An index-led push for Swiss gender workplace equality
In February 2021, Switzerland celebrated the 50th anniversary of women’s voting rights. In comparison with the U.S., Germany, and the UK, for example, this came about 50 years late; they all introduced voting rights for women between 1918 and 1920 (although not everywhere, or for all women equally).
When we look at gender equality in the workplace today, Switzerland is still facing many challenges. However, this is not a Swiss-only problem, but a global one.
Many studies and research have shown that diverse management teams achieve better results. For example, McKinsey reports show a strong correlation between companies in the top quartile for diversity and their financial outperformance[1]. They first published a report on this called “Women Matter” as early as 2007, identifying a positive relationship between corporate performance and women in senior roles.
A recent Goldman Sachs study showed that all-women or mixed-gender teams of portfolio managers outperform all-male teams[2]. And Boston Consulting Group studies show that companies with more diverse leadership teams report higher innovation revenues[3].
Investor engagement
Slowly (when you consider just how long the evidence has been around), investors are taking note. Gender lens investments, be it as part of an ESG approach or as a single-investment strategy, are becoming more and more in-demand. Aberdeen Standard Investments – one of Europe's biggest asset managers – drew media attention at the end of 2020 when they announced plans to launch a fund investing solely in women-run hedge funds, because investors are keen to foster diversity and believe it results in better returns. Very recently, Swiss bank UBS introduced an investment portfolio consisting of 10-15 international hedge funds in which a woman has sole or joint discretion over the investment of assets. Some asset managers will actively vote against companies who do not demonstrate commitment to, and progress in, diversity and inclusion.
Legislators are taking note, too. In 2003, Norway introduced quotas for the number of women on boards (40 percent). Spain and France followed suit in 2011 (40 percent by 2020), and Germany in 2016 (30 percent).
Other countries are taking a voluntary code approach – for example, the UK. In Switzerland, a new gender quota of 30 percent women on the board of directors and 20 percent on the executive board of listed companies has been applied since January 1, 2021, driven by the government. But there are no sanctions for non-compliance, as the quota imposes only a “comply-or-explain” approach.
With legislation to report board composition, diversity statistics, and a growing focus on the gender pay gap, we see more transparency than ever. What is more, the increasing focus on ESG investments, both from an investor and regulatory perspective (including the EU Action Plan), require reporting. And reporting requires data.
An Equality Index
Globally, there are now a number of ratings and indexes. They measure different aspects such as the number of women on the board, the number of women in the management team, and may include a rating based on a company’s diversity and inclusion efforts. Some do this on a national level, for example for the U.S. Others do it regionally, such as for Europe. Still others do it globally. They all use different criteria and different weightings, but they do create a value judgment, or an assessment.
At the beginning of 2021, SIX launched its SPI Gender Equality Index as part of a range of new ESG bond and equity indexes for the Swiss market. The SPI Gender Equality Index represents those companies within the universe of the 100 biggest SPI firms (which basically covers the whole Swiss market) that have more than 20 percent women on the board of directors, as well as more than 15 percent women on the management/executive board.
It is not a very high bar, but out of the 100 companies that we look at, 27 make the cut. Among them are large players like Nestlé and Novartis, but also some local banks have qualified for inclusion. Compared with the SPI, the new index shows a clear outperformance – obviously based on back-tested data, and in part due to the fact that the index is equal-weighted – but this links back to the studies mentioned earlier, and also proves this point for the Swiss market.
Making the cut
To be fully transparent: if SIX was a listed company, we would not have made the cut yet. We currently have a female proportion of 10 percent on our board of directors (in 2020 it was still at 20 percent) and I am the only woman in our eight-member executive board. Thanks to the integration of BME into SIX Group as well as to new hires, at least the proportion of women in management positions across the company has risen from 19 percent to 22% percent within the last year. However, as Jos Dijsselhof puts it in his CEO statement to the SIX GRI Report: “…there is certainly still a lot of room for improvement through dedicated measures.”
As the executive board at SIX, we are committed to growing the percentage of women in middle and top management to a minimum of 25 percent by the end of 2023. It is a target that reflects where we are and the challenge we have to address.
SIX has drawn up the measures needed to achieve this target. They relate to the recruitment of new employees, talent management, succession, culture, and training and development. I personally hope that the SPI Gender Equality Index will do to us what it will do to other companies; that we look at our peers, and start benchmarking ourselves. And that it will not be long before we can set the thresholds higher, and to still have a meaningful index for the Swiss market.
[1] https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters
[2] https://www.ft.com/content/021a1b60-a5fa-42ad-83b4-482268cac7ac/https://www.ft.com/content/021a1b60-a5fa-42ad-83b4-482268cac7ac
[3] https://www.weforum.org/agenda/2019/04/business-case-for-diversity-in-the-workplace/