The making of the Future World GIRL Fund

May 2018


Dame Helena Morrissey (Head of Personal Investing): Gender equality is one of the key issues of our age, and one that generates so much frustration. But rather than feeling trapped, or despondent about it, why don’t we do something about the issue? I’m really excited about the GIRL fund because it empowers us all to use our money to accelerate progress. The Fund invests more in those companies doing the most for the women in their own workplaces, and reduces the allocation in those companies that don’t seem to be committed to the issue. I believe that when we invest in the success of women, we’re investing in the success of business.


Helena Morrissey:Elitsa, you were almost the first person I think that I spoke to about the idea of a gender-related fund, the Girl fund. tell me your reactions and let’s talk about your role in taking us to this point.


Elitsa Karamitreva (Product Strategy and Development Manager): My initial reaction was that I was very excited about having such a fund because it’s very different than what you normally see an investment house delivering. My role in the whole project is: how do we want it to look, how does this product fit into our strategy, and ultimately to actually deliver the GIRL fund for all of us to be able to invest in.


Helena Morrissey: Fadi, you have been working on some of the methodology around the Girl fund, and there are four criteria that go together to make up the score that a company has. How did you choose those criteria?


Fadi Zaher (Head of Product Specialists: Index, Asset Allocation, Factor-Based Investing): When you design an index fund, or actually any strategy, the most important thing is to have consistency in the way you select the data, because if you have bad data, you will have a bad output; that’s just typically the case. So, when we looked at the general market, we looked at what are the consistent data that we can then bring to an index fund, and these four data points are: women on boards, women in the [work]force, women in management and women in executive roles. For these data points, we’ve managed to find good, reliable history and also maintained mainstream numbers that we can bring into index funds. I do think over time we will bring in more data points into the fund, but these are the four consistent data points that allow us to actually create an index fund.


Helena Morrissey: So obviously the four criteria are clear, but the one that everyone’s been talking about in the newspapers recently has been the Gender Pay Gap; what are the plans to include that data point in the scoring?


Fadi Zaher: It will be included in the future scoring, it’s just that we’re trying to find reliable data that we can then take and bring into the index.


Helena Morrissey: And you work on engaging with companies to try and encourage them to do more around diversity?


Jeannette Andrews (Corporate Governance Manager): When companies are not meeting our expectations with respect to diversity, so for example where they do not have diverse boards, we are already using the vote to vote against the Chairman. And that’s really important because the Chairman is responsible for deciding who is on the board, and if they are not forming a board that is diverse and full of different talents, we are going to hold them responsible for that. The GIRL fund takes this one step further by rewarding companies who are doing a really good job, so it’s an additional tool for us to hold companies to account.


Helena Morrissey: David, tell me what gender equality means to you?


David Barron (Fund Manager): I think it means opportunity for future generations, I’m thinking specifically about my 13-month old daughter, my two nieces, my sisters even, who are in the professional industry. So just hopefully a change to do just that: making it equal opportunity for, you know, for the world I guess.


Helena Morrissey: What are you hoping that we’ll achieve through this Fund, Elitsa?


Elitsa Karamitreva: I’m hoping first of all to encourage companies to be more open about diversity and inclusion, to be thinking about their workforce and making their employees feel included and, ultimately, I’m hoping to create a better impact on the broader society with this.


Helena Morrissey: Silvio, do you think it’s possible we can do that?


Silvio Corgiat Mecio (Senior Solutions Manager): Yes, I think it’s possible, changing the values, firstly in culture, and making sure that these values are well spread across society, and are well received so that it becomes the standard.


Helena Morrissey: Have there been any particular instances in your own career where you’ve seen inequality?


Aniket Das (Senior Investment Strategist, Index and Factor-Based Investing): I was born in India, and my mum during the mid-‘80s worked as a bank manager. She was the only female bank manager in the whole state in India. So obviously that makes me really proud, but at the same time it makes me think of how unequal society has been in the past and certainly still is to an extent.


Helena Morrissey: Do you think the GIRL fund could make a difference in terms of the speed of progress?


Justin Onuekwusi (Fund Manager, Asset Allocation, and Co-chair of diversity and inclusion working group for the investment floor): I think it’s a huge initiative because I think actually it looks positively on companies, which are addressing the issues.


Cosmo Elms (Senior Product Strategy and Development Manager): I think the Fund really helps to champion those companies that are making good progress towards creating diverse and inclusive environments in which women can flourish in their careers.


Helena Morrissey: Mark, you’ve long championed gender equality at Legal & General; why is it so important an issue to you?


Mark Zinkula (CEO, Legal & General Investment Management): Professionally, I’ve been exposed to this topic really from when I first entered the industry back in 1990. And even coming over here in this role seven years ago, the leadership team was entirely male, the asset management board was entirely male, and I realised pretty quickly we needed to make some changes.


Helena Morrissey: And what are your hopes for the GIRL fund?


Mark Zinkula: There’s a growing body of evidence that indicates, that helps support the notion that more diverse leadership teams and boards make better decisions and have higher long-term performance, and so we’ve identified a way to select those companies and allow people to invest in them in this Fund.


Helena Morrissey: Nigel, tell me what does gender equality mean to you?


Nigel Wilson (Group Chief Executive): First of all, you know, I’ve got five daughters, you’ve got six daughters, so we have a football team between us!


Helena Morrissey: A vested interest in the next generation!


Nigel Wilson: Enlightened self interest. And so, you know, I’ve really, really understood, growing up with daughters, how difficult it is to actually achieve equality in the workforce.


Helena Morrissey: Legal & General is putting £50 million of its own funds in the Fund, so are putting the money where the mouths are, and I guess it’s something that’s strategically important to the firm?


Nigel Wilson: On many levels, absolutely, we have to back all of these great ideas with our own money and this is just helping to kick-start what I hope will be a hugely successful fund, right across the UK, that people see that actually this is a fund that can make a difference, and make a positive difference.


Don’t just take our word for it: hear key voices on gender diversity May 2018

What does gender diversity mean to you?

“Gender Equality means to me what I think it should mean to everyone in 2018, which is that you’re not going to have a very high performing team if you don’t have a diverse one.”


“This is a really important thing, not just for young women, but for young men as well, and it feels like we are part of a generation that is pushing for change.”


“I think that just because of your gender you shouldn’t have to be limited in what you can do in life.”


“It means a more diverse working environment, it means an environment where we see more creativity, from more different opinions, and as a result of that a more innovative environment.”

Should companies be held to account for their approach to gender diversity?

“I definitely think that’s really important and I think they can be held to account in a number of ways, by their CEOs, their Executive Boards, by their employers, by external agencies as well. And I think the numbers speak for themselves.”


“I’m a great believer in making it accountable to people in the organisation, that anyone in a position of leadership has to do their bit on diversity; it’s part of their leadership role in an organisation.”


“Yeah, I think companies should definitely be encouraged to do more than just report on the statistics around gender pay.”


“I absolutely think that companies should be held to account in terms of what they’re doing for gender balance. I think the Gender Pay Gap reporting has been a step in the right direction, but ultimately it’s where we take that information and what we do with it that actually matters.”


“One hundred percent, I think it’s really important that companies are held to account in terms of gender balance, not only to make sure that discrimination doesn’t continue in the workplace, but also it’s just good business.”

How do you feel about gender equality being so much in the news?

“The fact that gender equality is in the news so much lately is very uplifting and encouraging.”


“I think the more awareness you can give around something, an issue or a topic, the more that people pay attention and hopefully do and act upon it, change things for the better.”

What do you think of a fund such as the GIRL fund?

“I think that as a young girl in today’s society, knowing that there are people that are trying to make that difference for our generation, that’s something that really excites me.”


“I think the GIRL fund is a great idea because anything we can do to encourage progress is going to be beneficial.”


“I think that the GIRL fund sounds like a really good idea; I mean it would definitely encourage those companies and almost give them more of a boost if they’re already thinking about this current issue I think that’s a very progressive concept to have within a company.”


“I think ethical investments happen in all sorts of sectors. You’ve got to choose who you invest with ethically and that stands just as much for gender equality as for anything else.”

For listed companies: find out here how you can improve your score

Company Name Gender Diversity Score
888 HOLDINGS PLC 14
AA PLC 37
ANGLO AMERICAN PLC 33
ASSOCIATED BRITISH FOODS PLC 38
ACACIA MINING PLC 13
ADMIRAL GROUP PLC 47
AGGREKO PLC 49
ASSURA PLC 62
ASHTEAD GROUP PLC 33
ANTOFAGASTA PLC 21
ASCENTIAL PLC 93
ASHMORE GROUP PLC ORD 19
ASOS 74
AUTO TRADER GROUP PLC 52
AVIVA PLC 55
AVEVA GROUP PLC 35
ASTRAZENECA PLC 65
BABCOCK INTERNATIONAL GROUP PLC 23
BAE SYSTEMS PLC 25
BALFOUR BEATTY PLC 20
BARCLAYS PLC 40
BRITISH AMERICAN TOBACCO PLC 36
BBA AVIATION PLC 25
TRITAX BIG BOX REIT PLC 33
BARRATT DEVELOPMENTS PLC 54
BELMOND LTD 50
BEAZLEY PLC 33
BGEO GROUP PLC 50
BERKELEY GROUP HOLDINGS PLC 31
BRITISH LAND CO PLC 59
BHP BILLITON PLC 49
B&M EUROPEAN VALUE RETAIL SA 31
BUNZL PLC 30
BODYCOTE/D 35
BP PLC 32
BURBERRY GROUP PLC 69
BREWIN DOLPHIN HOLDINGS PLC 60
BT GROUP PLC 35
BTG PLC 57
BRITVIC PLC 36
BOVIS HOMES GROUP PLC 29
N BROWN GROUP PLC 91
BELLWAY PLC 19
BIG YELLOW GROUP PLC 52
CAPITAL & COUNTIES PROPERTIES PLC 55
CARD FACTORY PLC 58
CLOSE BROTHERS GROUP PLC 61
COMPUTACENTER PLC 25
COCA-COLA EUROPEAN PARTNERS 43
CARNIVAL PLC 27
CENTAMIN PLC 16
CINEWORLD GROUP PLC 60
CLARKSON PLC 14
CENTRICA PLC 36
CAIRN ENERGY PLC 34
CNH INDUSTRIAL NV 28
COATS GROUP PLC 36
COBHAM PLC 36
COMPASS GROUP PLC 39
CAPITA PLC 54
CRODA INTERNATIONAL PLC 27
CREST NICHOLSON HOLDINGS PLC 35
COUNTRYSIDE PROPERTIES PLC 46
CONVATEC GROUP PLC 34
COUNTRYWIDE PLC 72
CRANSWICK 21
CYBG PLC 59
DIXONS CARPHONE PLC 41
DCC PLC 36
DAIRY CREST GROUP PLC 25
DEBENHAMS PLC 62
DFS FURNITURE PLC 54
DIAGEO PLC 64
DIRECT LINE INSURANCE GROUP PLC 34
DIALOG SEMICONDUCTOR PLC 17
DERWENT LONDON PLC 47
DAILY MAIL AND GENERAL TRUST P L C 26
DUNELM GROUP PLC 49
DOMINOS PIZZA GROUP PLC 50
DECHRA PHARMACEUTICALS PLC 44
DIPLOMA PLC 26
DRAX GROUP PLC 26
DIGNITY PLC 33
ELECTROCOMPONENTS PLC 40
EI GROUP PLC 54
ELEMENTIS PLC 22
MAN GROUP PLC 27
ENQUEST PLC 12
ESSENTRA PLC 20
ESURE GROUP PLC 65
EVRAZ PLC 27
EXPERIAN PLC 33
EASYJET PLC 65
FIAT CHRYSLER AUTOMOBILES NV 27
FDM GROUP HOLDINGS PLC 51
FIDESSA GROUP PLC 19
FENNER PLC 39
FIRSTGROUP PLC 37
FRESNILLO PLC 8
FERREXPO PLC ORD 21
GENEL ENERGY PLC 32
GALLIFORD TRY 26
G4S PLC 33
GKN PLC 17
GREENE KING PLC 48
GENUS PLC 32
GO-AHEAD GROUP PLC 34
GREAT PORTLAND ESTATES PLC 48
GREGGS PLC 59
GRAINGER PLC 70
GLAXOSMITHKLINE PLC 62
GVC HOLDINGS PLC 11
HAYS PLC 41
HALFORDS GROUP PLC 74
HIKMA PHARMACEUTICALS PLC 35
HILL & SMITH HOLDINGS PLC 16
HALMA PLC 51
HAMMERSON PLC ORD 40
HOCHSCHILD MINING PLC 8
HARGREAVES LANSDOWN PLC ORD 36
HSBC HOLDINGS PLC 34
HASTINGS GROUP HOLDINGS LTD 36
HANSTEEN HOLDINGS PLC 53
HOMESERVE PLC 47
HISCOX LTD 42
HUNTING PLC 14
HOWDEN JOINERY GROUP PLC 27
IBSTOCK PLC 21
INTERNATIONAL CONSOLIDATED AIRLINES GROUP SA 41
INTERMEDIATE CAPITAL GROUP 17
IG GROUP HOLDINGS PLC 26
INTERCONTINENTAL HOTELS GROUP PLC 49
3I GROUP PLC ORD 49
IMPERIAL BRANDS PLC 54
IMI PLC 26
INCHCAPE PLC 34
INDIVIOR PLC 46
INFORMA PLC 51
INTU PROPERTIES PLC 43
INVESTEC PLC 41
INTERNATIONAL PERSONAL FINAN 36
INTERSERVE PLC 24
INMARSAT PLC 29
INTERTEK GROUP PLC 48
ITV PLC 53
JD SPORTS FASHION PLC 26
J.D. WETHERSPOON PLC 63
JUST EAT PLC 28
JANUS HENDERSON GROUP PLC 51
JOHN LAING GROUP PLC 34
JARDINE LLOYD THOMPSON GROUP 32
JOHNSON MATTHEY PLC 47
JUPITER FUND MANAGEMENT PLC 60
JUST GROUP PLC 8
KAZ MINERALS PLC 15
KINGFISHER PLC 73
KIER GROUP PLC 18
LAND SECURITIES GROUP PLC 69
LIBERTY GLOBAL PLC - CLASS A 28
LIBERTY GLOBAL PLC - CLASS C 28
LEGAL & GENERAL GROUP PLC ORD 57
LIVANOVA PLC 19
LLOYDS BANKING GROUP PLC 55
LONMIN PLC 58
LONDONMETRIC PROPERTY PLC 42
LAIRD PLC 40
LANCASHIRE HOLDINGS LTD 49
LONDON STOCK EXCHANGE GROUP ORD 31
MITCHELLS AND BUTLERS PLC 36
MARSTONS PLC 60
MICRO FOCUS INTERNATIONAL PLC 34
MCCARTHY & ST 28
MEDICLINIC INTERNATIONAL PLC 45
MERLIN ENTERTAINMENTS PLC 93
MORGAN ADVANCED MATERIALS PLC 26
MEGGITT PLC 30
MORGAN SINDALL GROUP PLC 26
MARKS AND SPENCER GROUP PLC 85
MONDI PLC 26
MONEYSUPERMARKET.COM GROUP PLC 32
MELROSE INDUSTRIES PLC 0
WM MORRISON SUPERMARKETS P L C 40
MARSHALLS PLC 35
MITIE GROUP PLC 19
METRO BANK PLC 49
NCC GROUP PLC 23
NATIONAL EXPRESS GROUP PLC 46
NATIONAL GRID PLC 53
NEWRIVER REIT PLC 33
NORTHGATE PLC 50
NEX GROUP PLC 18
NEXT PLC 88
OCADO GROUP PLC 22
OLD MUTUAL PLC 63
ONESAVINGS BANK PLC 47
PAGEGROUP PLC 47
PARAGON BANKING GROUP PLC 49
PETS AT HOME GROUP PLC 63
PETROFAC LTD 22
PROVIDENT FINANCIAL PLC 38
PHOENIX GROUP HOLDINGS 33
POLYPIPE GROUP PLC 22
PREMIER OIL PLC 21
PENNON GROUP PLC 42
PRUDENTIAL PLC 41
PERSIMMON PLC 24
PEARSON PLC 42
PLAYTECH LTD 23
PZ CUSSONS PLC 37
QINETIQ GROUP PLC 23
RATHBONE BROTHERS PLC 35
RECKITT BENCKISER GROUP PLC 44
ROYAL BANK OF SCOTLAND GROUP PLC 46
RDI REIT PLC 38
ROYAL DUTCH SHELL PLC ORD A 34
ROYAL DUTCH SHELL PLC 34
REDROW PLC 62
Redde PLC 17
RELX PLC 64
RIO TINTO PLC 30
ROYAL MAIL PLC 59
RIGHTMOVE PLC 67
ROTORK PLC 35
RPC GROUP PLC 28
ROLLS-ROYCE HOLDING PLC 34
RANDGOLD RESOURCES LTD 28
RSA INSURANCE GROUP PLC 40
RENISHAW PLC 22
RESTAURANT GROUP PLC/THE 45
RENTOKIL INITIAL PLC 36
RENEWI PLC 19
SAFESTORE HOLDINGS PLC 27
SAGA PLC 53
J SAINSBURY PLC 46
SOFTCAT PLC 13
SCHRODERS PLC ORD 44
SEADRILL LTD 31
SUPERDRY PLC 43
SCHRODERS PLC ORD NVTG 44
STAGECOACH GROUP PLC 19
SAGE GROUP PLC 47
SEGRO PLC ORD 40
SHAFTESBURY PLC 75
SIG PLC 24
ST JAMES S PLACE PLC ORD 40
SKY PLC 45
STANDARD LIFE ABERDEEN PLC 46
DS SMITH PLC 21
SMITHS GROUP PLC 45
ST. MODWEN PROPERTIES PLC 39
WH SMITH PLC 52
SMITH & NEPHEW PLC 59
SANNE GROUP PLC 14
SENIOR/D 40
SOPHOS GROUP PLC 44
SPORTS DIRECT INTERNATIONAL 34
SPIRE HEALTHCARE GROUP PLC 53
SPIRAX SARCO ENGINEERING PLC 23
SERCO GROUP PLC 30
SSE PLC 45
SSP GROUP PLC 58
STANDARD CHARTERED PLC 54
STOBART GROUP LTD 5
SUBSEA 7 SA 12
SAVILLS PLC 24
SEVERN TRENT PLC 70
SPECTRIS PLC 19
SIRIUS MINERALS PLC 41
SYNTHOMER PLC 15
TALKTALK TELECOM GROUP PLC 51
TATE & LYLE PLC 45
TP ICAP PLC 51
THOMAS COOK GROUP PLC 67
TED BAKER PLC 26
TELECOM PLUS PLC 28
TULLOW OIL PLC 26
TRAVIS PERKINS PLC 42
THE RENEWABLES INFRASTRUCTURE GROUP LTD. 100
TESCO PLC 54
TAYLOR WIMPEY PLC 27
UBM PLC 80
ULTRA ELECTRONICS HOLDINGS PLC 17
UNILEVER PLC 71
UNITE GROUP PLC 33
UNITED UTILITIES PLC 29
VICTREX PLC 41
VECTURA GROUP PLC 40
VEDANTA RESOURCES PLC 18
VIRGIN MONEY 72
VODAFONE GROUP PLC 43
VESUVIUS PLC 15
WEIR GROUP PLC 27
JOHN WOOD GROUP PLC 28
WORKSPACE GROUP PLC 39
WILLIAM HILL PLC 36
WPP PLC 70
WHITBREAD PLC 61
ZPG PLC 28

The Future World GIRL Fund

Future World Gender in Leadership UK Index Fund

Gender inequality is one of the biggest issues of our time – and one that generates so much frustration. Rather than feeling trapped or despondent, let’s do something about it. That’s why we’re excited to launch the Future World GIRL Fund, which empowers all of us to use our money to help improve gender diversity in the UK.

The fund works by favouring those companies which have achieved higher levels of gender diversity.

When we invest in women’s success, we are investing in the success of businesses.

View Transcript

This is a fund that can make a difference, and make a positive difference.

Nigel Wilson – Legal & General Group CEO

Say hello to the new Future World GIRL Fund

We believe the best business decisions are made when there’s a diverse group of people debating and challenging them. That’s why the Future World GIRL Fund focuses on UK companies that are committed to gender diversity at board level and beyond. Increasing gender diversity means different perspectives get heard, which can lead to better outcomes for the customer, company and society. It’s not just the right thing to do; it makes business sense.

#EmpowerWomen

Diversity should be seen as the solution, not another problem to solve

Don’t just take our word for it: hear key voices on gender diversity

Play Video

View Transcript

How does the fund work?

The Future World GIRL fund invests in companies based on how they are performing against four measures of gender diversity. We take around 350 of the largest companies in the UK and give them a score between 0-100 based on:

The percentage of women on the

Board of Directors

The percentage of women who are

Executives

The percentage of women who are

Managers

The percentage of women in the

Workforce

Companies must achieve a 30% representation of women in these four measures before they receive a positive gender diversity score.

We will engage with low-scoring companies to discuss how they can improve their gender diversity.

A new kind of score

The Future World GIRL fund tracks our newly created ‘Solactive L&G Gender in Leadership UK Index’.

We apply our proprietary gender diversity scores to the index, which forms our original investment universe, ‘tilting’ the index in favour of high-scoring companies and away from low-scoring ones.

+View companies’ gender diversity scores

Diversity champions for almost a decade

We have been talking about the benefits of diversity with companies, recruitment agencies and at a higher policy level since 2011.

We’ve also been long supporters of the 30% Club, The Diversity Project and a signatory to the Women in Finance Charter.

Here are some key milestones in our gender diversity work.

2010

We became a contributing supporter to the Davies Report and Hampton-Alexander Review.

2015

We started voting against Chairs of all-male boards at FTSE 100 companies.

2016

We started voting against Chairs of all-male boards at FTSE 250 companies.

2018

We started voting against FTSE companies with less than 25% female board members.

Together we can own our world

Start investing in the Future World GIRL Fund

Please remember the value of your investment and any income from it may fall as well as rise and is not guaranteed. You may get back less than you invest.

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