Happy International Women’s Day
Today is March 8th so let’s celebrate women’s economic and social achievements. I watched an 11min interview featuring a couple of representatives from TD Bank. Ms. Caranci is an economist and Ms. Caskey is a portfolio manager. They mentioned that studies from Credit Suisse and other notable institutions show that corporations with more female board members outperform those that have less. For example looking at the S&P/TSX Composite index over the last year companies with at least one woman on the board have seen a 7.2% return on average, while the overall index returned just 4% 😀 Makes sense to me. Women represent half the consumer market place. So if I was running a company I would certainly want to have a woman’s perspective when it comes to making strategic business decisions. It’s too bad that only 11% of board members of companies on the TSX Composite are female. In the interview, Ms. Caranci says this is partly because of the composition of our industries. For example, half the stock market index is made up of resource companies and they “only have 6 to 7 percent representation of women, so they’re really pulling down those numbers.” So what can corporate Canada do to get more women represented on company boards? There are a few ideas floating around. For instance some European countries have strict quotas for their companies. In Norway publicly traded companies must have at least 40% female representation on the board, or else the company faces penalties or sanctions, such as being de-listed from the stock exchange 🙁 I don’t think Canada should necessarily adopt those kinds of laws because some argue mandatory quotas does more harm than good for women in the workplace, but I’m sure we can figure something out.
So how can the average investor use this information? Well since the research has suggested that a board of directions with a diverse background of both men and women tend to outperform the benchmark, we should consider this information when researching which stocks to buy. Thankfully, Ms. Caskey gave us a list of some notable companies that have a relatively high female representation on the board or executive team. I’ve listed a few below. Stock symbols are in (brackets) 😉
Potash Corp (POT) – 23% female board
EnCana (ECA) – 30% female board
Lululemon (LLL) – 45% female board
I currently have POT and ECA in my long term buy and hold portfolio. LLL is a very interesting company that started in Vancouver and has expanded very successfully into other countries. The brand was even featured on Oprah, lol. I’m a little concerned about the stock’s valuation because I don’t know how long it’ll continue to grow at its current rate. So this athletic apparel company is only on my watch list for now (^_^) Side note: LLL is not included in the TSX Composite index.
How about some good news to end the work week 😀 Canada created 51,000 new jobs last month, and most of them are full-time work. The overall unemployment rate remains unchanged at 7.0 from the month prior, however this means more people are in the workforce which is a good thing. ON and BC made up most of the gains, with 35,000 and nearly 20,000 new jobs respectively. In the United States about 236,000 new jobs were created in February and unemployment edged down to 7.7% which gave investors the confidence to push the Dow Jones Industrial Average up by almost half a percent today to end the week at $14,397, yet another record high 😀
Thanks for the mention. Gotta say, I’m a little surprised that Potash has that many female board members. I thought POT was an agriculture/industrial company so I would have assumed it’d be stocked with good ol’ boys.
LULU gives me flash backs to Crocs in the first few years it was listed. I’d wonder – Are they diversifying better and earlier than Crocs? Because the products seem really overpriced for a non-traditional luxury good.
I’m not good at predicting trends. Lulu could be another fad 😉 but it’s hard to say. If only I bought them in 2009 I would be half way to retirement by now.
Thank you for the mention! I would feel bad thinking I am in a board to meet the quota but may not stand a chance at all in male dominated environments, that is a complicated topic.
It’s complicated indeed. Sometimes good intentions can be seen the wrong way.
Good to hear jobs are being created as so many people have been struggling to find work. I know alot of people complain when businesses like Target from the USA come in but jobs are jobs I guess. Thanks so much for sharing a CBB post, much appreciated. Have a great weekend. Mr.CBB
Thanks, I did 🙂 Hope your’s was too.
I think it is great more jobs are opening up. Everyone should be able to earn a living and support their families.
Our national unemployment rate has been stuck at 7% and above for awhile. It would be nice to finally see that number go down 😀
Thanks for including my post Liquid! I don’t know much about the stock market but I know that I LOVE Lululemon and I really don’t see the brand slowing down anytime soon. My 2 cents 😉
Thanks for the input. Stocks are really fun, but be careful. Once you start it can be really addicting lol.