Retooled scorecards will better measure women-led results, says new book

Women asset managers and corporate leaders assess risk and opportunity over a longer time frame, justifying new methods of measuring their results.

In just one conversation, the personal became political for Ruth Shaber.

A busy doctor and health administrator, in the midst of a divorce and with caregiving responsibilities in both generational directions, she just didn’t have the time or energy to master investing strategies, too.

But then her financial advisers — a team of two women — asked her to attend a financial boot camp for women, and she suddenly realized that there were precious few standards for gender-lens impact investing.

“I was disappointed in the standards that were out there,” she said. “All my background is in evidence-based medicine, and there was an absence of science.” With responsibilities for overseeing an endowment portfolio as well as her own holdings, Shaber decided to invest in the how of gender-lens investing.

The two advisers she was working with eagerly signed on to explore the idea. “I wanted collaborators, not people who would tell me what to do,” Shaber said, explaining why she started from near-scratch instead of hiring an existing firm. “They were willing to learn with us, and the [existing] boutique firms thought they knew the answers.”

The result: the Tara Health Foundation, which designs its asset management around its mission of improving the health of women and girls. And, Shaber says, the philosophy is paying off: Investments in women deliver the very best results.

That’s the point of “The XX Edge: Unlocking Higher Returns and Lower Risk,” the just-published book Shaber co-authored with portfolio manager Patience Marime-Ball. In it, the two write the next chapter in the long-running discussion about how to reap the best return on investing in companies run by women, in whole or in part.

Women tend to invest for the long run and consider a wider variety of factors in their assessment of a company’s potential, Marime-Ball said. She founded and runs the Women of the World Endowment, which estimates investors realize a greater return on women-run hedge funds (6%) and on companies with women CFOs (8%) and CEOs (6%). Marime-Ball was the architect of the Banking on Women platform for the International Finance Corp. and led its fixed-income business.

Whether it’s combatting inflation or building a multi-asset portfolio with women at the helm of each holding, the primary point is that women think differently and deliver better results, Marime-Ball said. “Better decision-making lowers risk and results in better performance.”

She and Shaber wrote their book to shift the perception of women in the economy from “beneficiaries,” or those who need to be helped, to “actors,” or those who make things happen, she said.

There are plenty of ways for asset managers, investors and advisers to advocate for greater power for women as asset managers, company owners and investors, Marime-Ball said.

“If you are an entity that manages capital of its own, think about who’s on the team and make sure that women are not just in middle positions,” she said. “Can you move more people into the portfolio manager roles internally? And if you do that, those people might grow to become external suppliers. It’s likely that the managers who have different strategies will diversify your portfolio. They’ll see opportunities differently and that’s how you get to that differentiated pipeline and portfolio construction.”

Marime-Ball has invested in Ethos, an analytics firm that includes gender lens factors in its measurements of results. That’s one way, she said, to capture more accurate numbers for all portfolios, grounded in the perspective that women are actors.

“Until women have proven themselves in the eyes of the mainstream market, the mainstream market is not seeing that across all asset classes, women are successful,” she said. “You can’t use old models to solve accelerating changes.”