Fund manager Hermes EOS is expected to vote against the reappointment of Rio Tinto’s board chairman Jan du Plessis as chair of the company’s nominations committee, because of the lack of diversity among the mining firm’s executives and non-executive directors.
Hermes served notice on listed companies this week that it was set to take a tougher stance on diversity and executive pay, as reported in The Telegraph, written by Hans Christoph Hirt, the fund manager’s co-head of governance.
The investment manager is set to put that new stance into action today at the Rio Tinto AGM, because only two members of the company’s board are women.
A statement from Bruce Duguid, a director at Hermes EOS, said: “Due to the lack of diversity and a credible plan to address this imperative issue, and consistent with our voting policy, Hermes EOS recommends voting against the re-election of Jan du Plessis in his capacity as chair of the nominations committee.”
Hermes wrote to members of the FTSE 350 earlier this year noting that they expect boards to be 25% female, according to a 2015 target, and 33% female by 2020.
Duguid added: “Following changes to the board earlier this year, including the appointment of three male non-executive directors, only two out of the 12 Rio Tinto board directors are women, which falls significantly short of the 25% target.
“Although the company has stated its commitment to diversity and to seeking to ensure better gender balance in future appointments to the board, we believe Rio Tinto must demonstrate a credible plan and a serious commitment to reaching the 33% target by 2020.”