The Church of England's investment arm has written to a number of FTSE 350 companies demanding that they increase diversity on their management boards. The Church Investors Group (CIG) has said it will use its votes at company AGMs to push large companies to improve both their ethnic diversity and gender diversity at board level.
In a memo, the CIG said it has revised its voting policy and will no longer support the re-election of committee chairs of FTSE 100 companies "where there is no ethnic minority representation on the board".
"Members will also vote against the nomination committee chair at FTSE 350 companies where less than 40% of the board is female," it added, before noting that members will also consider voting against the entire nomination committee "where women make up less than 30% of FTSE 100 board and less than 20% of FTSE 250 boards".
The CIG has previously used its votes to hold companies to high standards on executive pay, environmental concerns, and tax justice. On the issue of environment, the group said it has previously withheld support for director elections "where companies have been identified as laggards in addressing climate change".
The Revd Canon Edward Carter, chair of the Church Investors Group, commenting on the 2021 voting template said:
“Church investors have led the way in using their votes at company AGMs to support increased board level gender diversity. Now is time to raise the bar even further and challenge companies to appoint boards which are truly reflective of the society in which we live, simply being satisfied that 30% of the board is female is no longer good enough”. He added “it’s important to recognise that broader gender diversity at all levels of a company is critical to its success.
"We will continue to push companies to increase both executive committee and director reporter gender diversity as this is where the boards of tomorrow will be drawn from”
Christophe Borysiewicz, head of investment management at the central finance board of the Methodist Church and Epworth Investment Management said:
“For too long boards have been unrepresentative of society; our voting policies have long been a part of our holding boards to account. The changes this year allow us to enhance this further as we expect all boards to have appropriate levels of BAME and female representation.”
Bess Joffe, head of responsible investment at the Church Commissioners for England said:
“Ethnic diversity has not been a priority in any real way for companies. They have to play their part in improving the lives of people who have been disenfranchised and left behind and who are going to suffer disproportionately as a result of Covid."