What is First Sentier Investors doing?
Currently, many of our investment teams assess gender diversity as part their company analysis. This is generally achievable for board diversity, as gender balance is usually publicly reported, and forms part of a company’s assessment on its social and governance performance.
Where available, the gender diversity of executive leadership teams is also considered by some of our teams however the lack of reporting requirements for this, in most markets, makes it more difficult. As noted in the feature below, proprietary research by Realindex has delved deeper into the gender split of senior management teams globally and found a direct link between greater gender diversity and better company performance. The Realindex team has now included senior management diversity measures into its investment process.
We continue to be involved in industry collaborations designed to boost gender diversity on boards (Australian Institute of Directors’ 30% Club) and senior management (40:40 Vision, led by Australian superannuation fund HESTA). We are also committed to bringing more women into our own investment teams and continue to work towards our commitment to have women comprise at least 40% of investment management staff by 2033, as outlined in the Financial Services Council Women in Investment Management Charter.
Departing from previous practice, FSI’s internal diversity initiatives and gender scorecards will no longer be outlined in this report. Instead, it will be covered in detail in our inaugural Corporate Sustainability Report.
Australian Small and Mid-Cap Companies
The Australian Small and Mid-Cap Companies team frequently discuss ESG issues with senior management and board members during the team's extensive engagement with companies. The team seeks to ensure that management are aware of, and accountable for, the management of material ESG issues. These discussions contribute towards the team's overall investment view and are an integral part of the team’s investment process.
As minority shareholders, it is pleasing to support ESG initiatives and witness improvements in the companies in which we invest. A mining company, which is a key holding in the mid-cap strategy, has steadily improved its ESG practices over several years, which the team has fully endorsed. For example, the mining company has improved its gender diversity across all levels of the organisation, resulting in the workforce now comprising almost 30% women, including more than 40% female representation in the senior executive team and the board. The company’s approach to ESG considerations has helped it become one of the leaders in the mining industry globally and it remains a core holding in the mid cap strategy.
The sectors with the larger increases within Australia have tended to be within the Materials and Financial sectors, whilst globally it has been the Financials, Industrials and Materials sectors. Globally the USA and China have led the larger increases in diversity in both the board and senior management.