fortune 1000’s total revenue and outperform the S&P 500 index during the course of their respective tenures. Research firm Catalyst reports that women only make up 4% of CEOs in Standard and Poor’s 500.

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It seems there is an industry-wide trend toward focusing on ways to make leadership more gender equal and foster loyalty among employees by offering greater benefits to support families and women. America is the only industrialized nation in the world not to have any form of federally-mandated paid family leave scheme, which can be a huge disadvantage and source of stress to many women as they progress throughout their careers.

The Bloomberg Gender Equality Index is a great start to force companies to address issues of inequality throughout their company, despite the fact that it is voluntary. There is no doubt that the companies who have a low percentage of women in leadership will avoid getting involved, but the more businesses make internal data like this available, perhaps it will soon become an expected standard industry-wide.

“Evidence demonstrates that gender-equality policies and practices can affect a company’s financial performance, productivity, and ability to retain top talent. While more and more firms are focused on addressing gender equality in the workplace, we’ve lacked a holistic set of data to better understand the issues facing companies, employees and clients,” said Angela Sun, the head of strategy and corporate development at Bloomberg and one of the leads on BFGEI.

Take a look at the video below to learn more about Bloomberg’s Gender Equality Index below:

4 Comments

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