Closing the gender gaps. Equal financial opportunities for women.
Women want and deserve the opportunity for long-term financial independence but there are "gaps" that need to be overcome in order for them to achieve this. Three Credit Suisse reports examine the specific challenges that women face with regard to wealth generation, the labor market, and leadership opportunities in the corporate world. So, what stands between women and a more equitable financial future?
The gender pay gap
Gender imbalances in terms of leadership and pay remain substantial. Women are more likely to work part time while they carry out a larger share of unpaid care work than men. They also suffered disproportionate job and income losses during the COVID-19 pandemic, as the hardest hit sectors tend to employ more women. Global trends show that women are living longer than men and are starting families later. In addition, in advanced nations they tend to be more highly educated than many men. We need policy shifts that increase female participation rates in the labor force and encourage a broader acceptance of non-standard work arrangements to give both women and men more flexibility to balance work and home life, as well as more reskilling and upskilling opportunities for women.
The gender leadership gap
Speaking at the Global Women's Financial Forum on September 30, 2021, Blythe Masters, Member of the Credit Suisse Board of Directors, drew a link between the lack of women in senior positions within the financial industry and how that makes it less appealing for young women to want to stay. "It leads to them voting with their feet, and choosing other directions, and that is a huge loss. So how do we find a way to encourage women to stay, and to encourage leaders to find a formula that will help ultimately fill that pipeline with progressively senior female executives?" Greater diversity in the boardroom typically leads to a better gender balance in executive functions. In companies where at least 5% of board members are female, women make up 18% of management, and this proportion increases as the percentage of women on boards rises. Encouragingly, we find that boardroom diversity continues to improve globally. However, it is arguably more important to measure diversity representation among those making the executive and day-to-day decisions that drive financial performance. When we do, we see that not all roles are created equal, nor is there balanced gender distribution.
The gender investor gap
While women's global wealth in 2021 was estimated to be approximately USD167.3 trillion, according to our calculations, men still hold the lion's share of wealth. Accounting for that gap is the fact that women tend to earn less and experience more disruptions in their pension savings. Many women also have a more conservative approach to managing their finances, for example holding more of their assets in cash and fixed income versus equities. We believe that financial service providers have an opportunity to support women in engaging more with their wealth in order to build a secure financial future. An investment lifecycle lens that recognizes women’s shifting responsibilities as they age, and uses practical and understandable language, can help women develop a stronger connection with their investments.
