Liontrust engagement and voting report 2021 - Flipbook - Page 26
Social
Gender Diversity
Liontrust considers gender diversity at board, executive and
company levels to be essential to the effective operation of a
company. We have joined discussions led by the 30% Club and
have encouraged investee companies to disclose internal data
on workforce diversity and pay through the Workforce Disclosure
Initiative (WDI), of which we are a signatory.
Our custom voting policy demonstrates Liontrust’s commitment to
driving positive change based on the findings of the HamptonAlexander Review. The Review has quantified a target threshold
of 33% female board composition for FTSE 350 companies. This
figure is mirrored by Liontrust’s FTSE 350 and ISEQ20 custom
voting policy, which dictates that we will vote against Chairs of
Nominations Committees whose boards do not meet this minimum
threshold of gender diversity. Our proxy adviser, ISS, and global
governance solutions provider, Glass Lewis, have also aligned their
FTSE 350 board diversity policies with the Hampton-Alexander
Review’s target.
Our US and Canada policy is broadly aligned, warranting a
vote against the Chair of the Nomination Committee when there
are fewer than 30% of women on the board. Our European and
Global voting policies seek to comply with best practice corporate
governance for local markets. For example, French companies in
which we are invested must reach a 40% minimum threshold on
gender balance.
In 2021, Liontrust voted against, to abstain or to withhold on 97
director election proposals at 92 company meetings when at least
a part of the rationale for the vote instruction was due to a lack
of gender diversity on the board of the investee company. There
were 775 meetings in which Liontrust voted on items that could
be classified as director elections. Liontrust voted against or chose
to abstain in 382 of these meetings. Nearly 1 in 4 (24.08%) of
the meetings in which Liontrust chose to vote against or abstain/
withhold on a director election were due to a lack of gender
diversity. Furthermore, of these vote instructions, 89 proposals,
or 91.8%, were contrary to ISS voting policy recommendations.
Similar to proposals relating to the environment, resolutions
specifically pertaining to reporting on gender diversity have mainly
been filed by shareholders.
Summary of shareholder-filed resolutions
Liontrust voted in favour of:
• Adoption of policy to annually disclose EEO-1 Data at Dupont
de Nemours
• Report on Gender/Racial Pay Gap at Amazon
• Report on Gender/Racial Pay Gap at Microsoft
• Report on Board Diversity at Badger Meter
• Oversee and Report on a Civil Rights, Equity, Diversity and
Inclusion Audit at Amazon
Liontrust voted against:
• Report on Pay Disparity at TJX Companies
Overview of Liontrust’s Sustainable Investment team: Corporate
Diversity
In line with its 2021 initiative to increase corporate diversity,
Liontrust’s Sustainable Investment team made the following progress
by using voting as a tool to influence positive change.
In 2021, the team increased its voting threshold from 30% to 33% female
boards but, despite this, continued to see good progress on increased
representation. It voted against the Chair of the Nomination Committee
due to a lack of gender diversity on the boards of 10 companies and
withheld support on re-election for a further six. This means it voted against
or withheld support in 11% of a total of 147 votable meetings due to a
lack of gender diversity. The team voted against the same resolution due
to a lack of ethnic diversity on the boards of five companies over the year.
Overall, the team has now targeted 40 companies lacking board
gender diversity from 2016 to 2021. Of these:
• 35 companies (88%) have made progress
– 23 (58%) improved and now have over 33% female
representation – this group had an average of 21% women on
the board when the team first began targeting them, increasing
to an average of 39% by 2021
– 12 (30%) improved but still have under 33% female
representation – this group had an average of 18% women on
the board when the team began targeting them, increasing to
an average of 28% by 2021
• Four companies (10%) did not improve
• One company (3%) deteriorated over this time
Board gender diversity
Number of companies
Average % of women on board
(before we introduced our
Average % of women on board
voting policy)
(after 2021 AGM)
Improved and now have over
33% female representation
23 (58%)
21%
39%
Improved but still under 33%
female representation on Board
12 (30%)
18%
28%
Did not improve
4 (10%)
22%
22%
Deterioration
1 (3%)
27%
25%
The team was finally able to support the re-election of the Chair of the Nomination Committee at the AGMs of several companies in 2021,
having previously withheld support due to a lack of board gender diversity. Adobe, Intuit, JLEN Environmental Assets Group and London
Stock Exchange Group were all able to meet the higher threshold of 33%.
26 - Liontrust: Engagement and Voting Report 2021