AXA IM Imposes One Third Board Gender Diversity Target

    Stockholm (NordSIP) – AXA Investment Managers (AXA) announced a policy of promoting gender diversity in the companies it owns by demanding that at least one-third of the Board of Directors be gender diverse from 2021. AXA will apply a separate 10% gender diversity target for emerging markets and Japan.

    According to the French investment manager, it will “specifically oppose the election or re-election of the Nomination Committee Chair where these minimum requirements, are not met. If the election/re-election is not at the agenda, AXA IM will vote against the approval of accounts.” The asset manager warns it may also use its voting power at a company general meeting as a tool to address concerns at companies that fail to provide appropriate disclosure and measures on executive committee diversity and have no credible plan to address the topic.

    As of the end of the first quarter of 2020, AXA IM employed over 790 investment professionals in 15 investment centres and held €804 billion in assets under management.

    Studies show that a well-balanced and gender-diverse Board of Directors leads to higher profitability and value creation, overcomes issues of groupthink, triggers debates and innovation, and leads to stronger diversity of representation across the organisation,” Yo Takatsuki, Head of ESG Research and Active Ownership at AXA Investment Managers, said. “These changes are in line with our belief that we must hold Boards of Directors accountable to best governance standards in their role as guardians of sustainable performance. The introduction of our 33% target for listed companies in the developed world and new policy for companies in emerging markets and Japan, is the next critical step for us as we continue to build on our voting policies around gender diversity, and make the most of our rights as an investor to engage companies in productive dialogue that makes a tangible difference.”

    AXA hopes that the new target will allow it to hold all its investments to the same standards of diversity, and advance the cause of gender diversity. The new policy builds on previous initiatives by the French asset manager. Since 2019, AXA IM has pressed companies to proactively seek gender equality at every level of the corporate hierarchy while improving its integration of gender diversity into its voting at AGMs.

    It opposed all-male boards at companies in developed markets. More specifically, it voted against the chairman of the nomination committee at UK FTSE All Share Index companies where less than a quarter of the board was female and at US companies where less than 20% of the board was female. This approach led AXA IM to clash with 245 of its companies on gender diversity issues, in 2019, up from only 45 companies the year before. Between January and May 2020, AXA IM voted against 230 resolutions at 186 meetings due to gender diversity issues.

    “As long-term stewards of our clients’ investments, we believe that the interests of shareholders are best served where the Board of Directors is structured in a manner to ensure that there is an appropriate diversity of skills, knowledge and experience amongst the directors on the board which is suitable for the requirements of the business,” Takatsuki concludes.

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    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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