Legal & General Investment Management (LGIM) has continued to exert pressure on UK companies to improve diversity at board level in a push for gender equality. 
From this year, the investment giant will vote against the chairs of boards of FTSE 350 companies that did not meet the 2017 target of appointing a 25 per cent female board.
One of the largest asset managers in the UK, LGIM has in recent years become outspoken on matters of diversity.
Sacha Sadan, director of corporate governance at LGIM, said: “Due to the media spotlight on failures in corporate stewardship, it can seem as though many companies are not doing a good job addressing ESG-related matters. In fact, the vast majority of companies are making significant progress – we simply believe there is more to be done.
“The same is true of asset managers. We, too, need to intensify our efforts to help deliver long-term value for clients by actively engaging with companies and regulators.”
In 2017, LGIM voted against 37 board chairs or chairs of nomination committees in the UK because of a lack of diversity. The same year, the company projected its vision of gender-equality onto the US market and voted against S&P 500 companies that had all-male boards on matters of diversity.
LGIM’s announcement come as the Investment Association and the Hampton-Alexander Review writes to 35 FTSE 350 companies that have poor diversity at executive level, calling on them for change; 14 of the companies targeted are part of the FTSE 100 and include BP, Persimmon and TUI.
The government-commissioned Hampton-Alexander Review revealed in 2016 a failure to represent women at the highest level. The 35 companies have been asked to explain their poor gender balance and what steps they are taking to move towards the targets set out in the review.
Chris Cummings, chief executive of the Investment Association, said: “The body of research is clear: firms with a diverse management team and pipeline make better decisions and drive innovation. The target of 33 per cent for women in senior leadership positions by 2020 absolutely aligns with investors’ desire to see the companies they invest in recognising diversity as a critical business issue.
“The Hampton-Alexander recommendations have now been in place since November 2016. Investors are becoming restless and want companies to take action.”
Also on LGIM’s agenda are other matters of environmental, social and governance issues including environmental stewardship and executive pay.
The fund group held 108 meetings last year to discuss climate change and voted in favour of 95 per cent of positive solutions while challenging 215 remuneration packages, up 40 per cent from 2016.