20th June 2018 3 minutes read

Shareholder Activism - A force for diversity?

Traditionally shareholder activism in the UK has been focused on board composition, executive pay and financial performance. However, investors are becoming increasingly vocal on issues like diversity, gender pay gaps and ethical work practices. Legal & General Investment Management, for example, have vowed to vote against the re-election of any Chairman whose board consists of fewer than 25 per cent women.

While this may be a reaction to the new ‘say on pay’ legislation, there is no reason to believe shareholder activism will be a short-lived trend. Last year industry monitor Activist Insight reported that, globally, 758 companies received public demands from shareholders, a 13% increase on 2015. This included 104 S&P 500 businesses and 8 in the FTSE 100.

Retailers are no exception, one high profile example of this is the animal rights campaigners, Peta buying shares in LVMH, owner of Louis Vuitton and several other luxury brands, allowing it to attend shareholder meetings and question the Board.

If this is the way of the future, then it is worth discussing some of the likely risks for retailers.

Recent research from Business of Fashion found that 73 percent of the 15 largest global public companies in the fashion and apparel sector are led by white male chief executives. At Board of Directors level, only 11 percent were from a Black and Minority Ethnic (BAME) background.

Green Park’s own ‘Leadership 10,000’ (2017) research is a thorough analysis of the diversity of 10,000 of the most senior employees operating within the FTSE 100, by gender, ethnicity and cultural background. Through this research we found that, within the consumer goods and retailing sectors, only 7.5% was ethnoculturally diverse and only 28.2% female.

Our experience with clients and partners and the wider consumer sector is that almost everyone now understands the commercial and reputational gains to be made from greater diversity. Yet very few are asking “what can we do to deliver sustainable change in increasing diversity and how can we do it faster?”

There is a clear action gap in global retail. Change is coming and if it is to come from within rather than from shareholder activism and bad PR, then real and consistent actions need to be taken. The challenges of turning a traditional retail leadership culture into a diverse one is difficult and will take time – it’s not tokenistic hires and quick fixes. It’s about creating lasting and sustained value and brand loyalty.

As a response to our clients’ needs, and in line with our core values, Green Park has invested heavily in its Diversity and Inclusion (D&I) practice. Jo Heath recently joined to lead our D&I practice. Jo has extensive experience in D&I most recently with Ernst & Young where she delivered several successful global D&I consulting projects. Jo and her team partner with our clients and enable them to achieve greater traction in moving the diversity dial. Beginning with an end-to-end audit of the current workforce, we enable management to get a clear picture of the current state and baseline in order to measure success and progress. We can also help upskill leaders through delivery of our Inclusion Leadership training programmes. Where external talent is required we introduce talent pipeline initiatives. All these interventions help our clients to accelerate their D&I agenda and gain competitive advantage.

Recently, Green Park has seen a significant increase in demand for our Diversity & Inclusion services, perhaps reflecting that organisations are beginning to see the need for real action and progress.

Shareholders and consumers have demonstrated that equality and diversity matter. And they may be willing to do something about it. It may be a case of who acts first will take the lead?


This article follows on from ‘The Diversity Domino Effect’, an article written by my fellow Co-Founder, Raj Tulsiani, and exploring the growing trend of investor activism. To read ‘The Diversity Domino Effect’ click here.

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