Members of the 30% Club UK Investor Group are considering voting against the reappointment of board members at companies that do not address inequity and discrimination.
In a statement published today, the group recognised institutional prejudice and its worldwide consequences, especially for racial and ethnic minorities. According to the statement, boards that embrace gender and cognitive diversity, as well as a variety of skills and experience, are more likely to offer better investor results.
The group is a business initiative aimed at increasing the number of women on corporate boards and in senior positions around the world. It has more than 1,000 board chairs and CEOs from more than 20 countries that have signed on to ensure that at least 30% of its boards are made up of women.
The group manages over £11 trillion in assets and has written to FTSE 100 businesses that have yet to meet the Parker Review’s requirements. The group says it is committed to working with board chairs, nominating committees and executive teams to address racial imbalance in leadership and the workforce.
The announcement comes after the 30% Club’s UK introduced race and ethnicity criteria in July 2020. It says that by the end of 2023 members of the group throughout the FTSE 350 will have at least one person of colour on their board of directors and executive committee. It expects that at least half of those appointments will go to women of colour, as one of the issues the 30% Club campaign focuses on is gender.
30% Club UK Investor Group co-chair Diandra Soobiah says: “Diversity and inclusion in companies are integral to sound corporate governance and corporate culture. As long-term investors, we see the failure to take diversity seriously as a stark warning about the long-term sustainability of the company.
“Time is up for organisations that seek to simply tick boxes. The 30% Club Investor Group is putting FTSE companies on notice – the laggards need to do much better, and we’re willing to help.
“We all have an important role to play to ensure persistent race inequities in business and our society are addressed. As investors, we can have stronger dialogue with the companies we invest in, with a view to improving diversity and inclusion within companies in the UK.”
30% Club UK Investor Group global chair Ann Cairns says: “The 30% Club’s UK Investor Group issuing this statement is a significant moment for the UK investor community. With ESG rightfully gaining prominence in the board rooms and executive offices of the world’s biggest companies, addressing racism is imperative for all asset managers.
“It could make a major contribution to delivering the change businesses, economies and societies so desperately need to see. I am tremendously grateful for the hard work done by the co-chairs and members of the 30% Club UK Investor Group to take a stand on racial inequality.”