Legal & General (L&G), a leading financial services company, has demanded that all FTSE-100 companies must have a BAME (Black, Asian, Minority Ethnic) director by 2022.
L&G has announced that they are calling on all FTSE 100 companies and S&P 500 in the US to appoint a non-white director by 2022. If it does not meet this deadline, it has vowed to vote against the re-appointment of the national committee chairman from the 30 plus firms that have all-white boards. HRreview has previously reported on the CBI calling on the FTSE 100 to appoint at least one non-white member at board level by 2021.
This is a significant move as L&G manages £1.2 trillion worth of pension funds which means it owns up to 3 per cent of every British blue-chip company.
According to a report published by L&G, over half (52 per cent) of FTSE 100 companies have all caucasian boards. It also stated that 37 per cent of firms in the S&P 500 also have all-white boards.
L&G stated that the company chose to make this decision after the murder of George Floyd in the US, writing:
The horrifying killing of George Floyd and so many others has led many institutional investors to think much more seriously about structural racism and inequality.
We have been longstanding advocates for cognitive diversity in the companies in which we invest, and have spent a lot of time improving the gender balance of those companies, through both engagement and voting, with great success in the UK and in the US.
Our expectation is that companies set ambitions related to the ethnic composition of their organisation, throughout the workforce, with a particular emphasis at the board level, which generally sets the tone from the top.
For companies that fail to meet our transparent and rules-based minimum expectations, there will be voting and investment consequences.
We focus on the board, as this is where accountability for the issue belongs, and where we can have most influence as we are able to elect board members annually.