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43 Investment Trusts Have No Women on the Board

While progress has been made, there is still a lack of diversity on investment trust boards, research shows

(Morningstar) Forty three of the 303 investment trusts listed in the UK still have all-male boards, research by Investec reveals. The research shines a light on the sluggish progress the asset management industry is making towards inclusiveness.

It means that 14% of the investment trust boards have no women on them, perpetuating the so-called "pale, male and stale" culture associated with the industry.

Overall the proportion of female directors on the boards of investment trusts has increased threefold since 2010, Investec notes, with women now accounting for 27.9% of director positions.

While 43 investments trusts still have no female representation on the board, this is a vast improvement from less than a decade ago when 159 of 238 investment trusts had no female directors. Some 68 trusts had no females on their boards as recently as 18 months ago.

Morningstar analyst David Holder says: “This is generally an improving story. There is a growing trend to push diversification on boards, but obviously there are outliers with quite a bit more work to do."

Rebecca O'Keeffe, head of investment at interactive investor, adds: “Gender diversity has been a significant issue in the wider investment industry, not just the investment trust sector. It is encouraging that the number of female directors has increased – notably doubling over five years to 2017, but this is from a low base."

She points out that the Association of Investment Companies (AIC) - the trade body for the investment trust industry - encourages boards to consider their composition and diversity as part of their annual review, and indeed leads from the top, with a strong record of women leading the trade body at chairperson and non-executive level.

O'Keeffe adds: "But crucially, we need to see individual trusts making their own boards more diverse too, and they need to take action as soon as possible."

Among the male-dominated investment companies named in the report are the three-star rated BlackRock Income and Growth, the £412 million Supermarket Income REIT and £456 million Tritax EuroBox.

At the other end of the spectrum, JPMorgan US Smaller Companies and Impax Environmental Markets are among the most diverse trusts. Some four out of six members of the Impax board are female, with Julia Le Blan having held her position since 2011. Half of the JPMorgan board is female, with chairman Davina Walter having been in her role since 2002.

Investment Trusts with All-Male Boards

Much research has shown that gender diversity is good for business, enhancing innovation and productivity. The 30% Club Campaign, for example, believes that greater gender balance on boards and in senior management not only encourages better leadership and governance, but contributes to better all-round board performance, and ultimately increased corporate performance for both companies and their shareholders.

The FTSE 350 passed the 30% mark for women for boards for the first time in September following pressure from the trade body Investment Association (IA), which has been challenging these companies, sending letters to the ones with just one or no woman on their boards – it made a list of 94 companies that received a “red and amber warning" for the lack of gender diversity.

The 30% Club had also been pressuring Britain's blue chip businesses. The non-profit was launched in 2010 by Dame Helena Morrissey with the aim of achieving a minimum of 30% female representation on FTSE 100 boards and this was reached in September 2018. It then extended the scope to the FTSE 350.

Emma Maslin, founder of The Money Whisperer, says many of her female clients are put off of investing because of the perception of the industry being dominated by "older, grey-haired men in a suit".

"Women don't identify with this image whatsoever, so it's not surprising that it’s hard to get more women excited about investing," she says. "While getting more female representation on the boards of investment trusts isn’t going to change this perception overnight, it will certainly help shape how people see the industry over time.”

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