30% Club investor Standard Life Aberdeen fails Hampton-Alexander and gender pay gap reporting tests

LGIM made an exception and did not apply its gender voting policy against laggard boards

The UK Government-backed Hampton-Alexander Review has singled out Standard Life Aberdeen as one of the FTSE 100 bottom ten companies in need of improvement when it comes to female board representation, as well as gender pay gap reporting, according to a report by Cranfield School of Management.
The annual review, which started in 2016, reports an overall improvement among FTSE 100 constituents towards achieving the 33% target of women at board and executive committee levels by 2020, while progress among FTSE 350 companies remains slow.
Standard Life Aberdeen, currently with three female board directors out of 15 seats (20%), has dented its progression, falling from 69th place to 92nd over the past year in the FTSE 100 ranking. According to last year’s Review, it had four women at its 16-strong board (or 25%) and a 21% rate when it comes to executive committees and direct reports (an area in which it has improved this year to 31%).
Standard Life Aberdeen is a prominent member of the 30% Club – which aims at achieving a minimum of 30% women on FTSE 350 boards by 2020 – with Chairman, Sir Gerry Grimstone, and Co-CEOs, Keith Skeoch and Martin Gilbert all signing up to the initiative.
The 30% Club also has a UK Investor Group with 32 member firms representing about £11trn, co-chaired by Standard Life Aberdeen’s Governance & Stewardship Director, Deborah Gilshan, and Legal & General Investment Management’s Head of Corporate Governance North America, Clare Payn.
In February this year, the 30% Club marked, at a London Stock Exchange’s opening market ceremony, “the phenomenal take up” of the UK Investor Group’s membership, which has expanded to global firms joining the initiative.
The UK Investor Group seeks to “exercise ownership rights, including voting and engagement, to effect change on company boards”.
Legal & General Investment Management (LGIM) has committed to deliver such a pledge – voting in 2018 against board directors of companies lagging behind the 30% mark featured by the Hampton-Alexander Review, such as Barclays, Prudential or St James’s Place.
But LGIM has also made exceptions, including Standard Life Aberdeen.Another is the London Stock Exchange Group, with two women on its 12-strong board (16%). It is still near the bottom of the FTSE 100 ranking, after climbing three spots from last year’s 100th, when it had just one female board director (Mary Shapiro, who recently resigned).
Asked about its voting record, LGIM declined to comment.
Standard Life Aberdeen is also at the bottom of a Cranfield’s Female Board Report 2018 table when it comes to gender pay gap (GPG) reporting, as the firm did not report data.
Co-author of the study, Professor Ruth Sealy of University of Exeter Business School, told RI that Standard Life Aberdeen declared itself “out of scope” for the GPG reporting, as not an employing entity.
Mandatory gender gap reporting regulations were introduced in the UK for “relevant employers” in 2017.
“Standard Life PLC became Standard Life Aberdeen in August 2017, which means they did not have the data for that year. However, as Standard Life Aberdeen exists and has over 7,000 employees registered, we would expect to see their GPG data for 2018 logged on the government website by April 2019,” Professor Ruth Sealy said.
She added: “Interestingly, Standard Life Employee Services and Standard Life Investments did report in April 2017.”
A spokesperson for the 30% Club was unable to comment as “Brenda Trenowden [Global Chair] is away for the rest of the week”.
A Standard Life Aberdeen spokesperson told RI in a statement: “We are committed to improving the diversity of our Board. This year we set a published target for women to represent 33% of our Board by 2020 and have a published Board diversity policy, ensuring we support the principle that our Board benefits from a make-up which is diverse in its broadest sense, including gender. We also believe it’s not just about gender balance at Board level, but building a progressive and inclusive culture across all levels in the organisation which is critical to making a difference. Therefore, while more work is required, it is encouraging that the diversity at a senior management level is improving.”