Patience Marime-Ball - The XX Edge: Unlocking Higher Returns and Lower Risk

The XX Edge

Unlocking Higher Returns and Lower Risk

Patience Marime-Ball and Ruth Shaber, M.D.

The XX Edge is a get behind kind of book. Marime-Ball and Shaber draw on their extensive research and real world experience to make a compelling argument for more gender inclusivity when it comes to business and the economy. It is a must-read for every leader who wants to deliver stronger long-term performance and positive and inclusive societal outcomes. It should be in the hands of every citizen who aspires to effect positive change.

JAMES MANYIKA, Chair and Director Emeritus, McKinsey Global Institute

The authors paint a powerfully persuasive picture of the results when women are at the centre of investing, as agents and actors. At last, we can understand the vast difference that women can make to the effectiveness of the financial world in meeting the challenges ahead. This book is vital reading for anyone concerned about the future of finance.

DR. SCILLA ELWORTHY, Three-time Nobel Peace Prize Nominee, Founder of The Oxford Research Group and Peace Direct, and Author of The Business Plan for Peace

As the world is witnessing unprecedented technological change, the question of how innovation can serve more people is front and center. This book makes a strong case for how products and services are more inclusive and higher quality when women are inside innovation labs.

WILLIAM SONNEBORN, Senior Director, Disruptive Technologies and Funds, International Finance Corporation

Gender-diverse teams outperform. The XX Edge details why and how having women in investment rooms is critical to building portfolios that drive doing well and doing good. Thank you for getting this important content into the world. People and the planet are depending on us getting this right. We can shift our economies to ones that work for everyone. Clearly, women as investment decision-makers are essential to achieving a sustainable world.

KRISTIN HULL, Founder, CEO, Nia Impact Capital

This clear and compelling book shares robust research and real world examples which demonstrate that greater gender inclusion leads to a larger opportunity set, paving the way for higher returns on ones capital. Investing is not a zero-sum game: female investment managers, asset owners, and corporate managers can dramatically increase our collective financial results.

BRENT KESSEL, Cofounder of Abacus Wealth Partners and Author of Its Not About the Money

The books comprehensive coverage of the subject matter, from personal anecdotes to milestone events, from solid research to evidence in practice, sends a powerful and convincing message that XX factors are essential for humanity to achieve better social and economic outcomes and for investors to do well by doing good. I highly recommend this book.

JINGDONG HUA, Former Vice President and Treasurer of the World Bank

Dedicated to all the changemakers and to our mothers:

Farirai Pfupajena, teacher, and Betty Miller Ball, champion of changemakers

Sandra Shabereconomist, feminist, and proud capitalist

INTRODUCTION

I F YOU ARE MANAGING INVESTMENTS , either your own or on behalf of clients, your primary goal is to generate the best returns possible and grow these assets. What most investors dont realize is that when more women are involved in financial decision-making across all entities that make financial decisions (including governments, private and public companies, investment funds, real estate development, and individual households), money is managed more efficiently and effectively, investments are more profitable, and companies and governments make better decisions that benefit individual investors and, ultimately, the overall economy. You can put this knowledge to use. This is what we call the XX Edge.

Investing is not a zero-sum game. Untapped investment opportunities can be found at the intersection of gender and finance. Nevertheless, many investors still base their investing decisions on the notion that the total amount of the worlds assets is fixed and that if one investor is gaining, another must be losing. Milton Friedman memorably wrote in 1980, Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another. Instead, expanding the use of diverse talent in financial decision-making optimizes returns, grows the overall economy, and extends more opportunity to everyone. Optimizing human talent leads to more innovation and results in expanding financial returns for investors. Womens leadership skills are currently underutilized across all capital markets. Women represent only a small fraction of the individuals making the financial decisions that impact domestic and global economies. This underutilization leads to inefficiencies and missed opportunities in the markets. In general, women are poised to tackle the challenges ahead of us because they are closer to most of the problems that need to be solved, utilize collaborative leadership styles, are more aware of risks (and therefore conduct due diligence and prioritize investment allocation differently), and take the long view in financial decisions. Womens financial leadership will lead to more innovation, stronger investment returns, and accelerated economic growth.

When the financial services industry successfully includes women in decision-making roles and optimizes their skills across all capital markets, the individual investor will enjoy higher returns and benefit from the innovation and economic growth. Diversity makes the team stronger and offers you and others better returns. Those who are open to innovative ideas from all sources and who have confidence in their own potential while understanding that a more diverse team does not take them out of the game are positioned to capitalize on this opportunity and dramatically grow their wealth.

The field of gender-focused investing is about to be flipped. Traditionally, the field has prioritized how finance can improve the lives of women and girls and thereby lift families and communities. Consider a different paradigm: one with women at the center of investing as agents and actors, not just as beneficiaries.

Gender analysis is the secret to unlocking better financial performance for all investors. The evidence is clear that when women share in the control of capital (as board directors, CEOs, entrepreneurs, borrowers, heads of government), better social and financial outcomes are the result. Furthermore, when women are included in decision-making, they build solutions that also benefit their families and communities. When women have access to more money, they build wealthier and healthier economiesat family, community, national, and global levels. They make the economy grow and bring better outcomes to everyone. To be clear, this new paradigm demands we move away from the idea that microfinance is the only type of capital that we associate with women. We must open all types of capital to the full participation of women and have them involved in all allocation decisions.