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Investors Turn up the Heat on Gender Balance

Fund bosses take to the road as State Street prepares to broaden its voting policy against all-male boards.

  • Joe McGrath

Asset managers are widening efforts on gender diversity by toughening up on voting and embracing new engagement approaches.

Starting Monday, fund bosses such as Allianz Global Investors’ Elizabeth Corley, Legal & General’s Helena Morrissey, and Euan Munro of Aviva Investors will champion the cause at a series of events throughout the week. Meanwhile, State Street Global Advisors is preparing to expand its blanket “vote no” policy beyond the U.S., U.K., and Australia, where it has been voting down all-male boards.

Since the start of the year, SSGA, along with Legal & General Investment Management, has been actively voting against companies that have proposed no female representation on their board of directors.

Now, SSGA is planning to turn up the heat still further to cover another 1,000 companies from the early part of next year. Rakhi Kumar, head of ESG at SSGA, told Institutional Investor that another two regions will be added in next year’s proxy voting season, although specific details are being kept under wraps.

Kumar added that investors who “gravitate towards ESG solutions” have told SSGA that gender diversity has a material impact on long-term returns – a sentiment being heard at asset managers throughout Europe and beyond.

[II Deep Dive: Aberdeen, Helios Fund Push for Gender Diversity]

Corley, vice chair of Allianz Global Investors, is due to speak at a CFA Institute event on Monday, and stresses that progress is “all driven by the people that own the assets.”

“Some pension funds and some high net worth investors are making this more explicit in their due diligence process and this client drive has sparked an active discussion within the asset management firms,” she said.

These investors will be keeping a watchful eye on the next annual installment of the FTSE Women Leaders report, due in the final quarter of the year. The report charts the composition of senior management, by gender, of all FTSE 350 companies, naming and shaming those lacking gender balance. This year’s submission deadline for data passed at the end of July.

Asset managers invested in those companies which failed to supply data by the deadline have been leaning on them to do so. Their approach has been negotiated through the investor group network within the 30% Club, an initiative championing gender diversity in business.

Brenda Trenowden, global chair of the 30% Club, said members of the investment group – which includes pension funds and fund firms – are engaged because they believe a diverse board will lead to better long-term performance.

“On the pension fund side, I have seen many more funds wanting to be involved in the discussion,” she said. “This is a criterion they are looking at much more, and it’s not just in the U.K. but globally.”

On Monday, one of Trenowden’s partners in the 30% Club, Legal & General’s Morrissey, will join Aviva Investors CEO Munro and others talking about broader diversity themes at the Commitment to Diversity conference taking place at Aviva’s offices in London.

On Tuesday, Morrissey will take the stage at M&G Investments’ offices for Restart, an event designed to get women who previously held roles in fund management, but left to start a family or take a career break, back into the industry.

Also on Tuesday, the International Capital Market Association is holding its Starting Out networking event in association with the European Investment Bank in Luxembourg, where prominent female figures from the financial world will offer coaching on profile building, career paths, and barriers to entry.

Then, on Thursday, the U.K. Treasury’s Women in Finance Lead Shannon Cochrane will update delegates at the Association of British Insurers’ Talent and Diversity Network on government initiatives on gender diversity and the progress that has been made since the Women in Finance Charter was launched a year ago.