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LAPFF acts on Diversity

25th Feb 2014 | FTSE laggards may face AGM votes as Forum backs LGIM

The Boards of FTSE companies are facing further pressure for reform after the Local Authorities Pension Fund Forum (LAPFF) announced it will take board diversity into account in any AGM voting recommendations it may make to member funds during the upcoming AGM season. The Forum will directly raise concerns where there is insufficient indication that the company has taken board diversity into consideration.


‘In 2014, LAPFF will review FTSE 100 company disclosure, and based on individual company circumstances will consider recommending that its members vote against the election of the Chairman of the Nomination Committee if there are no women on the board. Where there are less than 25% of women on the board, the Forum will consider recommending that members abstain on the election of the Chairman of the Nomination Committee.’ Forum Chair Councillor Keiran Quinn said.


LAPFF has also endorsed the October 2013 decision by high profile UK fund manager Legal & General Investment Management (LGIM) who have announced that from 2015 it would vote against the chairman or the chairman of the nominations committee if they have not installed any women on the board, or if aspirational targets have not been set, or if disclosure about gender balance is inadequate.


February 2013 analysis undertaken by PIRC reveals that to reach the 25% Davies target for the start of 2015 boards must double the 2013 rate of increase of female representation to around 5.8% and make over 4 new appointments each month till January 2015. The Professional Boards ForumBoardWatch’ calculates 51 more female directors are needed to meet the Davies target.


Attention is also being focussed on female representation on executive committees. The Dec 2013 Cracking the Code Report Research prepared for the 30% Club of which LAPFF is a member found that a man who starts his career with a FTSE 100 company is four and-a-half times more likely to reach the executive committee than his female counterpart. Progress is also slow in the FTSE 250 according to the latest study by the Cranfield University School of Management. the Women on Boards report issued in November 2013. They also found the proportion of women on executive committees had fallen from 17.2% in 2010 to 15.3% in 2013.


The forum coordinates corporate governance and engagement activities for public authority funds holding over £120b in FUM

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