AXA IM targets gender diversity through voting policies

Last year the French asset manager targeted 272 companies on the basis of gender diversity concerns, up 369% from the prior year.

AXA Investment Managers is stepping up its fight against gender inequality in the companies in which it invests, setting new targets in both developed and emerging markets.

The Paris-based asset manager, which ranked 31st in Private Equity International‘s Global Investor 100 list of the biggest private equity investors around the world, will introduce a 33 percent diversity target from next year. This will aim to push listed companies in developed markets to have female members account for at least one third of their boards of directors.

“AXA IM will specifically oppose the election or re-election of the nomination committee chair where these minimum requirements are not met,” the firm said in a statement. “If the election/re-election is not on the agenda, AXA IM will vote against the approval of accounts.”

The firm is also targeting listed companies in emerging markets and Japan, as of this year, where the board of directors does not include at least one female director. In the case of larger boards, the minimum for female representation is set at 10 percent.

“Studies show that a well-balanced and gender-diverse board of directors leads to higher profitability and value creation, overcomes issues of group think, triggers debates and innovation, and leads to stronger diversity of representation across the organisation,” AXA IM’s head of ESG research and active ownership, Yo Takatsuki, said in the statement.

AXA IM had $9.9 billion, or around 1.1 percent of its assets under management, exposed to private equity as of 31 December, according to the GI 100.

The asset manager will use its voting power at companies’ general meetings if there are concerns that a company is failing to disclose and implement measures aimed at addressing gender inequality at the executive committee-level.

Last year, AXA IM focused on pressuring companies to seek gender equality at every level of the corporate hierarchy. Those efforts resulted in the asset manager targeting 272 companies due to diversity concerns – a 369 percent jump compared with the 58 companies it had targeted in 2018.

Examples of its voting activity include not approving a company’s report and accounts, or a relevant director, at companies in developed markets that had all-male boards; voting against the chairman of the nomination committee of companies in the UK FTSE All Share Index where less than a quarter of the board is female; and voting against the chairman of the nomination committee or relevant director at US companies with women comprising less than 20 percent of the board.

This year, between January and May, AXA IM has targeted 186 companies.

Greater diversity

Asked why AXA IM was focusing specifically on gender diversity and not more broadly on ethnic and socioeconomic diversity, a spokeswoman said the asset manager “will consider how to address other types of diversity”.

The firm conducts unconscious bias training for its employees, which covers racial stereotyping, the spokeswoman said.

“We are also an active participant of the Investment Association’s Diversity Project, and its campaign #TalkAboutBlack that aims to address the chronic under-representation of black talent in asset management by developing a sustainable pipeline of black leaders,” she added.

In addition, AXA IM is also piloting internally a series of group discussions focusing on ethnicity.

“We see our approach to diversity and inclusion as being on a journey and, in order to take our next steps towards driving meaningful change, we must first have an open dialogue on ethnicity to develop a deeper understanding of individual experiences from a grassroots level,” the spokeswoman explained.

“We recognise that we, and the wider asset management community must do more, and we will continue to strive for greater diversity at every level.”

AXA IM itself has achieved or exceeded the 33 percent target it has set for its investee companies, for its management board, remuneration committee and its audit and risk committee. It’s slightly below target – 29 percent – when it comes to its board of directors, with two women comprising the seven-member board.

This year, sister publication PERE named one of AXA IM’s female executives Lifetime Achievement Award Winner.

Isabelle Scemama, who has served as chief executive of AXA IM’s Real Assets division since 2017, was named global head of AXA IM Alts in March, when the firm combined its €87 billion real assets business with its €48 billion structured finance unit and its hedge fund business into a €137 billion global alternative investment platform.

The firm also created a new deputy head role, in charge of corporate development, filled by Deborah Shire. Both Scemama and Shire continue to keep their current roles as chief executive of real assets and global head of structured finance, respectively. Both also sit on AXA IM’s management board.