Where can gender-smart investors be bolder in 2022?
A friend of mine is on the board of a large institutional investor, using her voice around the board table as a champion for gender equality.
In her role, she has consistently pushed for ambitious and specific objectives, and recently it paid off: in the form of a concrete commitment that a significant proportion of annual investments will have an explicit gender lens. It wouldn’t have happened without her hard work and bold advocacy, the support of fellow board members and senior management, and the consistent efforts of a lot of other people in that organisation. But her attitude was, we simply cannot stop with aspirational statements of intent; we need to ground those aspirations with tangible and measurable targets.
Another colleague is proposing ideas to a major investor where she is an external adviser that are bold, ambitious, and catalytic — and a significantly bigger commitment from this investor in not only how much they would be deploying with a gender and racial equity lens but also how they are deploying it. And they are saying yes — we need this bold thinking, and we need it now.
Their stories got me thinking about how I could be bolder in my own work. Coming out of the recent climate talks and looking at how much backward movement there has been over the past year for gender equity, I have to ask myself, if not now, then when. And if not me, and our community, then who. If we want to build a more equitable finance system, and set things up so that the entrepreneurs and innovators (including fund managers) who are solving the most pressing challenges facing our world are able to access the funding they require, we need to be moving more capital, with more velocity, in the right structures, and with more precise intention and impact.
If you’re also looking to be bolder in your gender-smart investing in 2022, here are seven ideas for actions you can take.
- Step into leadership roles.
As Patience Marime-Ball, founder of the Women of the World Endowment, put it at this year’s GenderSmart Investing Summit, if we want to make real change to the way that capital is deployed, we need to be in the rooms where decisions are being made. This means putting ourselves forward for roles on boards and investment committees, and stepping into leadership roles in all the places where capital decisions are being made. If you feel like you’re missing the skills or relationships you need to take on these roles, commit to taking the bold action you need to develop those skills and get the support you need. Recommend women and in particular women of colour for those roles. Show up.
2. Put your principles into practice in your portfolio.
If you’ve been learning about gender-smart investing but have been struggling to integrate the principles into your portfolio, make 2022 the year you finally take action. Take a look at Project Sage 4.0, the new report on PE, VC, and private debt vehicles with a gender lens from Wharton Social Impact Initiative and Catalyst at Large (my firm), or Parallelle Finance’s list of public equities/debt vehicles, and invest in these funds. Ask the companies and funds already in your portfolio deeper gender and racial equity questions, and offer support to help them do better. And be prepared to make the hard decision not to invest in vehicles that don’t meet your standards on gender and equity. Hold a higher standard of what good looks like.
3. Commit time and resources to your gender-smart strategy.
Intentions are great, but they need time and resources to make them a reality. If you’re looking to improve your gender-smart processes, your sourcing, your screening, the design of a new offering, your work with your portfolio, or your reporting, make a real commitment to dedicate the resources you need to set yourself up for success. That might mean setting real KPIs and incentives, bringing in new voices and expert guidance, staffing up, or building peer learning partnerships to get you there faster and better.
4. Use your voice to drive tangible commitments.
If you’re already in a leadership role, are you using your voice as powerfully as you possibly could? If not, ask yourself why not?
It’s true that speaking up can generate a lot of pushback: Wow, that’s really ambitious. Are there enough deals available? Do we have the bandwidth to make this a priority? We’ve never done that before… But all of these objections are possible to overcome. Commit to an allocation and then make it happen. Look for opportunities to change the face of who moves capital, to include more women and in particular, women of colour. Where can you shift terms, structures, by being confident and loud in the right rooms?
5. Challenge each other to do better.
SheEO’s Vicki Saunders recently told me a story about an event she did where a partner from a major VC firm spoke about a commitment they had made to allocate $50M to women entrepreneurs, how successful it had been, and how others in the industry needed to do better. Vicki responded, “Congratulations. I’m glad it was so successful for you. I wonder what would happen if you added a zero over the next five years.” He sent her a LinkedIn message the next day saying, “Add a zero, huh? :-)”
It was a bold thing to say to the chairman of a firm with more than $1B under management, but Vicki had done the math and understood that $50M out of $1B dispersed over 4 years was… not so much. If the action the firm had taken was working, the logistic next step was to double down on it and do more.
Vicki’s boldness has earned her major wins in 2021: for example, SheEO’s zero interest loan partnership with the Bank of Montreal. She notes, “When we recognize we can all do more to right the injustice and inequity our systems are creating and bring each other along on the journey, it’s energizing and emboldening. It feels good to play bigger, to use our power and influence to be the change.”
6. Stop waiting for an invitation.
This year has seen some wonderfully bold new initiatives in gender-smart investing, from Tim Radjy and Sustainable Finance Geneva’s Gender Lens Initiative Switzerland, to The Ally Capital Collab, a partnership between four Black and Latinx women fund managers to increase the visibility of and capital flow towards women of colour-owned funds, to 2xIgnite, which makes tangible the 2xChallenge’s work with gender lens fund managers. What all these initiatives have in common is that someone saw an opportunity or problem that needed fixing, and then leveraged their networks, their intelligence, and their influence to bring a solution to fruition. What new solutions could you bring into being in 2022?
7. Use your capital to invest in the people who are being bold.
If you’re in a position of leadership, use your capital to invest in the people and initiatives that are making bold moves. Asset and fund managers that are bringing new vehicles to market. Vehicles and firms that are solving problems in communities that have been underserved. Those who are serious about gender equity impact and not just counting women. Think about the purpose of your capital and ask yourself — is how we have been investing to date really getting us to where we need to get to?
Over to you…
What bold action will you commit to in 2022? Let me know in the comments or by private message.