International Women’s Day: Breaking the bias

Helene Winch

Head of Responsible Investing

Introduction

As Premier Miton’s Head of Responsible Investing, my experience is in sustainable and responsible investing. However, as we celebrate International Women’s Day (IWD), I see the two themes as very much interlinked. In both areas we can celebrate the achievements to date, yet there is still much more we can all do.

This year’s theme for IWD is #BreaktheBias; including creating a world that is diverse, equitable, and inclusive. At Premier Miton, we are celebrating the small role we have played in improving diversity in three key areas: investment decisions, engagement and our governance.

Investment decisions

In a recent report published by the Department for Business, Energy & Industrial Strategy (BEIS), a Business Minister noted that “evidence shows that more diverse businesses are more successful businesses and the case is too strong to ignore”. Research has found that having diversity at the top can improve companies’ profitability, a point that the financial industry is keen to embrace, and companies are already looking to improve diversity in their boardrooms.

As an investor, one of the metrics we look for in companies is female representation in the boardroom and there is some progress. For example, recently we have seen the number of companies that we hold in the Premier Miton Responsible UK Equity Fund that have female leaders increase. We applaud companies with more diversity as:

  • Diverse boards can provide better oversight of the business.
  • Diverse executive committees are less prone to group think and, given that on average

50% of customers are female, they are better able to ensure that any business can equally appeal to all customers.

  • More diversity can promote a better work culture and improve performance.

We particularly like investing in companies with female chairs, chief executive officers or chief financial officers due to the diversity of thought in decision making that this can bring.

Engagement

Engagement is one of the important tools at our disposal to encourage a shift in the way companies think and behave, in particular when encouraging better diversity at C-suite level. Premier Miton wrote to nineteen companies held in the Premier Miton European Sustainable Leaders Fund on the subject of diversity in the executive committee and on the need to do more than simply placing one female non-executive on the board.

In discussions with portfolio companies, management are receptive and understand the need for change, however companies find the complexity of doing this a challenge as they do not see it as an easy or quick fix. Feedback from companies is that credible change involves work on diversity across the entire firm, from graduate recruitment to maternity leave, to returning to work from maternity through to executive representation.

We want to invest in companies that have balanced boards and strong diversity and inclusion values throughout their businesses. However, we are also aware that these changes will take time. As long term investors, our intention is to work with our companies along their diversity and inclusion journey.

International Women’s Day is an opportunity to put the #BreakTheBias agenda firmly to the forefront, to create a gender equal world that is diverse, equitable and inclusive.

An example of the power of diversity comes from a report from BoardReady that looked at companies from the high carbon sectors and found that more diverse boards act with greater speed and substance to combat climate change.

The report found that companies with more gender diverse boards are:

  • Performing significantly better in 8 out of 9 climate action indicators.
  • Twice as likely to develop a decarbonisation strategy.
  • 25% more likely to have medium and long-term greenhouse gas emissions reduction targets.
  • Significantly more likely to allocate future capital aligned to these targets.


The discussions we have had on gender diversity with our investee companies have been infinitely more insightful than the evaluation of ESG data points, such as the percentage of women on boards.

Larger companies are fully aware of the diversity issue, and their legal obligations, and will improve their gender diversity as they refresh their boards. In addition, those that are acting and engaging on the topic can expect to see long term support from us as investors. Where we see companies resisting changes to their all male boards, they should expect votes against proposals including chair reappointments at annual meetings.

Our board

My final point is a more reflective point; the Premier Miton Group plc eight person board includes three female, non-executive directors who introduce diversity of thought and all the benefits that this brings. Additionally, one of our female directors has experience from outside the fund management industry which we believe will bring even greater diversity of skills, views and experience.

Summary

In conclusion, the facts and reports are in agreement and cannot be ignored; diversity within the boardroom and across all parts of business are vital for the future success and strength of a business and its workforce. By tackling the challenges and barriers to diversity and inclusion in our work environment, we inevitably champion the calls for equality on International Women’s Day and greater gender diversity within our investee companies .

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IMPORTANT INFORMATION:

IMPORTANT INFORMATION:

For information purposes only. It expresses the opinion of the author and does not constitute advice.

Whilst every effort has been made to ensure the accuracy of the information contained within this document, we regret that we cannot accept responsibility for any omissions or errors. The information given and opinions expressed are subject to change and should not be interpreted as investment advice.

For your protection, calls may be monitored and recorded for training and quality assurance purposes.

Issued by Premier Miton Investors. Premier Portfolio Managers Limited is registered in England no. 01235867. Premier Fund Managers Limited is registered in England no. 02274227.  Both companies are authorised and regulated by the Financial Conduct Authority and are members of the ‘Premier Miton Investors’ marketing group and subsidiaries of Premier Miton Group plc (registered in England no. 06306664). Registered office: Eastgate Court, High Street, Guildford, Surrey GU1 3DE.

005926/080322

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This section of the website and the content it contains is for retail clients only and by persons who are resident in the United Kingdom [who are not US persons]. Professional advisers should refer to the Professional Advisers site.

The content of the pages of this website is for your general information only. It, and the products and services described within it, are subject to change without notice. We shall not be liable to you, or any third party, for any amendment, modification, suspension or discontinuance of any product or service described on our website. Neither we, nor any third parties, provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or appropriateness of the information and materials made available on this website.

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The information contained on this website does not constitute an offer or solicitation to sell or purchase shares in the funds or portfolios or to provide you with other products or services. Any application or investment must only be made on the basis of the relevant documentation of the investment, such as, for example, terms and conditions. The information on this website does not constitute any investment, tax, legal or other advice. Persons who do not have professional experience in matters relating to investments should always consult with an independent financial adviser before making an investment decision. Any opinion expressed on individual funds, services or products represent the views of the individual at the time of preparation and should not be interpreted as a personal recommendation to buy or sell or otherwise trade all or any of the investments that may be referred to.

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The content of the pages of this website is for your general information and use only. It, and the products and services described within it, are subject to change without notice. We shall not be liable to you, or any third party, for any amendment, modification, suspension or discontinuance of any product or service described on our website. Neither we, nor any third parties, provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness or appropriateness of the information and materials made available on this website.

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