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International Women's Day: Fillip to women equality could push global GDP up to 31%, says report

In Asia, women comprise 49% of the population and 36% of GDP, but just 12% of board seats and 3% of CEO positions, the report by Bank of America Merrill Lynch (BofA-ML) said.

twitter-logoBusinessToday.In | March 8, 2019 | Updated 13:33 IST
International Women's Day: Fillip to women equality could push global GDP up to 31 per cent, says report
onstituting almost half of the world's population, women equality could boost global Gross Domestic Product (GDP) by 31 per cent or $28 trillion by the year 2025, according to report by Bank of America Merrill Lynch (BofA-ML)

Constituting almost half of the world's population, women equality could boost global Gross Domestic Product (GDP) by 31 per cent or $28 trillion by the year 2025, which is the combined size of the US and China GDP, according to report by Bank of America Merrill Lynch (BofA-ML).

With women driving change in the labor market, the workplace, home and wealth management sector, the report envisaged that by 2020 women will hold $72 trillion of the world's financial assets, double the 2010 level and acuumulate assets 1.5 times faster than men, as quoted by Financial Express from the report. 

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The report meanwhile, also cautioned that a lot needs to be done when it comes to ensuring gender parity, "There is still much to do. The economic gender gap is reducing at a snail's pace, and all being equal, will not close for centuries - 202 years," the report said.

Also Read: International Women's Day: Air India to fly on 52 routes with all-women crew; GoAir offers complimentary upgrade

Meanwhile, despite the rise in focus on diversity, the US trails other developed nations in both pay and policy gaps. In corporate America, there are four men for every woman in the average S&P 500 board, only 5% of companies have a woman at the helm, whereas, the S&P 600 small cap index (which represents more established corporations) fares even worse on these statistics.

But, the report on the brighter side observes that the incentives to close the gender gap in the US are evident. "Our work suggests that companies focused on gender diversity at a board, C-suite and firm level have consistently achieved higher ROE and lower earnings risk in the subsequent years. Moreover, companies focused on diversity have generally traded at a premia to more homogeneous counterparts," it stated.

Also Read: Google celebrates International Women's Day with quotes from Mary Kom, Yoko Ono, 11 other superwomen

Looking at the country wise data, Europe has manifested remarkable shift in ensuring gender equality and representation where the percentage of women in corporate boards has surged 3 times over the past 15 years.

Within which, the ones in executive positions have jumped by 60% over the past five years with every 1 in 6 of executive members now women. Furthermore, this trend is expected to rise in line with the European Commission's goals for 2020 to increase the employment rate for women to 75% from its current 64%.

"Equity investors should take this positively as stocks that have seen rising diversity on boards have seen lower volatility in earnings and dividends." the report says.

Also Read: International Women's Day 2019: Tips to help single women reach financial stability

Looking at numbers in Asia, women here comprise 49% of the population and 36 per cent of GDP, but their numbers on board seats (12%) and CEO positions 3%) are dismal. BofA-ML's proprietary data on Asian boards shows that the lack of gender diversity is most acute in InfoTech, Industrials and Consumer Discretionary sectors.

BofAML's proprietary database on Asian boards shows the lack of gender diversity is most acute in Info Tech, Industrials and Consumer Discretionary.

"Asia Pacific stocks with at least two female board members have a P/E premium, and higher net profit margins (+3 percent) and dividend yield. Much needs to be done to close the gender gap but progress is being made in tertiary education and laws to support equal pay and government-assisted childcare. Industry sources value the potential uplift at $3.2 trillion to $4.5 trillion of incremental GDP," the report stated.

Also Read:Women's Day 2019: Female labour force participation fall from 36.7% in 2005 to 26% in 2018

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