AXA Investment Managers will introduce one of the sectors toughest policies on gender diversity in 2021, in a bid to force businesses around the world to appoint more women to board roles.
When it comes to the representation of women on UK boards, the proportion has slowly risen – growing to 32% by the end of March 2020, from less than 7% two decades ago – but 89.5% of the roles are non-executive positions, according to The DiversityQ FTSE 100 Board Diversity Report 2020.
AXA IM said that next year it will target companies in developed markets by using its vote at annual meetings where women do not account for at least a third of board members. This new 33% diversity target will enable AXA IM to hold all companies in which it invests to the same high standards of achieving greater diversity, as well as advancing the issue of gender diversity in the developed world.
AXA IM will also vote against the head of the nomination committee or against the signing off of company accounts in emerging markets as well as Japan, where women do not hold at least one seat or make up at least 10% of larger boards.
AXA IM will continue to push companies to disclose their gender diversity policy and hold to account those that fall short of stated targets or industry best practice.
Yo Takatsuki, Head of ESG Research and Active Ownership at AXA Investment Managers, said: “Studies show that a well-balanced and gender-diverse Board of Directors leads to higher profitability and value creation, overcomes issues of groupthink, triggers debates and innovation and leads to stronger diversity of representation across the organisation. These changes are in line with our belief that we must hold Boards of Directors accountable to best governance standards in their role as guardians of sustainable performance.
“The introduction of our 33% target for listed companies in the developed world and new policy for companies in emerging markets and Japan, is the next critical step for us as we continue to build on our voting policies around gender diversity, and make the most of our rights as an investor to engage companies in productive dialogue that makes a tangible difference.”
AXA IM’s gender diversity engagement in 2019 focused on pressing companies to proactively seek gender equality at every level of the corporate hierarchy. AXA IM also improved how it incorporated gender diversity considerations into its voting at AGMs, by voting against the following:
• Approval of the company’s report and accounts or a relevant director for all-male boards at companies in developed markets;
• The chairman of the nomination committee at companies in the UK FTSE All Share Index where less than a quarter of the board is female;
• The chairman of the nomination committee or relevant director at US companies with lower than 20% female board representation.
This saw an increase in the number of votes against companies where AXA IM had voted against companies on gender diversity considerations, from 45 companies in 2018 to 245 companies in 2019. AXA IM voted against 230 resolutions at 186 meetings based on gender diversity issues between January and May 2020.
Yo Takatsuki, added: “As long-term stewards of our clients’ investments, we believe that the interests of shareholders are best served where the Board of Directors is structured in a manner to ensure that there is an appropriate diversity of skills, knowledge and experience amongst the directors on the board which is suitable for the requirements of the business.”
AXA IM’s voting on gender issues:
|2018||2019||2020 2020 Year-to-date|
|Number of companies targeted for diversity concerns||58||272||186|
|Total votes against based on diversity issue||45||245||230|
|Report and accounts||13||49||77|