03/07/2017 11:23 EST | Updated 03/07/2017 11:23 EST

For Women, The Bell Tolls

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Business woman versus man corporate ladder career concept vector illustration. Gender inequality issue with different opportunities for males and females. Eps10 vector illustration.

Across capital markets, 40 stock exchanges will be ringing in International Women's Day (IWD) as part of the Sustainable Stock Exchanges initiative. The opening bell, which ceremoniously signals commencement of trading activity for the day, will also ring out for "the pivotal role the private sector can play in advancing gender equality to achieve the UN's SDG 5."

In 2015, 193 UN Member States adopted 17 Sustainable Development Goals (SDG) of which Goal 5 sets out to achieve gender equality and empower all women and girls. Advancing this mandate is UN Women, whose IWD theme this year is "Women in the Changing World of Work: Planet 50-50 by 2030."

And indeed, the working world for women is changing, however, not as one might have expected. The World Economic Forum's Global Gender Gap Report for 2016 highlighted two troubling trends. In the area of economic gender parity, that is salaries, participation and leadership, progress worldwide "has slowed dramatically with the gap -- which stands at 59 per cent -- now larger than at any point since 2008." Secondly, not only has progress slowed, it has "reversed since then, having peaked in 2013." Most notably by region, North America is trending backwards.

In 2016, Canada's overall ranking was 35th, dropping from 14th place in 2006. In the critical category of economic participation and opportunity for women, Canada ranked 36th out of the 144 countries evaluated in the report, down from 10th place in 2006. Under economic leadership, Canada scored a value of 0.73 for "ability of women to rise to positions of leadership" and 0.27 for gender parity on boards of publically traded companies with a 21 female to 79 male ratio.

In parallel, the US ranked 45th overall in 2016, dropping from 23rd place in 2006. Economic participation and opportunity for women ranked the US 26th out of the 144 countries, down from 3rd place in 2006. Economic leadership scored the US a value of 0.73 for "ability of women to rise to positions of leadership" and 0.24 for gender parity on boards of publically traded companies with a 19 female to 81 male ratio.

Why has progress towards gender equality slowed and in some regions reversed on the economic front? Christine Lagarde, International Monetary Fund chief, articulated it well during a World Economic Forum panel on Disrupting the Status Quo of Gender Roles.

"We have improved gradually a little bit over the last two decades. But in the last few years, that progress has slowed down," stated Lagarde. "I personally think that economic hardship is not conducive to tolerance, is not conducive to making space, is not conducive to encouraging the inclusion which is needed for women to participate at an equal level."

And how has the post-2008 financial crisis economic headwinds impacted the female labour market? If we look at the industry in the centre of the maelstrom, the data validates the trend. According to the global management consultancy Oliver Wyman's Women in Financial Services report, "Female representation is growing on financial services boards (20 per cent in 2016) and executive committees (16 per cent in 2016), but progress is slow. At current rates of growth, financial services globally will reach 30 per cent female executive committee representation by 2048 only. Moreover, progress seems to have slowed in some geographies, compared to what we found out in 2014."

So we know that progress is slow -- and slowing -- despite compelling evidence that points to positive financial performance for companies with female representation on boards and among senior management. In fact, recent research conducted by MSCI concluded that "U.S. companies that began the 2011-2016 period with at least three women on the board experienced median gains in Return on Equity (ROE) of 10 percentage points and Earnings per Share (EPS) of 37 per centt. In contrast, companies that began the period with no female directors experienced median changes of -1 percentage point in ROE and -8% in EPS over the study period."

MSCI also "found fewer instances of governance-related controversies such as cases of bribery, corruption, fraud and shareholder battles" among gender diverse boards. "Companies with board gender diversity in the bottom quartile against their country's average gender diversity suffered 24 per cent more governance-related controversies than average (normalized for market capitalization) between 2012 and 2015."

Furthermore, Morningstar's Fund Managers by Gender - Global Landscape Study found that female portfolio managers were more likely to invest sustainably. "Our study finds a couple of characteristics that may be associated with better investing practices. For example, we find that funds run by women generally have lower turnover ratios, which generally results in lower costs and better investing outcomes." The research also noted that, "one in five funds has at least one manager who is a woman, a figure that has not improved since the global financial crisis of 2008" and that "in some asset classes, women fund managers are more-credentialed than men, yet they're still broadly underrepresented in fund portfolio manager ranks."

This only serves to reinforce the World Economic Forum's view that, "the world is facing an acute misuse of talent by not acting faster to tackle gender inequality, which could put economic growth at risk and deprive economies of the opportunity to develop."

Although such movements as Girls Who Invest - a non-profit dedicated to increasing the number of women in portfolio management in the asset management industry and to have 30 per cent of the world's investable capital managed by women by 2030 -- as well as the 30% Club -- a global group with the goal of increasing proportion of women on boards to 30 per cent -- are attempting to address the gender disparity head on, the private sector continues to be a sleeping giant. A giant that will have a rude awaking with shifting demographics, as "women represent a growth market bigger than China and India combined--more than twice as big, in fact."

Ultimately if we are to achieve the UN's SDG Goal 5 and UN Women's Planet 50-50 by 2030, we will all need to do much more than bell ringing.

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