“We need greater diversity in our boardrooms, better training for directors, and more measures to enhance the executive pipeline, ensuring that talented people within an organisation are encouraged and supported at an early stage of their careers, and beyond, into middle and senior management."
​Iain Wright, Chair, BEIS Select Committee (April 2017)

“[The Committee is right that] improving diversity on boards and senior leadership roles is a key business issue. It improves decision making and brings a wider range of experiences to the table. Business-led initiatives to increase gender diversity on boards have made a real difference since 2010, though there is still much to do. Companies recognise that they must extend their focus to improve gender diversity in management positions, but also ethnic diversity at senior levels. In the short term, improving voluntary transparency and reporting on these two areas – with clear targets set by businesses themselves - should be our first priority. At this time, legal options are not likely to be the best tool to achieve good progress.”
Carolyn Fairbairn, Director-General at the CBI (April 2017)

”Too often the people who are supposed to hold big business accountable are drawn from the same, narrow social and professional circles as the executive team. And too often the scrutiny they provide is not good enough. A change has got to come.”
Prime Minister Theresa May, Conservative Party Conference (October 2016)  

"Diverse Boards…not only encourage better leadership but also contribute to better all-round performance, engagement and innovation, and ultimately increased corporate performance for both the company and its shareholders."
Sir Winfried Bischoff, Chairman, Financial Reporting Council (April 2015)

The 30% Club Investor Group was established in 2011. Its purpose is to:

• co-ordinate the investment community’s approach to diversity, in particular to explain the investment case for more diverse boards and senior management teams;
• exercise our ownership rights,  including voting and engagement, to effect change on company boards and within senior management teams;
• encourage all investors to engage on the issue of diversity with chairs of boards and senior management teams.  

As asset owners and asset managers we are responsible for the stewardship of the investments we make on behalf of our members and clients. Part of that responsibility includes the assessment of the boards and senior management teams of our investee companies.

We believe boards that genuinely embrace cognitive diversity, as manifested through appropriate gender representation and a broad spectrum of skills and experience, are more likely to achieve better outcomes for investors. There is increasing research to support this hypothesis. 

A growing body of empirical evidence corroborates the intuitive argument that more diverse boards are more effective than ‘identikit’ boards in delivering better decision-making.
The following 8 studies, based on different geographies and with a specific focus on gender diversity, support the intuitive view that diversity at board and management levels improves financial performance:

• Petersen Institute: Is Gender Diversity Profitable? Evidence from a Global Survey, February 2016
• MSCI Women On Boards: Global Trends in Gender Diversity on Corporate Boards, November 2015
• Grant Thornton The Value of Diversity, September 2015

• Credit Suisse The CS Gender 3000: Women in Senior Management, September 2014

• Credit Suisse Gender Diversity and Corporate Performance, August 2012
• McKinsey ‘Women Matter’ Series, 2011-2014

• Citigroup ASX100 Women on Board Analysis, August 2011

• Catalyst ‘The Bottom Line: Corporate Performance and Women’s Representation on Boards’, 2007

There are many consequences of a lack of diversity for board effectiveness, including a lack of appropriate representation and understanding of a company’s customers, workforce and geographic footprint, all key to successful delivery of long-term strategy. Importantly, increased diversity on the board is likely to reduce the potential for entrenchment and groupthink, and will further widen the potential talent pool for appointments. 

Statement of Intent
In October 2016, we published a Statement of Intent to signal the collective voice of the 30% Club Investor Group to companies and the wider marketplace, and to demonstrate the ways in which members will use their ownership rights and undertake stewardship to encourage progress on gender diversity. The Statement of Intent includes supporting the following achievements by 2020:

• 30% women on FTSE350 boards and 30% women at senior management level in FTSE100 companies
• one third of FTSE350 board positions to be held by women

We call on companies to take fast and considered action to secure this ambition.

We support the brief of the Hampton-Alexander Review (following on from the review by Lord Davies on women on boards of UK listed companies) to focus on “improving female representation in leadership positions of British business, broadening the ambition to the entire FTSE 350 and raising the target to 33% of women on boards by 2020.” 

Commitments, as set out in the Statement of Intent, include:

• Engagement with investee companies
  We will actively engage with board chairs and nomination committees on the issue of board diversity to convey the high level of importance that we, and our clients and members, place on this core stewardship issue.
  We will raise questions where there is evidence that there has been a failure in the nomination process with respect to board diversity.
  We may choose to vote against the re-election of the chair of the board or nomination committee, particularly where there continues to be no evidence of board diversity, and engagement with the board has not led to any satisfactory outcome.

• Exercise of Ownership Rights
  As a general approach, this could involve voting actions in listed companies in two areas:
  
  Directors (re)elections – Board Chair and/or Nominations Committee Chair
  The nominations committee should ensure that the board has the appropriate range and balance of skills, experience, independence and knowledge.
  The chair of this committee shares a responsibility with the board chairman for ensuring that directors are appointed on merit, against objective criteria and with due regard for the benefits of diversity.
  Investors could consider not supporting the nominations committee chair and/or board chair of those companies that still fall short of expectations.
  
  Report & Accounts
  Companies should include disclosure on their diversity policy and implementation (or make reference to disclosure elsewhere) in the Report & Accounts.
  Investors could consider not supporting the Report & Accounts resolutions if the diversity statement is not considered satisfactory (for example, if a statement does not include specific reference to a stated policy and/or actions regarding increasing diversity throughout an organisation) or there is no clear evidence that diversity is being sufficiently considered by the board.
  Whilst our initial focus will be on FTSE350 companies, we will be encouraging similar disclosure from FTSE Smallcap companies. We would also encourage any company considering a listing to introduce a diversity policy along similar lines.
   
• Exemplars of Best Practice
  In addition to putting pressure on companies to perform better on diversity, the 30% Club Investor Group is keen to applaud leading companies and commend them for achieving strong levels of gender diversity on their boards and in their senior management teams.
  In August 2016, in a letter to the Financial Times, we commended the progress of Halfords Group plc, which has a female CEO and an equal balance of men and women on its board.

For examples of best practice disclosure, please see Hampton-Alexander Review - FTSE Women Leaders: Improving gender balance in FTSE Leadership (November 2016).

For a copy of the 30% Club Investor Group's Statement of Intent please click here.
For a copy of the 30% Club Investor Group's Toolkit for Engaging Boards on Diversity please click here

AUSTRALIAN INVESTOR GROUP
Aberdeen Asset Management, AMP Capital, Australian Ethical Investment, Blackrock Investment Management (Australia), CareSuper, Cbus, Colonial First State Global Asset Management, Commonwealth Superannuation Corporation (CSC), First Super , HESTA, Hostplus, IFM Investors, Principal Global Investors (Australia), State Street Global Advisors (SSGA), VicSuper

CANADIAN INVESTOR GROUP
AGF Management Ltd., Alberta Investment Management Corporation (AIMCo), British Columbia Investment Management Corporation (bcIMC), Caisse de Dépôt et Placement du Québec, Canada Post Corporation, Canada Pension Plan Investment Board (CPPIB), Colleges of Applied Arts & Technology Pension Plan, Halifax Regional Municipality Pension Plan, Healthcare of Ontario Pension Plan (HOOPP), Mouvement Desjardins, Ontario Municipal Employees Retirement System (OMERS), Ontario Public Service Employees Union (OPSEU) Pension Investments, Ontario Teachers’ Pension Plan (OTPP), Public Sector Pension (PSP) Investment Board, Sionna Investment Managers.

UK INVESTOR GROUP
Aberdeen Standard Investments, Aviva Investors, Baring Foundation, Barrow Cadbury Trust, Church Investors Group, EdenTree Investment Management, Environment Agency Pension Fund, Government Pension Investment Fund (GPIF), Hermes Investment Management, Jupiter Asset Management, Legal & General Investment Management, Liontrust Investment Ltd, Local Authority Pension Fund Forum, Local Pensions Partnership, NEST, Newton Investment Management, Old Mutual Global Investors,  Royal London Asset Management (CIS) Limited, RPMI Railpen Investments and Sumitomo Mitsui Trust Bank.