The 30% Club, the global campaign to increase gender diversity at the board and senior management level at the world’s biggest companies, has expanded its reach to address the lack of racial and ethnic diversity in UK businesses.
The body has issued a statement of intent, signed by over 40 investment companies representing £11.7trn in AUM including Aviva Investors, Robeco, Royal London, Liontrust, Fidelity, M&G, Jupiter, Federated Hermes, EdenTree and Legal & General, calling on companies for more transparency with racial diversity data on a par with gender diversity, as well as detailed plans on out to increase racial diversity in the workforce.
It said the signatories support delivery of the following UK 30% Club 2023 targets:
1. Beyond 30% representation of women on all FTSE 350 boards, to include at least one person of colour. Members of the 30% Club UK Investor Group have pledged their support the Parker Review goals for at least one person of colour on every FTSE 350 board – in addition, they advocate for gender balance with half these seats going to women, creating 175 board seats for women of colour.
2. Beyond 30% representation of women on all FTSE 350 executive committees, to include one person of colour They advocate for gender balance with half these seats going to women, creating 175 executive committee roles for women of colour
3. Beyond 30% of all new FTSE 350 chair appointments to go to women between 2020 and 2023.
The statement said: “We all have a role to play to ensure that the persistent race inequities in business and our society are addressed. As institutional investors, we can contribute to addressing these inequities by taking concrete steps to promote diversity and inclusion across our portfolios and within our organisations.
“As such, we the undersigned encourage UK public companies to advance diversity and inclusion efforts and enhance transparency and accountability.”
It continued: “Boards that genuinely embrace cognitive diversity, as manifested through appropriate gender and racial 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.”
With ESG rightfully gaining prominence in the board rooms and executive offices of the world’s biggest companies, addressing racial inequity is imperative for all asset managers.
Ann Cairns, global chair of the 30% Club
The 30% Club UK Investor Group is committed to actively engaging with UK company board chairs, nomination committees and executive teams on the issue of racial inequality in their leadership ranks and workforce, it said, as it warned that investors may consider voting against company “laggards” at AGMs if they fail to take action.
The 30% Club is also running a race equity training programme for its members to ensure that investors have the right tools and support to take action with the companies they invest in.
Diandra Soobiah, co-chair of the 30% Club UK Investor Group, said failure to take diversity seriously is 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.”
Meanwhile, Ann Cairns, global chair of the 30% Club, described the statement of intent as “a significant moment for the UK investor community”.
She explained: “With ESG rightfully gaining prominence in the board rooms and executive offices of the world’s biggest companies, addressing racial inequity 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.”
