Danny McCance 18 May 2018 11:08am

First gender diversity fund launched

The fund, launched by Legal & General Investment Management (LGIM) hopes to increase gender diversity in the equity market by encouraging better diversity standards

The L&G World Gender in Leadership UK Index Fund will focus on some of the UK’s largest companies, and favours those with greater gender diversity based on female representation across the company.

The index, created by LGIM, tracks around 350 of the UK’s largest companies.

Dame Helena Morrissey, head of personal investing at LGIM and founder of the 30% club – a business group whose focus is on reaching gender diversity in business – said she felt that gender inequality was one of the key issues of our time and that through investing in the success of women diversity could be achieved.

To achieve the highest score, companies will be expected to have at least 30% female representation in each of four areas: the number of women on the board of directors; women executives; women in management ; and women in the workforce.

The company says it may also incorporate gender pay reporting as a fifth measure.

“LGIM has been active in the diversity debate since 2011, and has been voting against all male boards since 2015,” said Clare Payn, head of corporate governance at LGIM North America.

She said that LGIM sees the matter as a business issue and that companies can only remain relevant by tapping into the most diverse talent pool.

“Boards made up of just men, from the same socioeconomic backgrounds, cannot be the best forum for challenging debates,” she added.

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.

In April, investors wrote to 14 FTSE 100 companies to demand to know why they continue to run all or almost all male executive committees and direct reports.

 On Wednesday, it was announced that Cressida Hogg will replace Dame Alison Carnwarth as chairman of real estate company Landsec, ensuring the number of women chairing a FTSE 100 company remains at six.