Influential proxy adviser ISS has recommended investors vote against the re-election of Swiss Re chair Sergio Ermotti at next month’s AGM as a “signal of concern” over the lack of gender diversity on the reinsurer’s board.
In a report ahead of the vote on April 13, Institutional Shareholder Services rebuked the Zurich-based group, which is one of the world’s biggest reinsurers and a vocal advocate of diversity, for falling short of an industry benchmark of having at least 30 per cent of boards made up of women.
Women at present make up 23 per cent of Swiss Re’s board, which will increase to 25 per cent when a male director resigns at the AGM.
ISS is advising investors to vote against the board proposal to re-elect Ermotti — former chief executive of investment bank UBS — who also chairs Swiss Re’s nomination committee, a role he took up in October.
The company is endorsing the rest of the board appointments and says the vote against Ermotti is warranted “because the board is insufficiently gender diverse”.
Proxy advisers such as ISS have influence over passive investors and large institutions, who will often follow their recommendations when voting on the range of matters put before shareholders at general meetings.
Earlier this month, Swiss Re said that it would increase female representation on the board to the 30 per cent level by the time of the next year’s AGM.
In response to the ISS move, Swiss Re said gender diversity was “of utmost importance for the composition of the board of directors” and reiterated its 30 per cent target.
“At Swiss Re, we embrace and build diversity, equity and inclusion, bringing together the best of multiple generations, cultures, skillsets and thinking . . . We strongly believe that Mr Ermotti’s measured approach to succession planning and assuring gender diversity is in the best interests of shareholders and Swiss Re.”
ISS said some investors may choose to support Ermotti’s re-election due to its recent statement on improving diversity, but added that the annual report “does not provide any further information concerning the reasons for non-compliance at this meeting, and we note that the threshold has not been met in the past years either”.
In a November report, index provider MSCI said 20 per cent of board seats on companies listed on one of its global indices were held by women, up 2 percentage points from 2018.
But it warned that “the year-over-year oscillation” in the data brought into question “how committed companies are to reaching and maintaining at least 30 per cent women representation at board level, and eventually full gender parity, in a timely manner”.
Source: Financial Times
