FWSF Diversity and Inclusion Committee Update
By Kim W. Scala, VP, Diversity & Inclusion
It seems intuitive that in a world that’s diverse and interconnected, companies with greater levels of diversity are more likely to have above-average returns. As financial women, many of us often feel an intellectual comfort only when the data align to support the conclusions we may have already reached. Well, the research is convincing — diversity does matter.
In 2015, McKinsey & Company released its seminal research report, Diversity Matters, which looked at the relationship between (i) the level of diversity (defined as a greater share of women and a more mixed ethnic and cultural composition in the leadership of large companies), and (ii) company financial performance (measured as average EBIT over a 4-year period). The research found that companies with great diversity significantly outperform companies with the least diversity.
Diversity Clearly Correlated with Profitability
In a recently released follow-up study, McKinsey confirmed that gender and ethnic diversity are clearly correlated with profitability. In the original study, Kinsey found that companies in the top quartile for gender diversity on their executive teams were 15% more likely to experience above-average profitability than companies in the fourth quartile. In the 2018 report, which was based on an expanded data set, the number rose to 21%. The original study found that companies in the top quartile of racial/ethnic diversity were 35% more likely to have financial returns above their national industry median, and the finding in the 2018 study was just slightly lower.
Despite convincing evidence, however, progress has been slow. Fortune reported in May of this year that of all Fortune 500 company CEOs, only 24 are women. Of the 24, only two are women of color (Geisha Williams, PG&E; and Joey Wat, Yum China). Indra Nooyi, Pepsi Co, just announced she is stepping down in October. Sadly, the number of female CEOs dropped from the 2017 all-time high number of 32 women.
FWSF is committed to the highest standards of diversity and inclusion. We believe that by drawing on the power of our collective differences and similarities, our organization is better able to deliver on its purpose: to advance professionalism in finance and financial services by promoting the development, career progress, and leadership of women, and to help women enter, advance in, and succeed in financial careers.
The Diversity Lens
FWSF’s diversity and inclusion committee has been tasked with ensuring that diversity is the lens through which we see all FWSF activities, and with helping facilitate an environment that feels inclusive to all. Thanks to the vision and strong leadership of our current and recent past presidents, the FWSF board is beginning to mirror the diversity of the Bay area in which we live. Board members bring a wide range of experiences, backgrounds, and perspectives. The board includes over half a dozen young women who are relatively junior in their careers, approximately one third women of color and LGBT members, a number of individuals whose first language is not English, one supportive male voice, and professionals from every area of the finance and financial services industry and most of the seven Bay Area counties.
In addition, the FWSF programs committee has paid particular attention to the mix of speakers, panelists, and topics that it brings to our members, ensuring that our programs appeal to a wide-spectrum of members. Thanks to their efforts and those of the membership committee, FWSF has begun to attract a richly diverse membership base. Later this year, we’ll conduct a membership survey to help identify an actual baseline of our membership. We invite you to participate – it will help us understand who our members are.
The messages we send to our membership and the external world are important. Accordingly, the FWSF marketing and communications committee is paying attention to images and language that reflect all of us. You may have seen the thought-provoking and inspiring quotations that ran on social media platforms celebrating Black history, Asian/Pacific heritage, Pride and financial literacy months. Keep an eye out for more quotes in September when we observe Latinx heritage month.
Finally, if you were lucky enough to attend the International Women’s Day event several months ago, you know we explored a multiplicity of perspectives in that forum. In 2019, the diversity and inclusion committee will spearhead the half-day IWD event in early March. Our kickoff planning meeting is September 19th.
We welcome you to join us in creating a vibrant, diverse, inclusive organization. The diversity and inclusion committee meets the first Monday of each month from 5:30-6:45 at RINA Accountancy, 150 Post Street, Suite 200, San Francisco. Note that the September meeting has been changed to September 19th. For more information, contact Kim Scala at kim@scala-law.com.