CalSTRS Backs the Value of Women in Financial Leadership Roles
“Beyond Talk” networking workshop continues momentum in efforts to advance more women into investment and financial management leadership roles.
WEST SACRAMENTO, Calif. – The California State Teachers’ Retirement System demonstrated its ongoing commitment to “moving the needle” on gender diversity by spearheading the “Beyond Talk: Taking Action to Achieve Gender Balance in the Financial World” networking workshop, along with State Street Global Advisors, on March 8 in San Francisco.
“Beyond Talk” was inspired both by CalSTRS’ efforts to advance diversity in the investments industry, as well as the 72-percent female composition of its 896,000-person membership of California educators. Additionally, the March 8 event focused on establishing a firm commitment among attendees and stakeholders to pledge future dates for continued networking to foster the relationships necessary for advancing women in professional leadership.
“As a Chief Investment Officer, a leader and a father of three daughters, I know that empowering women as senior leaders and having diverse opinions when making decisions fosters creativity and facilitates better outcomes,” said CalSTRS Chief Investment Officer Christopher J. Ailman. “We are entering a new era of impact investing — one based on looking for values or purpose that generate investment returns based on diversity of thoughts and perspectives, while also creating change with our capital. I believe it’s time to change the face of Wall Street and corporate America.”
Mr. Ailman continued, “By increasing the amount of women in senior leadership and C-suite positions, companies are positioned to break the ‘group think’ pattern, and ultimately make more innovative decisions, and perhaps achieve better risk-adjusted returns and lower volatility. CalSTRS has a long history of seeking impact with its investments, and will continue to focus upon generating returns and, if possible, reinforcing and encouraging our values.”
“We expect the ‘Beyond Talk’ event will become a valuable model for other regions of the U.S., with the goal for it to be replicated in places like Los Angeles, Boston, Denver, Chicago, and New York City,” Mr. Ailman added.
Recent McKinsey & Company research issued in January 2015 shows that companies which commit to diverse leadership are more likely to have financial returns as much as 35 percent above their national industry median.
Furthermore, in a move which directly exemplifies the above-mentioned research, CalSTRS announced its initial investment of $250 million in the SSGA Gender Diversity Index, a large-cap U.S. stock index primarily tilted toward companies with a greater than usual number of women in senior leadership positions.
While CalSTRS does not endorse any particular investment product or service, the organization maintains its focus on advancing diversity in senior leadership positions in an effort to generate investment returns and create long-term value.
CalSTRS knows the value of gender diversity first-hand. According to its Diversity in the Management of Investments 2016 Annual Progress Report, the leadership of CalSTRS’ 127-member investment staff is currently 83 percent female. Overall, the investment staff is 48 percent female and 52 percent male, while also being 47 percent ethnically diverse.
McKinsey and Company research also cites that, despite widespread knowledge of the problem of the lack of women in the financial industry, underrepresentation persists. In 2012, women were underrepresented at every level of the corporate pipeline, with 42 percent in entry-level positions and only 16 percent in C-suite leadership. Research shows that the numbers had not appreciably improved in 2015, with women comprising 45 percent of entry-level positions and only 17 percent of C-suite positions.
The California State Teachers’ Retirement System, with a portfolio valued at $179.4 billion as of January 31, 2016, is the largest educator-only pension fund in the world. CalSTRS administers a hybrid retirement system, consisting of traditional defined benefit, cash balance and voluntary defined contribution plans. CalSTRS also provides disability and survivor benefits. CalSTRS serves California’s public school educators and their families from the state’s 1,700 school districts, county offices of education and community college districts.