ABERDEEN Asset Management’s corporate governance head Paul Lee has been forced to defend the fund management house’s own corporate governance standards while appearing before the Business, Energy and Industrial Strategy Committee.
Asked by Conservative member Richard Fuller whether the asset management industry is an “old boys’ club” with negligible female representation on its boards, Mr Lee said he did not believe it was and “certainly not at Aberdeen”.
However, committee chair Iain Wright, the Labour MP for Hartlepool, pointed out that of the 12 directors on Aberdeen’s own board there are nine male executives and three female non-executives.
“That’s good in the fund management industry?” Mr Wright questioned.
Referring to the departure of chief investment officer Anne Richards to M&G Investments, where she is now chief executive, Mr Lee said that it is “well known that we lost our female CIO last year”.
While he added that gender diversity is “very much an issue that is in the front and centre of people’s minds within the organisation”, Mr Fuller said the committee was tired of hearing companies paying lip service to the issue.
“We’re a bit fed up hearing that the issue is at the forefront of people’s minds but nothing seems to change,” he said.
“It seems perverse to me that we should pay lots of attention to directors to make sure boards of directors represent the population and draw on all their talents and then not have the same vigorous approach to the asset management industry, who are the people who are ultimately shareholders in those companies.”
The comments came during a session in which Mr Lee also disagreed with his fellow witnesses over whether UK companies are facing a corporate governance crisis in relation to directors’ duties.
Mr Lee said he does “not believe there is a crisis” based on the talks he has with the boards of UK companies on a daily basis.
“What I hear from them is that they are carrying forward their duties to protect the success of their companies and the interests of all their stakeholders and that they think about long-term issues, as they should,” he said.
However, Sarah Wilson of proxy voting agency Manifest said that “a lot of boards have tin ears” when it comes to identifying governance issues while Kerrie Waring, executive director of International Corporate Governance Network, said the case of Sports Direct highlights that “there is a problem”.
“Why has Sports Direct not been held to account for the treatment of their employees?” she asked.
Mr Lee noted that in the case of Sports Direct Aberdeen had chosen to go public with its concerns about how chief executive and founder Mike Ashley was running the business, but said that in many cases shareholders’ influence is limited.
“We need to be careful that we don’t go too far,” he said.
“Sports Direct is a very unusual company in the UK because it has a majority shareholder who is also an executive director of the company.
“The limits on us as minority shareholders are very significant.”
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