Senior Director of Investments and Fiduciary Services
Senior Research Analyst, Social Impact Investing Team

In this podcast, Senior Vice President Beth Opperman and Senior Investment Analyst Claire Veuthey discuss why you should consider the way in which corporations account for the structural impact of gender when analyzing investments for your portfolio.

Audio: Investing Through a Gender Lens (Audio)

Transcript: Investing Through a Gender Lens (Audio)

Host: Beth Opperman, Senior Vice President, Wells Fargo Private Bank
Guest: Claire Veuthey, Senior Investment Analyst, Wells Fargo Private Bank

[Beth]: Hello, this is Beth Opperman, Regional Managing Director for Wells Fargo Private Bank. I am joined on this podcast by Claire Veuthey, a Senior Investment Analyst with our Social Impact Investment team. Claire, the topic of our discussion is how companies that recognize the strength and perspectives of their female employees can have a long-term effect on the performance of an investment portfolio. Can you explain?

[Claire]: Well Beth, in our view, companies that focus on gender equality, particularly concerning employee recruitment and retention, make for better investments. This seems like a sweeping statement to make, but we have found plenty of evidence to back up this claim, including a study by the McKinsey Global Institute from 2012.  

[Beth]: So Claire, how do corporate policies that are supportive of female workers benefit companies?

[Claire]: Well, Beth, there are a number of quantifiable benefits. One of the most obvious is that diversity in recruitment opens up a wider pool of talent. It can also be a sign of better corporate governance and risk management due to the introduction of a broader array of perspectives.

[Beth]: So in other words, greater efforts recognizing the advantages of women in the workforce help a company lessen the types of "group think" that got companies such as Enron and WorldCom into corporate difficulties.

[Claire]: That's right. That is what the evidence suggests, Beth.

[Beth]: So Claire, how would our listeners apply this information to their investment decision-making process?

[Claire]: Well, investors may want to ask their advisor if their portfolio considers factors such as board diversity, women in senior management positions, and pay equity.

[Beth]: Investors may also want to avoid companies with a record of discriminatory behavior, as they could be at risk of lawsuits.

[Claire]: Yes, we look closely at that. And on the other hand, companies that exhibit good employment practices may be good ones to consider including in your portfolio such as those that make Fortune Magazine's list of "100 Best Companies to Work for".

It's also worth noting the growing economic influence that women have on purchasing decisions and the growing number of companies designing products and services with women in mind, all of which indicate companies  truly focused on their customers, which we consider a good sign.

[Beth]: So your key message is that a company's focus on including women and having a female product focus may lead to an increase in long-term shareholder value.

[Claire]: Yes. And Beth, it's simplistic to say that having a female board director, for example, will make a company a better investment in of itself; however, in the view of the Social Impact Investing team, companies that value diverse employee and customer perspectives are more likely to show better problem solving, product innovation, and attentiveness to shareholder requests.

[Beth]: Claire, this is great information for all of us to consider and start thinking about how to apply to our own investments. And for listeners, it's a great time to discuss these questions with your advisor.