12 August 2016 by Henry Ker
The latest governance stories in the news
BlackRock is among several leading asset managers who have for the first time agreed to share stats on the number of women employed at a senior level. This follows concerns of a shortage of women in senior positions in the fund management industry.
According to the Financial Times, the data − which includes another six leading fund managers, Fidelity International, Capital Group, Franklin Templeton, Amundi, Baillie Gifford and Union Investment − reveals women often represent just 25% of senior executives, despite the main workforce usually having closer to around 45% female representation.
Research from Morningstar ‘Fund Managers by Gender’, into gender diversity in the fund management industry, published last year, shows women were more likely to become accountants, doctors or lawyers than fund managers, and women manage just 2% of US mutual funds.
The pay packets of top British companies’ bosses has risen to an average of £5.5 million – 147 times that of the average worker’s wage.
A new report by the High Pay Centre says remuneration of the chief executives of FTSE 100 firms had risen by 10% in 2015. The jump in average pay has been driven by large increases for a small number of CEOs; the median pay stands at £3.97 million (a £100,000 increase on 2014).
The findings come after the new Prime Minister, Theresa May, proposed measures to tackle excessive executive remuneration. In July she described the relationship between top pay and employees as described as ‘irrational, unhealthy and [a] growing gap’. Mooted policies include an annual binding vote by shareholders on executive remuneration and employee representatives sitting on boards.
Trade groups have written jointly to the new business secretary, Greg Clark, to encourage ‘caution’ on the new national living wage. The move comes amid claims that the country faces economic uncertainty after Britain’s decision to leave the EU.
The national living wage would raise pay for workers to one of the highest rates in the world by 2020. If the wage does reach the expected £9.02 by 2020, it would be the fastest increase in the country’s history, although the plan is ‘subject to sustained economic growth’.
Instead the trade groups are suggesting the government drop the 2020 target and restore the original powers of the Low Pay Commission – with minimum wage rates recommended each year based on the economy. They say this would avoid any risk to job numbers.
A new report by the charity think tank NPC, which looks at how charity governance can be improved, suggests large charities should report to the Charity Commission on their organisation’s impact as well as its financial standing.
The report, ‘Improving governance, improving impact’, also proposes that the reporting should include ‘details on training and evaluation undertaken by the board to develop its own work and remain effective’.
It also suggests the Charity Commission should change guidance on paying trustees and on allowing senior staff to sit on boards. They argue this would avoid disincentivising charities from exploring this option where reasonable and will have a knock-on effect of attracting a more diverse board.