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L&G steps up action against firms with few female board members

Kalyeena Makortoff


The UK’s biggest fund management group voted against more than 100 chairmen last year, at firms including Barclays, Ted Baker and Sports Direct, for failing to boost the number of women in their boardrooms.

Legal & General Investment Management, which manages more than £1tn in assets, more than doubled the number of protest votes cast in 2018 over a lack of gender diversity. A year earlier the asset manager only voted against 37 UK chairmen.

This also marked a significant rise on 2016, when just 13 chairmen were targeted for falling below targets aiming to see women make up 25% of the company’s board.

The benchmark meant LGIM voted against the re-election of Sports Direct’s ex-chair Keith Hellawell, Barclays’ chair John McFarlane, and Nicholas Ferguson of Savills estate agents.

It also cast a vote against David Bernstein, the chairman of Ted Baker, which has been dealing with allegations of misconduct by its former chief executive. Ray Kelvin has been accused of acting inappropriately towards staff, with behaviour including “forced hugs” and ear kissing. He resigned last month but denies the allegations.

LGIM will expand its efforts to influence board diversity further next year, when it starts to hold firms listed on the American S&P 500 to the same standards as UK companies.

Helena Morrissey, LGIM’s head of personal investing and the founder of the gender diversity campaign group the 30% Club, said: “Frankly, it’s disappointing that we continue to have to make our voices heard as investors by voting against so many chairs on diversity issues but we are not going to go away.

“LGIM will continue to be active on this issue until we see boards protecting companies from ‘groupthink’ by becoming more diverse.”

LGIM, which released its annual corporate governance report on Tuesday, also revealed that it pulled millions of pounds from eight companies and voted against their chairmen for breaching its climate policies last year.

The asset manager divested from a string of companies originally included in its Future Worlds Funds, which are covered by LGIM’s climate change pledge. They were excluded for issues including poor governance and climates disclosures, as well as lobbying politicians on policies that risk accelerating climate change.

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Where those companies were held in other LGIM portfolios, the asset manager voted against their chairmen at their respective annual general meetings.

Those companies included the car giant Subaru, the Canadian food retailer Loblaws, the Russian oil giant Rosneft and the American energy provider Dominion Energy.

LGIM’s corporate governance director, Sacha Sadan, said that all of those businesses had tried to redeem themselves. “Some flew over and sent delegations to LGIM to meet us, not to argue with us in terms of our analysis but [to ask], ‘How can we get back into your funds and what things do we need to do?’” Sadan said.

Their potential inclusion in will be reassessed in June.