The report, Women and Wealth: Female Entrepreneurs, HNWI and How to Approach Them, which was published by Wealthmonitor to gauge the development of affluent women across the globe, revealed that even though the latest Forbes billionaire list included more women than ever, the better-paid sectors continued to be male dominated.
According to the report women accounted for just 10 per cent of the world billionaires in Forbes’ 2013 list because of “discrimination” in some parts of the world where women were still pushed towards established female occupations. Drawing on data from the US Bureau of Labor Statistics and the European Union Labour Force Survey, Wealthmonitor concluded that women mostly worked in lower-paid ‘service based industries’ such as administration and retail, and not in the higher-paid fields of finance, IT and engineering.
The same applied to the gap between male and female entrepreneurs with only in a select few countries, such as Singapore and Thailand, where more women were creating new businesses than men.
Moreover those countries cited as leading the fostering of female entrepreneurship were the US, Australia, Germany, France and Mexico, where cultural norms were reported to be more supportive of female entrepreneurship, education and access to financial capital.
Afi Ofori, managing director and founder of Zars Media, a service dedicated to highlighting female leadership contributions, was optimistic that restrictive cultural norms that favour men were steadily becoming a thing of the past. She said: “It is changing quite a lot. The financial service and media industries are still male dominated. However over the years more women are going into those sectors.”
Ms Ofori was also positive that aspiring female entrepreneurs were not being neglected by financial institutions in the UK. She added: “I have no doubt that the banks are aware that a growing part of the UK’s wealth is controlled by women. As a growing number of women in the UK enter the workforce, the banks have an opportunity to design products that are attractive to women.”
One major issue that she said still held women back, however, was the responsibility of having children. A lot of women in the UK often put family commitments before career choices, which was why Ms Ofori has urged employers and nurseries to become more innovative in supporting mothers with young children.
Kids
Sabina Andersson, a research analyst for Wealthmonitor, agreed that the expectation for women to stay home and look after the kids is what has held back countries such as the UK from promoting greater numbers of wealthy females.
In her assessment of different country attitudes and how it affects the wealth of women, she said that Scandinavia in particular stood out as leading the way.
One of the key methods employed to establish gender differences in power and wealth was to focus on the demographics of company directors. The report found that among the companies with a market capitalisation in excess of ¤4bn (£3.3bn), the top three countries with the most female board of director representatives were Norway, Finland and Sweden.
Norway, which topped the list with 36.4 per cent of female board members, was a key focal point because of the laws it introduced in 2006 stipulating that publicly-traded companies must appoint at least 40 per cent of women members to their boards.
According to the report those who refused to comply with this quota risked “forced dissolution by delisting from the Oslo Stock Exchange”.
The report additionally revealed, however, that countries that did not enforce quotas had also fared successfully. Finland, which came second with 27.1 per cent, and Sweden, in third with 24.6 per cent, both increased female board numbers without introducing laws.
Research from executive recruitment firm Executives Online said that less than half (43 per cent) of those surveyed believed quotas would help to encourage more women into senior executive roles, but nearly a third (30 per cent) doubted the benefits of gender diversity in the boardroom.
Ms Andersson, who is from Sweden, said Scandinavian countries came out on top not because of any enforced laws or threats, but because they have stronger social networks and structures in place to help women who have children.
She added: “When you look at board directors across the board, Scandinavian countries stand out as being best. Norway, Sweden and Finland are countries that have a strong social network when it comes to things such as parental leave and this makes a massive difference. There is a whole level of societal structures in place there that encourage women.
“The data, therefore, showed that it was not just quotas that guaranteed success. Quotas could work in an environment where there is no other encouragement, but if you have a lot of societal measures in place, like there is in Scandinavia, then it is not necessary.
“It is all about political will and measures to share responsibilities between men and women, and this is often connected to children and sharing the responsibility of raising them.”
Critical
Ms Andersson was more critical of the UK where, according to the Professional Boards Forum’s BoardWatch in October 2013, women made up 19 per cent of FTSE 100 directors. Although this figure represented an increase on the 12.5 per cent registered three years earlier, it still fell short of the government’s targets of 25 per cent by 2015, which has not been enforced with sanctions.
Whereas Ms Andersson argued that in Scandinavia official laws were not necessary, she added that countries such as the UK that do not offer the same support networks may have to consider enforcing quotas to get the desired result of more equality.
Even though the distribution of wealth between genders has yet to be recognised as even in most of the world, a steady increase of female success stories in the past decade has led financial advisers to consider more of them as potential clients.
On this topic the report said the assumption that women were risk averse was old-fashioned and must be ignored by financial advisers. It said: “The interviews conducted by Wealthmonitor showed that women did not necessarily see risk differently, or want to be approached in a very different manner than their male counterparts.
“Whether a person is more or less prone to take risks in their career and with their investments is often down to other factors than gender, such as age, professional and cultural background and previous experience. For advisers to assume that women have less tolerance towards risk can mean they miss out on clients who decide to go elsewhere for advice that they feel is more suitable for a woman of today.”
One of the interviewees that featured in the report was Anna Sofat, founder of London-based Addidi Wealth. As a financial adviser who has experienced dealing with many female clients, she urged her peers not to resort to stereotyping, particularly as women have grown much less risk averse in the past 10 years.
She said: “I think it is changing. There is sometimes an element of money that they would perhaps ring fence and not want to take risk with, and that tends to be around their children and their home. But outside of that I think there are plenty of women who are comfortable with taking risks.”
Daniel Liberto is a features writer of Financial Adviser
Key points
■ More must be done to make gender equality a regular fixture in modern-day society.
■ The top three countries with the most female board of director representatives were Norway, Finland and Sweden.
■ In the UK women make up only 19 per cent of FTSE 100 directors.
