How to Lose Gen Y Investors and Alienate People

This article cross-posted from The Lattice Group blog. Liz Kofman is the co-founder of The Lattice Group, a non-profit that conducts research and sparks dialogue about work-life issues from a Gen Y perspective, and a PhD candidate in Sociology at UCLA.

There is absolutely nothing I love more than a good deal. So when the stock market tumbled on Monday, I went bargain hunting for stocks.

(If you haven’t invested a dime yet, because you are either scared or indifferent, here are two words that should change your mind: compound interest. Here is a good primer on why investing young is important, and another link about how to start.)

One company that caught my eye was Zipcar, the car-sharing service. Sure, they haven’t made a dime in ten years but I think this kind of operation takes a while to get going, they have great name recognition, and they just expanded to the UK. Brits don’t mind small, silly looking cars so I think things are looking up. While doing my research, I glanced at their Officers and Directors. Here they are (after the jump):

Notice anything strange? They’re all men. This was a major turn off. I won’t deny that I was simply a bit offended they couldn’t scrounge up at least a token woman to put on their board. What are we, chopped liver? But more importantly from an investing standpoint, it just doesn’t seem like a prudent business strategy.

How can a company expect to thrive in a market where 50% of potential customers are women, when they don’t have a single female voice in the boardroom? This isn’t some crazed feminist rant, I swear. It just seems like common sense.

Remember that scandal at The New York Post a while back? When a cartoonist drew President Obama as a chimp? I’ve always felt that if there was a single black person on the Post’s editorial board they would have said “Hey, heads up guys, some readers are not going to like this. Let me tell you a story about the pre-Civil Rights era…” Crisis averted.

Anyway, I got increasingly miffed when I noticed this wasn’t some aberration. Nearly every company I was interested in didn’t have a single woman listed among their officers and directors.

I was annoyed because I had saved my pennies and wanted to invest them with a solid, undervalued company that would make me filthy rich one day. Or at least help me pay of student loans. But I really didn’t feel good about betting on a company that, in the 21st century for crying out loud, had a board full of men sitting around a table talking about golf.

This wasn’t just a gut feeling, a preponderance of research bears it out:

• A McKinsey study of European companies found that companies with the highest level of gender diversity in top management positions outperform their sector in terms of return on equity and stock price growth.

• A report by Catalyst, found that Fortune 500 companies with 3 or more women on the Board gain a significant performance advantage over those in the bottom quartile of gender diversity, including a 73% return on sales, an 83% return on equity, and 112% return on invested capital.

• A Pepperdine University study that tracked 200 of the Fortune 500 companies over several years found a consistent correlation between high-level female executives and corporate profits. In every one of those years, the companies identified as being the best at promoting women outperformed the industry median on all three profitability measures.

• And so on.

Yet, in 2006, less than a third of the largest 1,500 US companies had even a single woman on their top management team. Overall, women represented less than 9% of top managers.

Annoyed and with plenty of time on my hands, I wrote Zipcar an email. It felt good. Then I thought, what if a lot of people wrote similar emails telling companies that they won’t invest until there are women (notice the plural) in their boardroom. I hear the internet is great at facilitating this kind of stuff.

And, what do you know, it is. Check out this nifty petition I created on change.org.

If you sign the petition you vow not to buy stock from a company that doesn’t have women on its board. When you sign it, the CEOs of 40 publicly traded companies (that was the max I could send it to) with 70% or more male boards will receive an email. If you can’t beat them, annoy them.

And, finally, keeping the above post in mind, anyone have any good stock tips?