The UK Church Investors Group (CIG), which has £17 bn ($24 bn) in assets under management and whose 61 members include the Church of England, has said it will vote against the chair of the board nomination committee at companies where women account for less than a third of board members – and is expecting to do so in 2018.
The CIG will also vote against all directors on the nomination committee if the company has less than 25 percent female board directors. More than a quarter of FTSE 100 companies fall into that category.
The decision was made by the group as part of a regular review looking at ESG issues. One of the architects of the approach is Adam Matthews, head of engagement at the Church Commissioners, one of the largest members of the CIG with £8 bn in assets under management.
‘On diversity, we are keen to support the 30% Club [the body that campaigns for greater female representation on FTSE 100 boards]. We are members of it, and we feel it is something that could be translated into our voting,’ he tells IR Magazine.
Matthews explains the CIG’s approach: ‘We agree the template and the voting priorities. We then proactively write to all the companies – which we did at the end of last year – highlighting the priorities and indicating how we will vote. We are willing to engage with those companies that respond.
‘We sometimes exercise discretion where a company proactively contacts us and says, We may have fallen below the threshold, we acknowledge that and we need to improve. In those cases, we will give the benefit of doubt to companies – so it is not a total blunt instrument that is applied unthinkingly. We do look at the particular company circumstances.
‘But our expectation is that this year we will be voting against a large number of nomination committee chairs because we don’t feel yet that this issue has been properly addressed. We hope that changes quite rapidly in the years to come.’
Some industry observers have questioned the CIG’s lecturing of listed companies on ESG matters, arguing that the Church of England has not embraced female representation in any meaningful way.
Matthews challenges that argument. ‘If you look at the top clerical appointments – the Archbishops of York, Canterbury and London – the Bishop of London is a woman,’ he points out. ‘If you look at the Church Commissioners, the head is Loretta Minghella, while a third of the members of the assets committee – the main body that makes decisions for investments for the Church of England Commissioners – are women.
‘If you look at the General Synod, which is the parliament of the church, a third of that body is female. And if you look at the new clergy coming into the Church of England, more than half are women.’
Separately, 27 global investors with £10.5 tn in assets under management have, as of earlier this month, signed up to a program designed to promote more women to senior management and to the boards of UK companies in which they invest.