Women, the World's
Greatest Emerging Market

Businesses and economies eager for growth may be overlooking the potential of women seeking an equal financial footing with men.

Sociologists and economists have long pondered ways to close the gender gap—the unequal representation of women in everything from financial markets to salaries to corporate leadership. While such discussions often focus on issues of fairness and access, an equally compelling story may be the enormous growth opportunity that societies and companies miss if they fail to actively support and nurture economic parity for women. Call it the growth gap.

“The biggest emerging market in the world is not China; it’s women,” said Sylvia Ann Hewlett, chair and CEO of the Center for Talent Innovation. “We don’t pay this market the respect it deserves.”

Times have changed markedly since days when business and finance were thought to be the exclusive province of men. In the United States, women control more than $11.2 trillion of investable assets and up to 80 percent of all consumer purchases. They compose nearly half the U.S. workforce. And they are bringing fresh leadership and innovative ideas to major companies like Bank of America, where women now comprise 40 percent of management and nearly 30 percent of the board. “We invest in women at all levels of our company because it is the only way to ensure we have the most talented teams we need to work with our clients and to operate in the communities we serve,” said Brian Moynihan, the bank’s CEO.

Yet there’s still a long way to go. Women hold just 14.2 percent of top executive positions in U.S. companies. Globally, the story is much the same. And the McKinsey Global Institute estimates that if female employment rates matched those of men, global annual GDP could rise by 26 percent by 2025.

Getting there requires more than antidiscrimination policies. It takes a fundamentally new discourse on business and finance—one that celebrates the full participation of women who too often feel excluded. A Center for Talent Innovation study found, for example, that 53 percent of female investors did not have a financial advisor. Their reason? They didn’t like the male-oriented advice being offered.

We invest in women at all levels of our company because it is the only way to ensure we have the most talented teams we need to work with our clients and to operate in the communities we serve.

Brian Moynihan, CEO, Bank of America

Women and finance

That’s changing as financial firms awaken to the need for investment opportunities by, for and about women. Responding to studies confirming that women and men often differ on investing preferences, risk appetite and defining success, some newly minted companies founded by women offer portfolios designed for female investors.

Even long-established firms are actively responding. At Bank of America’s U.S. Trust, the Women and Wealth initiative includes investment insights, wealth management guidance and in-depth analyses of issues ranging from gender equality to entrepreneurship to the disproportionate impact of climate change on women.

The biggest emerging market in the world is not China; it’s women. We don’t pay this market the respect it deserves.

Sylvia Ann Hewlett, chair and CEO
of the Center for Talent Innovation

Encouraging responsible growth

As their economic presence increases, women are having a profound impact on how businesses view their role in the world, prodding them not just to grow, but to do so responsibly. Women are helping drive the burgeoning field of sustainable investing, which holds companies accountable for their treatment of the environment, their employees and their communities. While both women and men engage in sustainable investing, which now accounts for one of every five dollars in assets under management in the United States, 65 percent of women versus 42 percent of men say such factors are important in making investment decisions.

An emerging discipline known as gender lens investing, representing more than $500 billion in total assets, evaluates prospective companies based specifically on issues such as workplace equity and whether a company’s products are made and marketed with attentiveness to women’s needs. U.S. Trust’s Women and Girls Equality Strategy, for example, evaluates pay differences, and female and minority representation in management, among other factors.

Gender lens investing has grown so dramatically as a strategy that Bloomberg last year introduced its Financial Services Gender-Equality Index, a tool to help investors track hard-to-measure but revealing qualities, ranging from workplace policies to advancing economic opportunities for women. In January 2017, the number of companies participating in Bloomberg’s index doubled from 26—including Bank of America—to 52. Also last year, Weber Shandwick launched its Gender Forward Pioneer Index, ranking Fortune Global 500 companies on the percentage of women in senior management positions.

Seat by Seat

Seat by Seat by Seat:

Women gain influence in the boardrooms of large companies…

Percentage of Fortune 500 Board Seats
by Gender

…but there's a long way to go

Number of seats women needed to gain to achieve gender parity between
2012 – 2016


Number of seats women actually gained between
2012 – 2016


Number of additional seats needed to achieve gender parity


Source: Deloitte and The Alliance for Board Diversity, “Missing Pieces Report: The 2016 Board Diversity Census of Women and Minorities on Fortune 500 Boards”

Support for entrepreneurs

More women are starting companies than ever before—yet access to financing often remains frustratingly elusive. Though 36 percent of small businesses in the United States are owned by women, businesses owned exclusively by men are four times as likely to receive venture capital funding, according to a 2014 study by Babson College. A Wharton School report, meanwhile, suggests that women face a particularly arduous financing battle when they move beyond fashion or baby care and into areas such as tech. Of 111 startups to raise Series A financing in the first half of last year in the Bay Area, only 11 of them were led by a female CEO, according to the Female Founders Fund.

But barriers are beginning to fall. New VC firms like the Female Founders Fund, Belle Capital USA and the Women’s Venture Capital Fund actively seek to finance women-owned businesses in a wide variety of fields. Bank of America has teamed with entrepreneur Tory Burch to encourage and finance women entrepreneurs: By the end of 2017, the bank will have committed $30 million in loans to women-owned businesses through the Tory Burch Foundation Capital Program.

Change from the inside out

For any company, tapping the economic potential of women starts at home, with internal recruiting, hiring and promotion practices encouraging gender parity—including in top layers of management. A 2016 Peterson Institute for International Economics survey of 22,000 companies in 91 countries found that companies with at least 30 percent women in senior management enjoy a 15 percent profitability bonus.

If it’s clear that hiring, promoting and investing in woman is good, why do imbalances persist? Part of the blame lies with the tendency to stick with what’s familiar. “Often, it’s easiest to fill a position with a man,” said Rebecca Parsons, chief technology officer of ThoughtWorks, a software company. “The problem is, each one of those short-term decisions may make perfect financial sense at the time, but then you look back over 18 months and any progress you may have made on diversity has gone away.”

Another hurdle: good intentions unsupported by a solid plan. Though nearly three-quarters of global executives believe companies will achieve gender parity in leadership by 2030, only 44 percent say their own company has measurable goals in place, according to a recent report by Weber Shandwick.

Research shows that companies making the greatest strides have formal gender diversity programs, with active, long-term support at the top of the organization. Parsons’s company, ThoughtWorks, created a global Women in Leadership Development program. In addition to identifying women on a clear leadership career track at ThoughtWorks, “we also wanted to target high-potential women who may be several years away,” she said. “We wanted to find those who have potential but might have started to feel stuck in their advancement.”

The company now has 30 percent women in its senior-level leadership and 24 percent in executive positions. “We’ve had women stepping into positions of authority all over the globe as a result of that program,” Parsons said.

The power of mentors

At EY, the accounting giant once known as Ernst & Young, a long-range plan has helped the company nurture and retain talented women such as Janet Truncale, now a managing partner overseeing 3,000 employees. As Truncale’s career progressed, the company enabled her to take flexible work arrangements following the birth of her children. And EY made sure she had mentors to guide her along the way, thanks to an executive sponsorship program that pairs board-member sponsors with high-potential women.

The firm’s efforts have paid off handsomely. Just a few years ago, not many women reached the upper levels at EY. Today, a third of the company’s U.S. board of directors, and more than a third of its managing partners, are women. “We have seen the benefits of increased revenue and increased margins from having greater balance of women on management teams,” said Karyn Twaronite, EY’s global diversity and inclusion officer. “It’s proven to be a very effective aspect of our growth model.”

A clear path forward

Momentum for gender parity continues to gather. In December, Bank of America’s Moynihan joined the chief executives of 26 other global companies to form Paradigm for Parity—a formal pledge of gender parity in leadership at their companies by 2030. As such movements and commitments spread throughout the business and financial world, from boardrooms to investment floors to startups, the day when women and men are equally represented in all aspects of our economic life may arrive sooner than anyone imagined—not just because it’s fair, but because it represents greater prosperity for all.