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Churches to get tougher at AGMs over pay, climate change, gender

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The Church Investors Group (CIG), representing church organisations with combined assets of around £17bn (€19bn), has told FTSE 350 companies that it will take a harder line at annual general meetings where it considers change in three key areas to be too slow.   

It will also encourage other shareholders to refuse to re-elect directors where a company is out of line with best practice.

In terms of executive pay, the CIG – which includes the main investing bodies of the Church of England and the Methodist Church – will consider fairness in the workplace, and withhold support for remuneration reports where chief executive pensions are deemed excessive.

It will also withdraw support against a remuneration report where pay ratios are not disclosed, or where financial services or pharmaceutical companies do not pay the living wage.

In promoting gender diversity, CIG members will now vote against the re-election of nomination committee chairs where fewer than 33% of board directors are women, and it will vote against all directors on the nomination committee if woman make up less than 25% of the board.

The third key area is climate change. CIG members will now vote against the re-election of the company chair when a company is considered to be making little progress on transitioning to a low carbon world.

Companies will be measured against their scores from the Transition Pathway Initiative, a tool designed to help asset owners better understand and address their exposure to risks and opportunities stemming from climate change.

Carlota Garcia-Manas, deputy head of engagement for the Church Commissioners and Church of England Pensions Board, said: “We continue to see climate change as a key issue and encourage other investors to partner with us in ensuring we hold companies accountable to the highest standards and adapting their activities to fit with the Paris Agreement.”

The full CIG voting policy is here.

Meanwhile, Wellcome Trust – the UK’s largest charity, with assets of £23.2bn at the end of September 2017 – has revealed an above average gender pay gap.

The gender gap in its median pay was 20.8% as at April last year. The UK gender gap average is 18%.

Wellcome said the gap existed mainly because of the disproportionate balance of men and women at different levels within the organisation. Overall, around 64% of its employees are women, but most of the highest-paid senior roles are held by men.

The charity said: “This year we will introduce fairer ways to support the recruitment, progression and retention of women at senior leadership levels. We will improve our diversity data so that we understand better where to target new initiatives, and provide staff training to mitigate bias.”

All UK employers with more than 250 staff are required to publish gender pay gap data on the government website by April 2018.

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