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L&G launches 'Girl fund' targeting gender diversity

The index fund will invest in companies that ensure female representation on boards and in the workforce.

 
L&G launches 'Girl fund' targeting gender diversity
 

Legal & General Investment Management (LGIM) has launched the first fund with the specific aim of investing in the success of women with a portfolio of gender-diverse companies.

The L&G Future World Gender in Leadership UK Index fund, or GIRL fund, is aiming to raise gender diversity standards across the UK stock market by allocating a greater weight to companies that have higher levels of women in top positions.

It will score and rank FTSE 100 and FTSE 250 companies based on four gender diversity measures: women on the board of directors, women executives, women in management, and women in the workforce.

In order to qualify for the index the fund will track, companies will have to reach a minimum of 30% representation in the measures based on LGIM’s own research.

The most represented sectors in the index are finance, consumer non-durables, as well as consumer services and energy.

Gender diversity within the workplace has been hotly debated as the government now mandates companies with over 250 employees to report their gender pay data data, and LGIM said it would consider incorporating this information in its measures.

Helena Morrissey (pictured), head of personal investing at LGIM and founder of the 30% Club that is pressing for one in three board position in the UK to be occupied by women, said gender inequality was ‘one of the key issues of our time’ and a ‘frustrating’ one.

‘Rather than feeling trapped or despondent, let’s do something about it,’ she said. ‘When we invest in the success of women, we are investing in the success of business. Collectively, we can help achieve gender equality and improve gender diversity in the UK.’

The first round of gender pay data showed a median pay gap of 9.7%, with 78% of businesses paying men more than women, while 14% pay women more, and 8% have no gender pay gap.

A published list of LGIM’s gender diversity scores shows a huge disparity among the UK’s biggest companies. The scores given to companies are out of 100, with 100 the most diverse and zero the least. There is only one company that achieved a 100 gender-diversity score, The Renewables Infrastructure Group (TRIG ), an investment trust running a portfolio of renewable energy assets. The chairman of the trust is Helen Mahy and Shelagh Mason also sits on the board of directors.

Just one company scored zero: engineering group Melrose (MRO), which has had its £8 billion takeover of GKN cleared by the government.

Company Gender Diversity Score
The Renewables Infrastructure Group (TRIG ) 100
Ascential (ASCL) 93
Merlin Entertainments (MERL) 93
N Brown (BWNG) 91
Marks & Spencer (MKS) 85
   
Melrose (MRO) 0
Stobart Group (STOB) 5
Just Group (JUST) 8
Fresnillo (FRES) 8
Hochschild Mining (HOCM) 8

Clare Payn, LGIM head of corporate governance in North America, said the company had been pushing for gender diversity by voting against all-male boards since 2015.

‘We see this as a business issue,’ she said. ‘Tapping into the most diverse talent pool is vital in a competitive and changing market for companies to remain relevant.’

She said all-male boards from the same socio-economic backgrounds ‘cannot be the best forum for challenging debate’.

6 comments so far. Why not have your say?

Mystery Woman

May 18, 2018 at 14:11

Interesting to see that the gender issue is moving into the fund league. Will be interested to see its effect and who buys.

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chazza

May 18, 2018 at 14:46

Surely the most important criteria for board appointments should be integrity and competence. There is abundant evidence that many male directors are incompetent and / or downright crooked, but I'm not aware of evidence that women are better in either respect. Of course, in these post-expert, post-evidence times, it will doubtless be prejudice and whim that wins the day.

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King Lodos

May 18, 2018 at 19:35

More equal gender representation in teams and management does tend to be a positive predictor .. But that's more likely because these companies are doing a good job of being merit-based, and fair representation is what you should expect.

When it shifts to engineering an outcome – e.g. gender/diversity quotas, or funds like this – that's never been shown to work, and seems to be creating problems for companies who've embraced it .. like Google.

It's ruining the US education system, and it spreads like wildfire .. Red flag on L&G if they're 'drinking the kool-aid' as Americans say

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Alrj

May 19, 2018 at 11:22

Competence not gender should always be the key factor. But for those who wish to discriminate on gender grounds here you go. Sign of the times.

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Stephen B.

May 19, 2018 at 11:56

In most cases female directors are non-execs - they may be competent but essentially it's just box-ticking and makes little difference. Where there are female execs it's usually HR or finance. I suspect we'll continue to see few female directors of operating divisions because there are few qualified women at senior management level and it will be very hard to change that.

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Tom Mozy

May 21, 2018 at 11:39

What a load of rubbish.

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