Embracing feminine models of leadership: An interview with Halla Tómasdóttir

Halla Tómasdóttir is CEO and Chief Change Catalyst for The B Team, a group of global business and civil society leaders driving a better way of doing business for the well-being of people and the planet. As well as having leadership roles in Corporate America with M&M and Pepsi Cola, Halla was the first female CEO of the Iceland Chamber of Commerce and later went on to co-found Auður Capital, an investment firm with the vision of incorporating feminine values into finance. In 2016, Tómasdóttir was an independent candidate for President of Iceland, earning nearly 30% of the vote.

Halla joined GenderSmart to share her thoughts on the changes (or lack thereof) she has seen within the gender lens investing world over the past fifteen years, why we need to embrace feminine models of leadership and why she believes that quotas can benefit everyone.

What has changed in the world of gender lens investing over your career?

Back when I was one of the co-founders of an investment firm in 2007, I don't even think that the term “gender lens investing” existed. We set out to create an investment firm with an ESG lens – which was pretty new at that time – and to put feminine values into finance. At the time, I was not aware of any wealth management firm or any private equity or venture capital fund with a gendered focus. 

“We’ve come a long way rhetorically, but I am not sure we’ve made much progress when it comes to putting more money in the hands of women managers, women investors and women entrepreneurs. ”

In many ways we've come a long way since then – the term is well-known to most people and we are talking about gender more frequently. However, when we founded our investment firm, the data told us that somewhere between 2-3% of institutional capital was invested with women and people of colour. According to data from the US last year, as far as I have been able to tell, it is still only 2% of venture capital that goes to funds managed by women or investing in women. So we've come a long way rhetorically and narratively, but I am not sure we’ve made much progress when it comes to putting more money in the hands of women managers, women investors and women entrepreneurs. And I think we would certainly have a better world if we had moved money at scale into the hands of women.

What are you doing today to influence that shift?

I run The B Team, a nonprofit that is advancing business for a better world. There are a few things we're doing that are relevant to this area. First and foremost, we have an important campaign around disrupting the conformity in leadership and management in the boardroom. We do this by closing the gender gaps, the racial gaps, the generational gaps, but also by expanding perspectives so we can actually see the problems we're trying to address and work out how to solve them more effectively. 

Another focus of ours is establishing global baseline ESG standards so we can start comparing companies with the same transparent disclosures. Gender has to be front and centre in those metrics. While the ‘E’ is the part of the ESG formula that is getting most attention right now, the ‘S’ has to follow fast because you cannot address climate challenges without understanding how gendered both the impact and the solutions to climate change are.

We see gender as a lever to drive the innovation and transformation we're looking for, both inside of individual companies and sectors and, more broadly, in the system that was created largely by men at the expense of feminine values. If we want to live in a world where caring for people and the planet is the norm, and not the exception, I believe gender is the lever that will help us get there.

How can policy help?

I was involved quite deeply in the quota debate in the Nordics, and in particular in Iceland, and I feel that we cannot afford to nudge our way towards a more gender balanced world. Gender is the single most powerful lever for us to really transform the value system that lies at the heart of organisational culture, business culture and our economic models. And so, I am in favour of setting targets – hard targets – and if we can't achieve hard targets, we should consider policies like the quotas that we implemented in the Nordics.

I can say with some certainty that the benefit of gender quotas for the boardrooms in Iceland, for example, has not just been experienced by women. Male board directors experienced a significant improvement in board dynamics and the overall functioning of the board. My general view is that it is always good to start with voluntary targets but if we’re not seeing progress with those, we should consider whether policy changes would be in our best interest. 

Who do you think the leaders in gender lens investing are now and why?

“We’re going through probably the biggest transition since the Industrial Revolution and any investor who wants to succeed and deliver meaningful returns during this next decade or so is going to have to incorporate this new way of thinking into their general investment strategy.”

I don't think I would identify a single organisation; I would put it under the umbrella of impact investors. Those who embrace the impact investing mindset are most likely to consider gender as part of their investment strategy. So, that's often family offices or women investors or the next generation of investors, but more generally it’s those who are embracing broader metrics than short-term financial profit by the quarter. 

We have plenty of data that shows us that women and younger entrepreneurs are much more likely to embrace a compelling social purpose and a broader definition of success. So rather than two or three key players, I think this is more of a grassroots movement that is, by and large, being powered by women. We're going through probably the biggest transition since the Industrial Revolution and any investor who wants to succeed and deliver meaningful returns during this next decade or so is going to have to incorporate this new way of thinking into their general investment strategy.

Where do you think the resistance to change lies?

We have created a worldview of capitalism that is based on competition over care, and on a narrow definition of success. I really believe that the challenge is not that people don’t see the opportunity or the risks of embracing future-fit leadership but that they are struggling to find a way to drive the transitions needed in a broken system. 

“I believe we have to get a lot more serious about changing how we think about leadership and investing if we are to build the kinds of organisations we need now.”

Also, though, we need tactical interventions to drive transformation; getting much more serious about gender quotas, who manages the money, who sits in the C-Suite, who gets to be in the room when we’re discussing the climate crisis. I think that is a critical intervention to disrupt the crisis of conformity that our broken system continues to breed.

I’m discouraged by the lack of speed and scale that is directed at something so transformational and necessary. I believe we have to get a lot more serious about changing how we think about leadership and investing if we are to build the kinds of organisations we need now. There is no future for business, for entrepreneurship, for investment with this broken model. The reset needs to happen with more women, young people and people from the Global South at the table. All the data tells us that this is not only the smart thing to do economically but it is also a way of progressing our societies, our communities and our world towards a place where people and the planet can survive and thrive.