Panel
Undercapitalization: Closing the Gender Growth Gap Across Industries
Milken InstituteKatie O'Reilly, Jesse Draper, David Jeffrey, Megan McDonald, Mina Pacheco Nazemi, David Warren, Mindy Silverstein, Tracy Briscoe Monroe
- Standard Bank targets increasing board representation of women from 22% to 33% and female chief executives (specifically women of color) from 10% to 20% by 2021.
- Without active intervention, the current trajectory projects 30 to 50 years to achieve gender parity, a timeframe that may be prolonged by 30 to 40 years if men are excluded from the conversation.
- StepStone anticipates diversity and inclusion will shift from a "side stream" to "mainstream" within two years, with the broader market potentially making it a general discussion topic shortly thereafter.
- DW Partners reports challenges in recruiting women, evidenced by a recent hiring cycle where only three of 100 resumes were female.
- Halogen Ventures projects billions in exits for its portfolio following $200 million in exits over the last six months and plans to continue funding women in technology.
- A 10-year study indicates that 40% of women in diverse funds performed in the first quartile, suggesting diverse funds generate alpha.
- Standard Bank plans to hold managers accountable for diversity metrics, including compensation and carry structures, on an annual basis post-investment.
- The LP community is expected to increasingly demand diversity at the investment manager level, with some pension funds reacting strongly to diversity data.
- The market is expected to discount companies lacking diversity credentials, particularly those seeking to go public.
- Women who leave the workforce after childbirth face difficulties re-entering, creating an underutilized talent pool that firms can target for retention.
- White male sponsors are expected to exert a disproportionately powerful effect on women's career progression compared to female sponsors in male-dominated environments.
- Flexible working hours are identified as necessary for retaining women, as traditional banking cultures are often incompatible with family needs.
- Women are expected to remain primary breadwinners, necessitating continued fundraising and business development activities.
- Cultural and geographic nuances present varying challenges, with China showing higher diversity in private equity than the U.S. or Southern Europe, while European maternity leave policies sometimes correlate with fewer women in senior positions.
- Some managers may perform extremely well despite being undiverse, though diversity remains a risk mitigator and a factor in investment decisions.
- StepStone and the "30% Club" and "Level 20" initiatives aim to incrementally increase female representation in senior roles to 20% in the private equity sector.
- Institutionalizing diversity policies is expected to ensure continuity when current CEOs or CIOs leave the organization.
- Standard Bank expects proactive diversity surveys and cultural due diligence to identify and mitigate risks associated with poor management practices in potential portfolio companies.
- The "30% Club" and "Level 20" initiatives expect to incrementally increase female representation in senior roles to 20% in the private equity sector.
- The wage gap is expected to be most pronounced at senior levels and among the wealthiest, partly due to an economy that over-rewards overwork.
- Men may avoid informal professional networking with women due to fears of accusation or misinterpretation, while women who found their own firms are expected to create value through strategic flexibility.
- Women in diverse funds are expected to generate alpha, with a 10-year study showing 40% of women in diverse funds were in the first quartile of performance.
- Jesse Draper expects that 50% of household purchasing decisions are made by women, creating a market opportunity for companies with female leadership.
- DW Partners plans to continue attending global events to advocate for women, noting 20 women have returned to work after having babies.
- Standard Bank expects that without a culture of inclusion, recruiting strategies and job descriptions will be ineffective regardless of the language used.
- Jesse Draper expects that without intentional effort to recruit and invest in women, diversity initiatives will not happen organically.
- The financial sector expects that flexible working hours are necessary to retain women, as the traditional "clock in, clock out" banking culture is incompatible with many family needs.
- European maternity leave policies are expected to sometimes correlate with fewer women in senior positions, highlighting a disconnect between support policies and career progression.