Lloyds Banking Group, Foxtons and Paddy Power are among almost 100 firms that will be highlighted this year by an influential investor group for failing to boost the number of women on their boards. It will do so by stamping their annual reports with the highest warning label. The list is expected to grow as the AGM season rumbles on. The move comes as boards have also been targeted by unions and shareholder action groups for excessive executive pay.
The GMB union has urged shareholders to block a 44% pay rise for Iain Conn, the boss of Centrica, which owns of British Gas, at the firm’s AGM on Monday. Although IVIS does not issue recommendations in the same way shareholder advisory services such as Glass Lewis and ISS, a lack of board diversity has been noted against the election of each company’s nomination committee chairs. A further 74 firms have been issued with an “amber top” warning if women account for less than 25% of the board. “Evidence clearly shows that more diverse boardrooms make better decisions.
Investors want to see greater diversity in the companies they invest in to ensure our savers and investors are getting the best returns possible,” he said. “Companies need to set out how they are going to improve their gender diversity or face revolts from investors who want to see a more diverse group of people around the boardroom table,” he added. Some companies say they’re making efforts to address the issue. Centrica has three women on its board but will lose one when the head of its audit committee steps down after an eight-year stint in the role.
The chair, Charles Berry, is expected to tell shareholders at the AGM that the drop in diversity shouldn’t be taken as a sign that the issue has “become less important” to the board. He will stress that diversity will be at front of mind for the team.
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