At Pax World, we believe that investing in companies that invest in women is a smart investment strategy. Holding back half of the world’s population through unequal educational and job opportunities, unequal wages, let alone violence and oppression, is not only morally reprehensible, it’s bad economics.  Businesses that ignore what women can bring to the table are handicapping themselves and will eventually fall behind in the emerging global economy. Conversely, those that invest in and empower women will be advantaged. These latter will show themselves to be stronger companies and better long-term investments.

There is a significant body of research suggesting that companies that are successful in promoting women to the most senior levels of business tend to perform better than those companies that do not.  A 2011 Catalyst study of companies over the 2004-2008 time period showed that companies with three or more women corporate directors (in at least four of the five years) outperformed those with no women on the board by 84% on return on sales (ROS), 60% on return on invested capital (ROIC) and 46% on return on equity (ROE)1. An earlier Catalyst study found that the highest quartile companies in terms of percentage of women on the board outperformed the lowest quartile companies over the period of 2001-2004 by 42% on ROS, 66% on ROIC and 53% on ROE.2 Several other studies have likewise found that those companies with higher percentages of women on their boards or in senior management outperform those that lag in gender diversity3. This is particularly the case with a critical mass of women in leadership roles.4

There is also evidence that companies that are attentive to women as consumers do better: a 2007 paper by Goldman Sachs identified 30 companies—termed the “Women 30” index—that sell products primarily to women. This Women 30 index “has outperformed significantly over the past 10 years: total returns were three times greater than for global equities.”5

Gender equality in employment also boosts economies, as Goldman Sachs noted in the aforementioned study:

“Closing the gap between male and female employment would have huge economic implications for the global economy, boosting US GDP by as much as 9%, Eurozone GDP by 13% and Japanese GDP by 16%.”6

In all of our mutual funds, Pax World seeks to avoid investing in companies that we determine are involved in the exploitation and trafficking of women, whose products demean women or that use negative stereotypes in their advertising, promotion or marketing. Similarly, Pax World endeavors to avoid investing in companies that fail to provide a safe work environment for women by encouraging or tolerating harassment, as well as companies that have a history or pattern of discrimination or mistreatment of women, or other gender-related controversy.

Pax World addresses gender issues, including board diversity, through its proxy voting policies as well.  For example, when voting on director elections, Pax World has a policy of withholding votes from, or where possible voting against, all slates of director nominees that do not include women. Pax World then registers its concerns with the company through a follow-up letter explaining the reason for our opposition to the all-male slate and encouraging the company to take steps to promote gender diversity and add women to its board of directors.

We also engage in shareholder activism initiatives aimed at promoting gender equality and women’s empowerment.  For example, Pax World is a founding member of the Thirty Percent Coalition which is working to assure that women hold 30% of board seats across public companies by 2015.

Global Women’s Equality Fund

In addition to the above gender criteria and initiatives, Pax World offers investors a specific fund, the Global Women’s Equality Fund, focused on investing in leading companies around the world when it comes to gender equality and women’s empowerment.

The Pax World Global Women’s Equality Fund (the “Global Women’s Equality Fund”) seeks to invest in companies that take affirmative steps to attract, retain and promote women, and to advance gender equality and women’s empowerment in the workplace and beyond. Specifically, the Women’s Equality Fund seeks to invest in companies that promote gender equality through internal policies and programs, transparency regarding the effectiveness of those policies and programs and accountability among employees to assure implementation and observance of those policies and programs. Examples include:

  • Promotion of women to top executive positions and compensating them accordingly,
  • Representation of women on the board of directors and in senior management
  • Strong support from senior executives for workplace equality
  • Career development, education and training programs for women employees
  • Hiring and promotion policies and activity to promote gender equality
  • Programs to address work/life balance concerns, including in particular women’s health, safety and childcare responsibilities
  • Programs to address discrimination against women and to protect women from harassment and violence
  • Positive images of women in their advertising, promotion and marketing
  • Use of women-owned companies as vendors and service providers
  • Accountability and transparency to employees, investors and the communities in which they operate


In addition, Pax World favors companies that embrace or aspire to embrace the best practices embodied in the Women’s Empowerment Principles, a joint initiative of the UN Women and the United Nations Global Compact.

We believe we are at a tipping point. Eliminating gender inequality and empowering women are finally being recognized, on a global basis, as urgent moral and economic imperatives. We believe gender equality must become an investment concept – a key driver of business success, economic growth and investment returns.  In our view, companies that integrate gender diversity and women’s empowerment into their business models will be more successful than their less enlightened competitors. We want to invest in those companies, and we want our shareholders to benefit from their success.

The issues highlighted above are illustrative and do not necessarily reflect the full range of gender empowerment issues Pax World may consider in analyzing a particular security for investment.

Past performance does not guarantee future results.


1 Catalyst, “The Bottom Line: Corporate Performance and Women’s Representation on Boards (2004-2008),” 2011. 

2 Catalyst, “The Bottom Line: Corporate Performance and Women’s Representation on Boards,” 2007.

3 See, e.g., Mary Curtis, “Gender Diversity and Corporate Performance,” Credit Suisse Research Institute, August 2012;  Andre Chanavat and Katherine Ramsden, “Mining the Metrics of Board Diversity,” Thomson/Reuters, June 2013; Mariam Schwartz-Ziv, “Does the Gender of Directors Matter?” Harvard University - Edmond J. Safra Center for Ethics, May 7, 2013.

4 V.W. Kramer, A.M. Konrad, and S. Erkut, “Critical mass on corporate boards: Why three or more women enhance governance,” Wellesley Centers for Women, Paper No.WCW11, 2006.

5 Kevin Daly, “Gender Inequality, Growth and Global Ageing,” Goldman Sachs Global Economics Paper No: 154, April 3, 2007: 16.  

6 Ibid.