Pathfinder and investing in women:

16 February, 2024

4 mins

Helping the gender pay gap

This table shows how women are represented in the companies Pathfinder invests in compared to the benchmark.

All Pathfinder Funds Benchmark* All Pathfinder Funds vs Benchmark
Women on the Board 32.6% 32.3% 0.3%
Women Executives 22.7% 21.4% 1.2%
Women Employees 33.3% 38.2% -4.9%
Women Managers 40.1% 33.4% 6.7%
Companies that report gender pay
gap data
31.1% 11.2% 19.9%
*MSCI All Country World Index

Background on women on boards: There is a sharp distinction between emerging market and developed market companies, with the former having far fewer women in board positions. Many companies in developed markets are subject to mandatory gender quotas. Greater social change is required to achieve balanced leadership, but quotas can be used to jump start immediate action and force at least some change in the short term.

While the majority of male leaders attribute the gender imbalance in leadership to a ‘lack of available female talent’, research from countries that have enacted quotas for female representation on boards suggests that quotas have been successful in activating previously untapped networks of women with business degrees and MBAs. 6

Pathfinder has communicated a quota requirement of at least one woman on the board for NZ listed companies.

Background on pay gap reporting

S&P Global Research in 2019 found that companies with women Chief Financial Officers were more profitable and produced superior performance compared to the market average.

Similarly, this research showed that companies with high gender diversity on their board of directors have been more profitable than those with less.7

Gender diversity continues to play an increasingly important role in corporate strategy and performance. Companies that perform well on gender diversity metrics often perform better financially than those that do not, and companies that neglect gender diversity and inclusivity may be left behind and exposed to greater investment risk.

The first step to improve progress on gender diversity is to measure the data, but most companies in the world do not disclose any information. According to Equileap research1 just 22% of companies globally publish any information on differences between the salaries of men and women employees. This is up from 17% in 2022 and 15% in 2021, so we hope this indicates a change in trend.

The highest performing countries have legislation mandating gender pay gap reporting from medium to large-size companies– Spain, the UK, Italy, and Norway. In Spain, 98% of companies publish gender pay gap information.

Generally, companies with less than a few hundred employees are not subject to mandatory reporting. In the UK, companies with over 250 employees must report gender pay gap information to a government database which is made publicly available.

In New Zealand, 34% of listed companies publish information on their gender pay gap. Here’s how that compares to other OECD countries.

UK: 82% Italy: 77% Norway: 68% Australia: 27% USA: 12%

New Zealand still has no gender pay gap reporting requirements, although pay equity claims can be made under the amended Equal Pay Bill.

In August 2023, the Labour government announced plans to legislate mandatory pay gap reporting for organisations with over 250 employees, in line with the progress the UK has made. This would cover around 900 New Zealand companies, however with the change in government it is unclear whether this legislation will be enacted.

ESG metrics include a review of a company’s gender diversity policy. Companies are beginning to understand the financial risk that poor performance on gender diversity poses to their business and are increasingly making this information available. However, legislative roll backs can negatively influence the market. At Pathfinder, we prioritise high performing ESG companies, as they’re likely to outperform lower ESG scoring alternatives in the long run.

Notes & References

1 Studies have identified 30% women representation on the board as the tipping point at which the impact of diversity can begin to be seen.

2 High-level positions responsible for day-to-day operational management i.e c-suite (CIO, CEO etc)

Women are considered equally represented in the workforce when their numbers exceed 40%

4 This includes all levels of management, from junior, middle, senior, to top-level

5 For this data point, we’ve used the percentage of companies that report on their gender pay gap, rather than the reported pay gap itself. This is because the small proportion of companies in the benchmark that report skews the data. The proportion of companies that Pathfinder owns that report this information is much higher than the benchmark and is broadly in line with the proportion of New Zealand companies that report on the gender pay gap, which is 34%

Do Quotas for Corporate Boards Help Women Advance? | Chicago Booth Review

7 When Women Lead, Firms Win

Equipap Global Report - Gender Equality Global Report & Ranking

National Council of Women of New Zealand - Survey results of political party policies on gender equity and women’s issues

5. Equal pay in collective bargaining | Pay Transparency Tools to Close the Gender Wage Gap | OECD iLibrary (