Dame Helena Morrissey, head of personal investing at Legal & General and its fund management arm have launched the first UK fund to invest in companies entirely based on how well they do in gender diversity.
At a launch event held on 17 May, Morrissey said:
Gender inequality has been a key issue of our time creating despondency, debate, frustration and headlines but we want to do something about it.
The GIRL fund will invest in the women of our future. It will send a message to companies that if they are investing in the success of women, they are investing in the success of their businesses.”
The GIRL fund is open to individuals, stockbrokers and institutional investors and takes stakes in the top 350 UK listed companies based on how they score on four gender diversity measures:
- Women on the board of directors
- Women executives
- Women in management
- Women in the workforce
They are ranked between -1, the worst companies, and 1, the best, with zero being neutral.
Companies are expected to reach a minimum of 30% representation of women in these four measures. The index will be re-balanced every 6 months and will focus on seeing an improvement in diversity measures. Already the lowest-scoring companies have been written to with an offer to help them improve their score.
This year, LGIM pledged to vote against the chairs of boards of FTSE 350 companies if they do not have a 25% female representation at board level, as it revealed it voted against 37 board chairs in the UK in 2017 due to the lack of diversity.
LGIM is also considering adding a fifth metric scoring companies based on their gender pay gap, but as this has only just started to be reported, it has not yet been included.
Data shows that companies with more diverse senior management perform better and companies that have been robust on this have improved returns. We hope to deliver good returns after fees.”