30% Club outlines Investor Group ‘clout’ as it plans global strategy

Shareholder initiative that started with UK fund managers to be rolled out internationally.

The head of a high-profile Investor Group of UK investment managers seeking to improve gender diversity on FTSE boards has said the group, which has a combined AUM of over £5trn, has the “clout to make a big impact” on the issue, as the groups plans to go global.
Emma Howard Boyd, former director of Stewardship at Jupiter Asset Management and the lead at the Investor Group of the 30% Club, which is pushing for the voluntary promotion of more women on to company boards, said: “Investors are in a unique position to encourage companies to improve their gender diversity.” The 30% Club’s Investor Group includes the London Pensions Fund Authority, J P Morgan Asset Management and BlackRock Asset Management and 20 other asset managers. Its most recent member is Old Mutual Global Investors, which joined this week.
The 30% Club held a seminar in London this week hosted by Goldman Sachs where a number of high-profile UK business figures called on investors to use their shareholder muscle to urge corporates to push the needle on gender diversity on FTSE boards. Sir Roger Carr, chairman of BAE Systems, said investors needed to support, challenge and call executives to account on gender. Sir Win Bischoff, chairman of the Financial Reporting Council, said investment institutions had an “enormous influence” on boards and suggested they could challenge boards with aspirational targets to meet. Ian McVeigh, fund manager, UK equities at Jupiter Asset Management, said it was increasingly asking questions on gender diversity when meeting corporates it invested in.
However, Sandra Carlisle, head of responsible investment at Newton said it would be more powerful if the investors spoke about the issue as “one collective voice”. She said other investors needed to come on board and see gender diversity as a business issue: “We need stronger advocacy measures”, she said.
Fund managers, including Aviva and Legal & General, have said they will vote against the appointments ofchairs of nomination committees or non-executive directors at companies if there is not enough progress on gender. Other managers have taken a less overt stance.
Clare Payn, international corporate governance manager at Legal & General Investment Management, mooted voting against the chairman if a company did not put measurable targets or a policy in around gender diversity: “We need to stick by our interventions,” she said.
Helena Morrissey, CEO of Newton and 30% Club founder, said a board confidence index, which is in the pipeline for the UK, could help. In Australia, she said, there is an index which rates investor confidence in a company’s board and its chairman: “If as a chairman you were in the bottom quartile you would be trying to improve.” She said that there were efforts to bring in a similar initiative in the UK. In an interview published in Responsible Investor today, Morrissey said the 30% Club had been working on the issue of shareholder pressure with the committee working on the UK government’s Davies Report, which set a 25% threshold for women directors by 2015, because “they don’t think investors generally have delivered”. Morrissey said the 30% Club was also pushing forward with efforts to globalise its investor group to increase its power to push the agenda with corporates.
The UK 30% Club’s model has been replicated in a number of countries including the USA and Hong Kong, with launches set in Canada and Australia. At the end of June, the Canadian government’s advisory council issued a report recommending that women make up 30% of corporate boards nationally within five years and that a “comply or explain” approach be implemented to incentivize public companies to meet that goal. Peter Grauer, chairman at Bloomberg is the founding chair of the US 30% Club. His deputy chief of staff, Kiersten Salander, said investors had a huge role to play on the issue: “We now have 20 investment asset managers on board with $9tn AUM. BlackRock for example are supporters, so there is the opportunity to make this a global effort.”

Link to RI interview with Helena Morrissey