Good Money Week 2018

Good Money Week- Castlefield Calendar: A Year of Female Empowerment

Good Money Week, now in its 11^th year, takes place between 29^th September - 5^th October 2018. This year, the focus will be on women and financial empowerment. The purpose is to highlight women’s experiences of investment and finance. As far as Castlefield is concerned, this is an excellent choice of theme and provides an opportunity to reflect on the work the company has undertaken on the topic of gender diversity in investment over the last 12 months.

In November 2017, we officially became signatories of the Women in Finance Charter. This HM Treasury initiative is designed to encourage greater numbers of women at senior levels of the financial services sector and, by encouraging firms to agree to the following pledges, it attempts to rectify the “talent gap” and disproportionately large attrition rates for women compared to their male colleagues:

1. Have one member of our senior executive team who is responsible for gender diversity and inclusion.

2. Set internal targets for gender diversity in our senior management.

3. Publish progress annually against these targets in reports on our website.

4. Intend to ensure the pay of the senior executive team is linked to delivery against these internal targets on gender diversity.

To meet these pledges, we have committed to an equal gender split within key managerial roles - we define this as individuals with line manager responsibilities and therefore those who have a say in important personnel and recruitment decisions. Most financial services companies who are signatories of the charter are aiming to have 30% of women into senior management roles over the next five years. However, at Castlefield we are already well ahead of our industry peers, with women accounting for over 63% of our key managers. Whilst the rest of the industry is struggling to correct their gender imbalance we have committed to, at least, maintaining parity and are currently surpassing this goal.

In February 2018, we put together our response to a consultation on the Corporate Governance Code. The Code is fundamental to how listed companies are run. The Financial Reporting Council (the body that oversees the Code) has decided to amend the Code due to increased scrutiny of corporate governance in recent years (not least around executive pay) and because of calls for greater workforce representation and greater diversity on the boards of UK plcs. As part of our response to the consultation we advocated greater reporting on diversity in the workforce and expressed our belief that diversity benefits business and society.

The 8^th of March is International Women’s Day and this year we marked it with a presentation by Nicola Pike and Professor Ser-Huang Poon from the Alliance Manchester Business School. Our guests spoke to a packed Castlefield board room about the progress of women in society and particularly within financial services. Ser-Huang presented her recent paper on the positive impact of gender diversity within the fund management industry and on the boards of businesses.

Throughout the second quarter of 2018, the Castlefield investment management team made corporate governance their top priority due to the high volume of company meetings that occur during this period. Through our investing, Castlefield seeks to engage with investee companies and vote at these meetings when we feel the boards of our investee companies are insufficiently diverse. There’s a growing body of research indicating that companies with no gender diversity at board level underperform against their more diverse peers. As a consequence, we strengthened our existing voting guidelines - which state that we will vote against the Chairperson if a company does not have a diversity policy – to include a review of executive directors.

On the 19^th of June, Castlefield hosted our summer event called “VOTE 100: Gender Diversity and Investment” and the aim was to explore diversity and its role within responsible investment. The main presentation of the evening was delivered by Dr Lara Bianchi from the Alliance Manchester Business School. Lara talked about the transformative power of business in achieving social justice for women workers by rectifying systemic inequalities. She spoke of the various challenges faced by global businesses when managing human rights risks, which are particularly gendered in some industries and regions, and how companies can mitigate those risks.

Following this presentation there was a panel discussion led by Castlefield Financial Adviser, Olivia Bowen. Panellists included Professor Ser-Huang Poon, who is fast becoming a friend of the firm after her appearance at two key events this year. Professor Poon was able to share insights from her academic research. Ser-Huang presented evidence that female corporate leadership is associated with fewer human rights violations (and child labour in particular). She also shared research on US funds, which indicated that there is no difference in performance between male and female managed funds when there is only a single manager. For team managed funds, her evidence suggests that adding women to the team helps to improve the Corporate Social Responsibility quality of the portfolio. It was useful to see the data that supports the idea that increased gender diversity offers benefits both to businesses and investment teams.

Other panellists were Claudia Quiroz, Investment Director at Quilter Cheviot Investment Management, and Ita McMahon, Responsible Investment Analyst at Castlefield Investment Partners. Both were able to share experiences from their careers in the industry. Claudia was also able to offer advice to women selecting a company to work for. She recommended looking at the structure and diversity already present in the firm and, when at interview if there is an all-male selection panel, this can be used as an indicator of the firm’s culture. Ita spoke about the work Castlefield do when engaging with companies and was able to share examples which paint a hopeful picture.

Ita and Claudia felt that, from their experience, the issue of gender diversity could be used to indicate how the company mitigates other risks associated with social issues. This was supported by Ser-Huang’s research which indicates that more gender diverse senior teams are connected to reduced levels of controversy.

Throughout the year, Castlefield had several individuals named as finalists in various investment award schemes. The firm as a whole was announced as a finalist in the “Support Excellence Award” category of the Investment Week Women in Investment Awards because we have supported and facilitated initiatives to improve diversity within the organisation. We were pleased to be recognised for our efforts in this area. In addition, Summayya Mosam and Ewelina Wilson were shortlisted for the awards on an individual basis and three Castlefield co-owners were shortlisted in the “Rising Star” category of the Women in Finance Awards. These awards offer the opportunity to celebrate the achievements of those who are driving the investment sector towards equal representation. Throughout the business we have we have recruited several impressive female candidates over the last few years. We look forward to supporting them throughout their careers by providing the type of working environment that allows diversity to thrive.

We are happy that Good Money Week has presented us with this opportunity to take stock of our achievements over the year. Whilst we are aware that there are still challenges to be faced, we are cautiously optimistic that the recent groundswell within the financial services sector to address concerns over female representation will hopefully serve to make the industry a fairer place to work and Castlefield will continue to lead the way.

Written by Kate Hewitt.