The sustainable investor for a changing world

Many studies have shown that having women on company boards of directors is good for business. For us as an asset manager, there is a direct link between weak corporate governance and the balance of power.

For example, executive teams where women account for more than 30% of the total are more likely to outperform those with fewer or no women. [1]

Exhibit 1: Executive teams with more than 30% women are more likely to outperform those with fewer or no women – graph shows percentage of women and the likelihood of financial outperformance of the national industry median (2014-2018 data)

diversity graph NA

Note: Sample of 365 US and UK companies. Source: Diversity matters via

In 2019, we published our Global Sustainability Strategy. This outlines a forward-looking approach to systemic challenges built on three thematic pillars:

  • The energy transition to a low carbon economy
  • Environmental sustainability
  • Equality and inclusive growth.

One aim of our work on equality is to encourage companies to provide greater opportunities for women at all levels of the organisation.

Since 2019, our voting policy has had an explicit provision on gender diversity: We oppose all male candidates for director if there are no women on the investee company’s board worldwide.

For Europe, North America, Australia and New Zealand, we reinforced our voting policy in two ways from 2020:

  1. We have set a minimum threshold of 30% of women on the board
  2. We will vote against all male members if the board is not at least 20% female. [2]

A focused engagement strategy on gender diversity

For each vote at shareholders meetings, we check if companies respect our voting policy, especially our new gender ratio.

For companies that did not respect our policy at the beginning of 2020, we established a target list. We engaged with companies where we had significant stakes.

Our target list contained 23 companies in actively managed portfolios – 12 in Europe and 11 in North America. We contacted them to explain our policy and asked for a meeting. With 14 companies (61%), we conducted calls and exchanged emails. We had a 30% success rate: Seven companies adopted changes in line with our voting policy. [3]

Positive outcome730%We managed to achieve a positive outcome with improvement of the gender diversity and a vote in favour of board elections
Pending outcome313%These are cases where we had some positive feedback, but we are continuing the engagement in 2021
Negative outcome1357%We opposed board candidates either because of a lack of improvement on diversity, but also because of a lack of independence and for other reasons.

Pushing equality on board

We will continue push companies on gender diversity by applying the 30% threshold for female representation for North America, Europe, Australia and New Zealand. We seek to apply a similar threshold rule to South African companies starting in 2021.

For other markets, we asked for at least one woman to be present on the board in 2020. These include Asia and Latin America. This year, we are increasing the threshold to 15%. We will make an exception when at least 10% of the board is gender-diversified and when we see meaningful steps in the right direction, including a commitment to reach 15% within two years.

We will continue to engage with companies in Europe, North America and Asia on our new policy, and report each year on our progress, since we believe that having women on the board of directors helps ensure that companies deliver long-term sustainable value.

However, we also have a longer-term ambition as future makers – to push gender diversity further. In our voting policy, we have included our objective for a 40% threshold by 2025.

[1] Study by McKinsey & Company, “Diversity wins: How inclusion matters”, May 2020. A) Likelihood of financial outperformance vs. the national industry median, calculated as earnings before interest and taxes (EBIT) margin over 2014-2018; B) Based on 365 US and UK companies from the Diversity Matters dataset, diversity figures as of 2014.

[2] Under certain conditions, we could support boards with a ratio between 20% and 30% of women; for example, if significant improvements had been made in recent years, or if the company had committed to reaching 30% in two years’ time.

[3] For example, Segro Reit Plc, BT Group Plc (United Kingdom), Logitech International (Switzerland) and Comcast (USA) did not respect our threshold in 2019, but reached more than 30% of female directors for their annual general meeting in 2020.

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