Women in the Impact Economy: Opening the Doors to the Boardroom
Last week the world marked International Women’s Day. Netflix had a special section of movies and series with women in leading roles, Google had a dedicated logo, multinationals marked the day with Tweets and internal emails. Yet it is never lost on me that the day so often coincides with the Purim holiday and the reading of the story of Queen Esther, the epitome of Jewish heroinism. As the wider world rightly directs its focus on issues of equality and the impact women have in different industries and sectors, for the Jewish community the proximity of the two dates raises the question of the prominence (or lack thereof) of women in leadership positions, and the recognition they receive.
I am fortunate to serve as CEO of an impact fund that not only prides itself on the role of women in its leadership but also invests in women’s empowerment in Israel and Africa, applying a blend of strategic philanthropy and impact investment to create positive social impact.
We do this not only because we believe in equality and diversity, but also because we know that true innovation and progress require a diverse range of voices. But the reality remains that across business, politics and society, we often starve ourselves of the insights and perspectives provided by strong female leaders, and those who do make it are required to smash through antiquated barriers to succeed. Ironically, this often happens in those sectors where female leadership is most vital. Impact investment offers a case in point.
Impact investment bears similarities with philanthropy in its focus of making this world a better place, but aims to create more sustainable and enduring systems of investment. Philanthropy, while offering meaningful contributions, is often unsustainable and lacks continuity. The strength of impact investment lies in its ability to create connections between an unmet social or environmental need and disruptive solutions and build long-term structure. At the highest levels – part of what is called the impact economy – it is possible not only to impact niche needs but also to effect change by addressing regulation and engaging governmental bodies. There are huge funds that can be unlocked and directed by investors toward solutions that tackle social and environmental needs and leave a lasting impact. It is, essentially, an arm of business, governed by money and dominated by leaders with hard skills, with the goal of unlocking capital.
In philanthropy as in so many areas of business, women are having to work harder than their male peers and face greater resistance before gaining their seat at the table. Outdated and wrong-headed notions remain that see childbirth and family commitments counted against women, and that consider women more suited to careers that prioritize soft skills.
While recently more women have been stepping into leadership roles in the impact economy, it is unfortunate that in many venture-capital-backed Israeli startups – the drivers of the Israeli tech sector’s future – women are still grossly underrepresented in the boardroom as CEOs and founders. A mere 16% of partners in Israeli venture capital firms are women; only 9% are investing partners. In startup companies in Israel as a whole, women occupy less than 25% of leadership roles from C-suite to director positions. The impact economy has much to learn from its philanthropic sibling.
This dearth of female leaders in the impact economy is all the more appalling, precisely because it is the combination of hard and soft skills possessed by the most effective female leaders that are so crucial in impact investment.
In Israel, women account for around 60 percent of all students at bachelor’s and master’s degree level, above the OECD average. Many of these graduates emerge with qualifications in not only business and finance, but also law, education and medicine.
This is key to the development of hard and soft skills that make female leaders so effective in the impact economy. Many men who work in roles in the impact economy have financial and investment backgrounds, with an overarching focus on results and the bottom line. Many women arrive in impact economy roles with a different approach, one that is more focused on the process. They possess a variety of transferable skills that can bring great value to senior leadership roles. Recognizing the motivations and attitudes of clients and stakeholders, brokering connections between individuals and organizations, and applying empathy and consideration toward a philanthropic goal, are all key drivers of success in the impact economy.
We must all do far more than pay lip service to empowering women in leadership. We must demand the creation of programs and initiatives and professional opportunities that deliver crucial skills and help the female leaders of tomorrow overcome the barriers they face.
While impact investments rely on unlocking and channeling financial capital toward social and environmental aims, International Women’s Day last week was an annual reminder to consider the importance of human capital and ensure that the potential of female leaders in the impact economy ecosystem is recognized and supported.