The Barclays Women In Leadership Index (WIL), along with other WIL related investment products, aims to provide investors with exposure to U.S. based companies with gender-diverse executive leadership. By tracking companies that, among other things, have a female CEO, and or a board of directors (BOD) made up of at least 25% women, the Index offers institutional and retail investors an opportunity to invest directly in the thesis of gender diversity in corporate leadership.
Barclays believes these products will be attractive to the growing population of socially responsible investors and encourage more corporations to focus on gender parity in leadership and governance within their own organizations. Barclays' WIL Index, the first such index to be offered by an investment bank, will enable increased investment into gender diversity in corporate leadership.
Barclays' Markets and Index teams have established four initial Index parameters (Index constituents will be rebalanced quarterly). The first (Index Universe) is that only shares listed on NYSE or NASDAQ, with companies headquartered in the United States will be considered. The second (Liquidity Filter) is that selected stocks must have at least a million market cap and a million 3-month Average Daily Value Traded. The third (Women in Leadership Selection) is that only companies that satisfy one or both gender diversity criteria of having a female CEO followed by at least 25% female members on the board of directors will be considered. The fourth (Sector Cap & Selection) is that up to 10 stocks in each of the 10 GICS? sectors can be selected and will be weighted according to market capitalization with the maximum weight cap of 5%
As a major global financial services provider, with nearly 325 years of banking expertise, Barclays has a proven history as a first-mover, committed to helping 'people achieve their ambitions - in the right way.' Barclays' market-leading platform is dedicated to providing products and services that meet the diverse needs of global clients.
Index Launch: Barclays launched Barclays Women In Leadership Index in July 2014
Related Product Launch: Barclays launched related products including swaps and exchange traded-notes (ETNs) linked to the Index in July 2014
Performance Measurement: Over the next few years, Barclays expects issued notional amount of investment products ('issued notional') linked to the Index and ETNs to achieve scale and will systematically measure performance related to issued notional. Annual issued notional targets have been agreed upon internally, and quarterly updates will ensure that issued notional remains on track.
Marketing & Branding: Funding has been allocated to support broad marketing & branding related to the Women In Leadership Index and related projects including, but not limited to, press, advertising, thought-leadership and client events.
Approvals: Barclays received internal approvals and funding prior to the launch of the Index.
Women are significantly under-represented in corporate executive leadership, comprising only 16.9% of Boards of Directors of Fortune 500 companies as of 2013, a metric that hasn't improved meaningfully in the last decade (Catalyst Census 2013). Yet a growing body of research shows that companies with more gender-diverse leadership outperform those with less diversity. Per Catalyst data, Fortune 500 companies with the top quartile of women directors outperform those with the bottom quartile in terms of returns on equity, sales and invested capital.
Appetite for socially responsible investing (SRI) has increased significantly in the past two decades, with assets under management utilizing SRI criteria growing from million in 1995 to over .7 trillion in 2012 (The Forum for Sustainable and Responsible Investment). In particular, board issues rate among the top environmental, social, and governance (ESG) considerations for institutional investors according to a 2012 US SIF study.
This investor focus may have compelled corporations to improve their transparency and focus on improving SRI-related issues. For example, 72% of S&P 500 companies voluntarily reported their sustainability efforts in 2013, as compared to only 20% in 2011, indicating that socially responsible initiatives are becoming part of their long-term corporate strategy (Governance & Accountability Institute).
Although diversity, and specifically gender diversity, has become an important corporate governance theme for SRI investors, there currently exist few related investment products that directly address those challenges.