Funds vow to vote against appointments to boards lacking women

 12 October 2016

Jupiter Asset Management and Old Mutual Global Investors have committed to vote against board appointments in companies that do not have enough women executives.

Newton Investment Management, the Environment Agency Pension Fund and Eden Tree Investment Management have also made the same commitment, with other fund managers under pressure to improve the diversity of the companies in which they invest.

The 30% Club, which campaigns for greater representation of women in corporate senior management, will call on Wednesday for more fund managers to follow suit and vote against board appointments in companies that show no progress.

"It is vital that investors engage with companies on the issue and, where appropriate, exercise their ownership rights through voting in the event of inadequate responses by boards," said Brenda Trenowden, who chairs the 30% Club and heads the financial institutions group for Europe at ANZ bank.

"This could involve voting actions in listed companies in two areas: disclosure expectations and exercise of ownership rights regarding directors' elections and reporting."

The 30% Club's statement of intent will be launched at a round table event at the London Stock Exchange attended by Sir Win Bischoff, chair of the Financial Reporting Council, Caroline Dinenage, undersecretary of state for women and equalities, Euan Munro, the chief executive officer of insurer Aviva, and Xavier Rolet, chief executive of the London Stock Exchange, among other senior representatives of the asset management industry.

The move came after the launch of a government charter aimed at improving gender diversity. On Tuesday, UK banks and financial bodies spelt out ambitious targets for female representation in a push to improve the number of women appointed to senior roles in the sector.

Of 72 companies to sign up to a recently launched government charter aimed at improving gender diversity, 60 have pledged to having at least 30 per cent of women in senior roles by 2021.

Thirteen groups - among them Virgin Money and Legal and General - are aiming for gender parity in senior positions, while banks including Royal Bank of Scotland, Lloyds Banking Group, HSBC and Santander will publish in greater detail their strategies to improve gender diversity. Fund houses Schroders, BlackRock and Aberdeen have also signed up to the charter.

The charter was launched in March following a review into ways to improve gender balance in the industry.

The review, led by Virgin Money chief executive Jayne-Anne Gadhia, who will attend the LSE event on Wednesday, found that women made up only 14 per cent of executive committees and struggled to reach the top positions of financial services companies.

It suggested executives at banks and other financial services companies should have their pay tied to the number of women appointed to senior roles but stopped short of calling for a certain number of women in senior roles by a certain date.

Theresa May, prime minister, said: "Too few women get to the top and many don't progress as quickly as they should or they leave the sector completely."

Asset managers have also come under fire for woeful underrepresentation of women and ethnic minorities in their own market. According to the latest figures, fewer than one in 10 UK funds is managed or co-managed by a woman, and in the US that figure is much worse: only 184 of America's 7,000 mutual funds are run by female portfolio managers.

In an attempt to correct this, a group of Europe's largest asset managers, including Aberdeen, Schroders and Allianz Global Investors, in June signed up to a campaign, called the Diversity Project, to ensure diverse recruitment across the industry in terms of gender, ethnicity, socio-economic background, age, sexual orientation and disability.

Helena Morrissey, the founder of 30% Club who will chair the Diversity Project, said at the launch: "The asset management market has gone backwards in terms of diversity and something had to be done about it. We have definitely worsened compared with other industries. Enough is enough."

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