The 10 Best (and Worst) Companies for Gender Diversity in America
OpenInvest and HIP Investor have combined forces to rank the best (and worst) companies for gender diversity in America. If you’re a woman in the corporate world, you probably want this info, but we want to equip conscious investors (and consumers) with the best data so they can take informed action. Nothing sends a signal like moving money. And there is substantial evidence that gender diversity in corporate leadership is a strong indicator of financial performance.
While women now comprise 47% of the workforce, only 4% of S&P 500 companies have female CEOs, and only three of those have achieved gender parity or better on their boards (American Water Works, Alliant Energy, and Hologic). A significant overall wage gap also remains throughout organizations. HIP Investor and OpenInvest therefore analyzed the 500 largest American companies to find the firms with the best (and worst) ratios of women on the board, women as managers and women on staff.1 We then combined these statistics into an overall score in order to rank the 10 best (and worst) companies for gender diversity in America.
The top firms include retailers Macy’s, TJX, Gap, Tiffany and Target, as well as beauty products firm Estee Lauder Leaders also include insurance firm Aetna, apparel conglomerate PVH, bank Wells Fargo, and health care firm Humana. Special mention goes to the board of TJX (TJ Maxx/Marshalls),2 chaired by Carol Meyrowitz, which has been recognized six years in a row as a 2020 Women on Boards Honor Roll Company.
We found the lowest female representation in railroad companies Union Pacific and CSX, materials giant Martin Mariett, mining corporation Freeport-McMoRan and industrial gas supplier Praxair. This is consistent with Credit Suisse’s finding that business-to-business companies tend to have lower female representation than consumer-facing brands.
Source: company websites; CSR reports; Thomson Reuters; HIP Investor analysis
Did you know that gender diversity in corporate leadership has been found to be an indicator of strong financial performance? Scandinavia’s biggest bank Nordea recently studied over 11,000 companies and found that those with female leadership outperformed over the last eight years. Credit Suisse, among others, has found similar results for companies with female board representation. It turns out there is a lot of evidence “that when companies commit themselves to diverse leadership, they are more successful.”
What can you do to spur more gender diversity? CEOs and boards work for their shareholders. So while actions speak louder than words, investment actions speak loudest of all! Isn’t it time we put our money where our mouths are? You can reward the leaders and send a major signal by aligning your investments with your values. HIP Investor offers 75,000 impact ratings — where gender diversity is a strong factor — of stocks, bonds and funds, as well as managing investment strategies for investors and 401(k) plans. OpenInvest makes it easy to launch a comprehensive portfolio that incorporates your values, including gender equality, with a click.
For any stock you own, you can also vote on who gets elected to the board – so you can vote for qualified candidates when they come up. For those firms who are lagging, write to the CEO, Board and Investor Relations to ask for reporting on gender diversity and request a more diverse Board. You can send them this list!
Disclaimer: OpenInvest and HIP Investor are registered investment advisers. Investing is inherently risky. This is not an offer of securities. Past performance is not indicative of future results.
1. The data was collected directly from company websites and annual reports. Only 88 firms report all three ratios, so while the top 10 are leaders in open information on actual performance, the laggards at least get credit for being transparent about these statistics. We aggregated these indicators by blending the three metrics together equally for a total score and ranked them from highest to lowest.
2. Official corporate name is TJX, which owns TJ Maxx, Marshalls, and other retailers