Sustainability

Gender equality and why it matters

08 Mar 2023 4 min read

At NGS Super, we are firmly committed to gender equality. We believe that gender equality and diversity more broadly improves investment outcomes.1 While this article focuses on gender equality, one of NGS’s active ownership and engagement objectives, we know that diversity includes ethnicity, age, race, religion, disability and sexual orientation.

As an Industry SuperFund with a majority of female members, we are probably more aware than most of the gender pay gap, the fact that women retire with significantly less super than men, and that women over 55 are the fastest growing group of people at risk of homelessness.

Gender balance at NGS

As an organisation, we are proud to have 50% representation of women on our Board, a balance we have maintained since 2015. Our most recent CEO was a woman, and since Laura Wright’s retirement in 2022, the Acting CEO role has also been held by a woman, Natalie Previtera. While the structure of the team is temporary, pending appointment of a permanent CEO in June 2023, we currently have 4 women and 5 men on the executive. The senior level of our Investments team, reporting directly to our Chief Investment Officer, consists of 5 women and 2 men.

NGS staff who take parental leave have superannuation paid at their full rate for the duration of their leave (paid and unpaid), up to 12 months. Women’s super balances are disproportionately disadvantaged by the fact that they are more likely to take time off work to have and care for children, and compulsory super on parental leave is a vital part of addressing this issue.2

You can read more about gender equality in Australia here.

Gender equality, ESG and the global economy

There is no doubt that the ‘E’ in Environmental, Social and Governance gets a lot of attention, but it’s important to consider the ‘S’ and the ‘G’ also. Gender equality sits in the ‘social’ and ‘governance’ spheres — it’s SDG 5 of the United Nations’ Sustainable Development Goals — and is, above all, a matter of human rights and social justice.

Beyond those fundamentals, however, there’s another strong argument for gender equality, and that is that women are vital to the global economy. Higher participation by women creates a larger, more robust workforce — developed economies with greater female participation have tended to see stronger productivity growth over the long-term.3

Statistical snapshots

  • Studies have found that companies with female CFOs are more profitable and higher gender diversity on Boards also contributes to higher profits.4
  • According to a study by the Boston Consulting Group, companies that have more diverse — across gender, ethnicity, etc — management teams tend to have almost 20% greater revenue due to the innovation brought by more diverse views and ideas.5
  • It’s been estimated that increased female labour force participation in the US could add $5.87 trillion to global market capitalisation in 10 years.6

Gender equality, active ownership and engagement

Gender equality is one of NGS Super’s active ownership and engagement objectives. What this means in practice is that when we complete due diligence (both initial and ongoing) with our investment managers, we look at the gender balance of the organisation as a whole and, importantly, across all levels and areas. So, for instance, an organisation as a whole could have a 50/50 gender balance, but if most of the senior roles are held by men and the junior roles by women, this is clearly not an acceptable gender balance. Where we see gender imbalance in companies that are already within our portfolio, we raise this as an area for improvement.

As well as engaging directly, we use proxy voting. Where male Directors who sit on the nominating committee of a company are up for re-election and there is insufficient female representation on the Board,7 we vote against their reappointment. This sends a clear signal that insufficient female representation at Board level is unacceptable.

1 Ned Davis Research, How women drive the global economy and markets, 10 March 2022. S&P Global Market Intelligence, When Women Lead, Firms Win, 16 October 2019.
2 https://www.womeninsuper.com.au/content/why-is-it-so-important-to-receive-super-while-on-parental-leave/gjktnp
3 Ned Davis Research, How women drive the global economy and markets, 10 March 2022.
4 S&P Global Market Intelligence, When Women Lead, Firms Win, 16 October 2019.
5 Boston Consulting Group, The Business Imperative of Diversity, 20 June 2019.
6 S&P Global, Adding More Women To The US Workforce Could Send Global Stock Markets Soaring, 1 October 2018.
7 Less than 30% female representation for large cap companies; at least one female director for mid and small cap companies.
^ pmc.gov.au/office-women/womens-leadership/gender-balance-australian-government-boards
#www.wgea.gov.au/publications/australias-gender-equality-scorecard

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