Legal & General launches ‘GIRL’ fund to invest in gender diverse firms

Written by Lori Campbell on 25th May 2018

The first investment fund aimed at promoting gender diversity in UK companies has been launched by Legal & General Investment Management (LGIM).

The L&G Future World Gender in Leadership UK Index ‘GIRL’ Fund will give greater weighting to firms that have the best record on gender diversity.

Companies will be scored and ranked according to a number of gender diversity measures. These will include the percentage of women on the board of directors, women executives, and women in the workforce. To be eligible for the fund, a company must reach a minimum of 30 per cent representation of women across the four measures.

Dame Helena Morrissey, LGIM’s head of personal investing, said: “Gender inequality is one of the key issues of our time – and one that generates so much frustration. Rather than feeling trapped or despondent, let’s do something about it. I’m excited about the launch of the GIRL Fund, which empowers us all to use our money to help companies to progress.”

The fund tracks an index, created by LGIM, of around 350 of the UK’s listed companies. The new initiative comes as wage disparity between men and women in the UK is being hotly debated, with companies that have over 250 employees now required to publish their gender pay gap.

LGIM, which manages about £980 billion in assets, is considering including these figures as a fifth measure for acceptance to its new fund. Under the recommendations of the Hampton-Alexander review, which was commissioned by the government, women should account for 33 per cent of senior positions in Britain’s biggest companies by 2020. The figure currently stands at about 27 per cent.

LGIM put £50 million of its own money into the GIRL Fund, which will be available to private investors and financial advisors.

Dame Helena added: “When we invest in the success of women, we are investing in the success of business. Collectively, we can help achieve gender equality and improve gender diversity in the UK.”

Clare Payn, LGIM’s head of corporate governance in North America, said the company has been pushing for gender diversity by voting against all-male boards since 2015.

She said: “We see this as a business issue. Tapping into the most diverse talent pool is vital in a competitive and changing market for companies to remain relevant. Boards made up of just men, from the same socioeconomic backgrounds, cannot be the best forum for challenging debates. The fund is a natural progression given the engagement we’ve been undertaking.”

To date only one of the UK’s 350 biggest organisations – investment firm Renewables Infrastructure Group – has achieved a top score of 100 for diversity under the GIRL index. Merlin Entertainments, Next, Marks & Spencer, media company Ascential and fashion retailer JD Williams’ owner N Brown reached a score of 85 or above.

Only a quarter of FTSE 350 board positions are currently filled by women, while a record 309 FTSE 100 board positions are now held by women – up from 133 in 2011.

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