Thursday 22 November 2018 12:56 pm

Gender diversity is starting to drive asset managers’ voting decisions

Jess Clark is a City A.M. news reporter covering private equity and investment.

Jess Clark is a City A.M. news reporter covering private equity and investment.

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More than half of asset managers actively engage with UK companies over gender diversity as boardroom equality begins to drive voting decisions

Four in 10 asset managers said they had made a voting decision based on the gender diversity of the company, the Investment Association said, as it revealed that 80 per cent of survey respondents believe engagement leads to better investor decisions.

The news comes a week after a government backed study found that just four FTSE 100 companies’ boards feature at least as many women as men and five FTSE 350 firms still have only male board members.

Investment Association chief executive Chris Cummings said: “Our members play a key role as stewards of the £7.7trn they manage on behalf of savers and investors. With more than 30 staff in every firm dedicated to stewardship activities, and with each asset manager making more than 150 engagements each so far this year, it is clear that the industry is taking its stewardship responsibilities seriously.

“Investors clearly want to see more women in the boardroom and senior management positions, and our study shows that companies who are lagging behind on gender diversity should expect investors to take action if they do not see enough progress.

“Initiatives such as the Hampton-Alexander Review have highlighted the need for greater diversity at the top of UK PLC.

“The fact that more than 40 per cent of asset managers took a voting decision based on gender diversity shows that they are reflecting those concerns when it comes to engaging with companies and voting at their AGMs. Companies should expect greater scrutiny on diversity issues in the future, and should be acting now to address the imbalances they have at the top.”

The Investment Association’s stewardship survey is based on responses from 59 firms covering the first six months of this year.