GLOBAL - A coalition of global investors managing more than $73bn (€51.8bn) in assets has called on companies across the world to increase representation of qualified women on boards of directors and in senior management.

The coalition has asked 54 selected companies from across the business spectrum for greater clarity about gender balance within their organisations.
The call from Pax World Management, Calvert Investments and Walden Asset Management comes in response to a survey of 4,200 global companies that found only 9.4% of directors on corporate boards were women.

These findings have led a number of mainstream investors to identify gender balance and diversity as a strategic issue in their investment activity.

Joe Keefe, president and chief executive at Pax World, said: "We view gender equality and women's empowerment as strategic business and investment issues.

"When women are at the table, the discussion is richer, the decision-making process is better, management is more innovative and collaborative and the organisation is stronger.

"Because companies that advance and empower women are, in our view, better long-term investments, we are encouraging companies in our portfolios to enhance their performance on gender issues."

The investor initiative is a response to the Women's Empowerment Principles recently developed by the UN Development Fund for Women (UNIFEM) and the UN Global Compact.

The members of the coalition are all also signatories to the UN-backed Principles for Responsible Investment (PRI).

James Gifford, executive director of the PRI Initiative, said: "This engagement shows gender balance within senior corporate management is not just a social issue, but also a shareholder issue.

"In an increasingly complex global market, companies that effectively attract, hire, retain and promote women are often better equipped to capitalise on competitive opportunities than those who do not."

The PRI coalition also reports increasing recognition of the value of board diversity by regulatory bodies worldwide.

The Netherlands, Norway and Spain have passed legislation requiring that either 30% or 40% of board members be women, with Belgium, France, Germany and Sweden considering similar legislation.

In the US, the Securities and Exchange Commission adopted new rules for proxy disclosure earlier this year, which include a requirement for companies to disclose how their nominating committees consider diversity in identifying board nominees.

With its establishment of the Office of Minority and Women Inclusion, the recently passed Wall Street Reform also acknowledges the benefits of diversity in management, employment and business activities.

In other news, Legal & General Investment Management (LGIM) has welcomed the new UK Stewardship Code on corporate governance.

Following the financial crisis, it does not come as a surprise to LGIM that five key areas of corporate governance are back on the agenda for discussion - collective engagement, the role of the non-executive directors, board evaluation and succession planning, regulation and remuneration.

Andy Banks, head of corporate governance at LGIM, said: "One feature of the new UK Stewardship Code we find particularly useful is the ability for shareholders to consult with each other when issues arise at companies in which they invest.

"While there is no 'one size fits all' approach, experienced corporate governance teams can help companies they engage with to both manage risks and ultimately improve their bottom line.

"We have always been clearly focused on our ownership responsibilities, and the new UK shareholder Stewardship code will see a raising of the standards of corporate engagement generally, which will prove to be beneficial to investors in UK PLC over the long term."