Business & Investment

The AGM season is a time when individual investors focus on diversity

Many consider gender and equity to be at the core of a global company’s ability to assess both risk and opportunity. Unlike the previous AGM cycle, this time the war in Ukraine continues, triggered by a pandemic. Both need to be reassessed in priority. The business that is essential to FTSE’s board of directors diversity seems to be a measure of a company’s ability to survive this current set of crises.

A recent Harvard Law School publication said, “ESG is arguably the mainstream lens for investors to see and evaluate companies. AGM is a platform for shareholders to focus on key ESG issues. Well established. Of the board and the general public

To clarify the importance of business indicators to include in the boardroom, the FCA recently announced new rules that require listed companies to report diversity at the board and executive levels.

Public enumeration and reporting are very important contributors to changing meeting rooms. 30% clubs have demonstrated excellent leadership in this area. In 2019, just 10 years after the launch of the 30% club, one-third of the FTSE 350’s board was filled with women. By May 2022, almost all FTSE 100 companies have appointed at least one undervalued individual to the board of directors.

Unfortunately, every time I take a step forward, there seems to be a setback somewhere else. Just last month in California, a state-based company mandated at least one woman by 2019 and two and three women on a larger board by 2022, a woman in 2018. The board law has been withdrawn as unconstitutional. The silver backing is that it had already had a positive impact before the law was withdrawn. Overall, 31% of board seats were occupied by women in 2021, more than double that of 2018, according to the New York Times.

Retreating in times of crisis is nothing new, and it looks like you’re moving from crisis to crisis, so it’s important not to lose sight of your long-term goals in the face of an imminent recession.

Opinions are divided on the best approach to include in the board and c-suite, but the business case was created a while back.

In my view as a venture capitalist, the opportunity to see the actual progress in the number of women and other underrepresented groups on the board occurs much earlier in the company’s life cycle-and it’s a big intention. Occurs with. The expression of the founder’s gender and race is directly translated into the composition of the board and c-suite, and equally into the innovation that better represents society as a whole.

Unfortunately, the numbers of women and people of color worsen in the early stages. In 2021, VC invested only 2% in a company with a female CEO. We can argue at the end what percentage it should be, but I think everyone can agree that it’s not 2%.

What did I mean when I said it happened with great intent?

The basic process of venture capital relies on very barriers that prevent us from investing in people who don’t look like us. We employ homogeneity because we rely on networks to procure and value investment opportunities and believe that companies can move faster and faster. And unfortunately, our industry is still too white and too male, with white men dominating an estimated 93% of venture capital dollars.

Believe it or not, my industry can even overcome these statistical problems. But it requires real intent.

You can count by starting with the lessons learned from the open market example above.

Count the number of companies in your portfolio, including women in a fair and influential position. Count the percentage of companies owned by these women and the number of seats she occupies in the C Suite and meeting rooms.

As an investor, we have an agency that chooses the methods and processes we use to build our portfolio. You can check the composition of the company you are considering. And we can measure inclusion as an important indicator that benefits us as an investor. As stated in the Harvard Business Review, the data show that “diversity significantly impacts the financial performance of indicators such as profitable investments and overall fund returns at the individual portfolio company level. To improve. ”

This AGM season focuses on ESG and is also an opportunity to look at the private and innovation markets. It’s only a matter of time before limited partners, entrepreneurs, innovators, and the stakeholders they serve, expect the same portfolio to be required of public companies.

Sharon Vosmek is the CEO of Astia, a venture capital fund that invests in women-led companies.

The AGM season is a time when individual investors focus on diversity The AGM season is a time when individual investors focus on diversity

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