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The ultimation

The Times reports,

FTSE 100 businesses ‘must bring minorities on board’

One of Britain’s biggest institutional investors has told the 30 or more FTSE 100 companies with all-white boards that it will vote against them unless they hire an ethnic-minority director in the next 15 months.

Legal & General, which manages more than £1.2 trillion of assets on behalf of pension funds and other clients, issued the ultimatum in the past few days in the wake of the Black Lives Matter protests over the summer.

L&G has written to all 100 companies in the FTSE 100 as well as the US companies in the S&P 500 telling them it expects them all to have at least one director of black, Asian or other minority ethnic (Bame) origin in place by January 1, 2022.

It told them it will vote against the re-election of the company’s nomination committee chairmen if they fail to meet this target. Nomination committees are the main board panels responsible for board appointments.

L&G, which typically owns 2 or 3 per cent of almost every British blue chip, is thought to be the first big UK institution to warn explicitly it will vote against any company failing to comply.

Does Legal and General as a company have the moral right to invest as it sees fit? Absolutely. But as a commenter called David C says,

I have a pension invested with L&G. I’m taking this as an early indicator the company has fallen into woke hands, which means performance is going to suffer.

David C then spoils a good point by saying that that social diversity matters should be left to government. The L&G plan to “force” racial quotas on those companies in whom it invests by threatening to put its money elsewhere unless they comply with its wishes is preferable to the actual force-with-threat-of-jail as used by governments.

Even so, members of the board of Legal and General should remember three points:

1) They are investees as well as investors. What they do to others can be done to them, with equal legitimacy.

2) L&G say that research by McKinsey & Co shows that “more racially diverse boards make better decisions and produce better financial returns to shareholders.” In itself I can well believe that heterogeneous boards help a company avoid groupthink and hence improve profits. But when a person is hired for their skin colour it is probable – not certain, but probable – that they will not be as competent as a person hired for their competence. I admire L&G for being willing to put this oft-made claim that affirmative action helps the bottom line to very a public test.

3) Isn’t racial discrimination illegal?

I lied when I said three points. Point four is affirmative action never delivers equality. Decades of caste quotas in India and racial quotas in Malaysia have been dandy for a small sub-class of hereditary quota-fillers while entrenching the assumption that the “helped” class could not make it on their own. Point five is that, legal or not, racial discrimination is wrong.

25 comments to The ultimation

  • Agammamon

    Would a mandate of this type not be considered racial discrimination?

  • bobby b

    What a great time to hold a pension managed by L&G.

    They owe you a fiduciary duty to care for your money and increase it – not to increase societal diversity by using your funds as leverage.

    Sue, sue, sue.

    (Unless, of course, management of your specific pension has already voted to work for diversity using your funds, in which case you might be out of luck.)

  • Chester Draws

    For a laugh, go to the board of L&G : https://www.legalandgeneralgroup.com/about-us/our-management/group-board/

    The management are just as white too!

    In case you’re worried, they are just as concerned about climate change.

  • James Strong

    Do you want:

    the electrician who re-wires your house, the mechanic who fixes the brakes on your car, the pilot who flies the plane when you go on holiday, the surgeon who operates on your sick child etc. to have got their jobs based on skin colour or merit?

    Here on UK TV about 30 years ago and then for many years we had a prominent black news reader named Trevor McDonald.

    I never heard anyone comment on his skin colour. Never.

    Recently a prominent, successful and popular sports quiz show presenter, Sue Barker, has not had her contract renewed. Her replacement is rumoured to be a mixed-race former international footballer.

    I have no idea yet if the new presenter will be any good or not. But just before the personnel change was announced the BBC told us that it was going to spend £100 million to increase diversity.

    The new mixed-race female quiz show host will ALWAYS have the doubt hanging over her – did she get the job on merit?

    Is that good for her? No.

    Is it good for any job-holder in any field where such a doubt might exist? No.

  • The new mixed-race female quiz show host will ALWAYS have the doubt hanging over her – did she get the job on merit?

    Good. Because positive discrimination undermines merit and those that might have earned the job on merit are tainted by unspoken accusations of being little more than a token diversity hire. Most jobs are difficult enough without being undermined because of the colour of your skin rather than your ability.

    Equally, useless white tw*ts who don’t get hired will use “diversity hires” as a point of animosity for their own failures. It’s a double whammy for talented ethics, but then again since this sort of stuff is pushed by useless idiots race-baiters like Diane Abbott and David Lammy then this is only to be expected.

    We’ve seen how divisive positive discrimination can be in the US and Europe. Lets not open that can of worms here.

  • Nicholas (Unlicensed Joker) Gray

    How many Nazies will be given positions on boards of big companies? They sure qualify as a persecuted minority! Be sure to tell this also to diversity-loving Hollywood.

  • Paul Marks

    We all know that we should be silent over such matters – if we do not wish to be punished in various ways. But how can one be silent over such evil?

    This is a total rejection of the-best-person-for-the-job, appointment on merit. Instead this is a demand for RACIAL QUOTAS – and quotas based on sex (“there should be more women”) and sexuality (“there should be more Gay people, and Trans people”) and on and on, will follow. A Caste based society – with massive government and vast “Woke” Corporations joined-at-the-hip, and individual freedom utterly crushed.

    Such things have to be opposed in PRINIPLE – but instead there are just arguments over the details of the measures.

  • Marius

    On the L&G board, non-exec Ric Lewis is a black American. He is a talented guy, but a real estate specialist so it is slightly odd* to have him on the board, as L&G doesn’t count its own head of real estate amongst its senior management.

    *Ie obvious tokenism

  • Cesare

    The economic and financial equivalent of Lysenko-ism.

  • JohnM de France

    Although I am a white bloke, I think that I will identify as a black (oops, sorry) Black female with one leg and half-blind.

    Do you think that I will get the job?

  • John B

    Very soon we shall run out of ethnic minorities (clue there) to make up the quota numbers… what then?

    Perhaps a pool of ethnics can be created, with individuals put out on short-term leases so every company can have one for a couple of months each year.

  • Johnathan Pearce

    If there is real damage to investment performance I’d expect investment advisors and trustees to fire L&G if it was seen as trading returns for ideology.

    In recent years there’s been a drive towards Environmental, Social and Governance (ESG) investing. Advocates claim it delivers superior risk-adjusted returns, although I wonder how robust this is.

  • AlfromChgo

    Does this new hire have to read and write the English language? Or perhaps the position can be filled by a??.

  • Fraser Orr

    What is it like for the guy who gets appointed to the board? Let’s say they appoint some black dude. I mean presumably this guy will be well accomplished in his field, having worked hard, studied hard, busted his ass, no doubt overcome some really racial discrimination. Then he gets appointed to the board, and is forever the “token black guy”. I mean how insulting is that to this guy who has busted his ass all his life, who has earned his success, though perhaps not earned that board seat yet? Even if they guy gets on the board entirely on merit, then due to this mandate he will always be “the token black guy” that nobody will ever take seriously. I mean who the hell would want that job? It is deeply patronizing and insulting to black people and other minorities.

  • Where companies yield, the beneficiaries will be very disproportionately the wealthy and privileged amongst the ethnic minorities. It will be far easier to demonstrate benefit to the children of black millionaires than to blacks from poor backgrounds.

    L&G, which typically owns 2 or 3 per cent of almost every British blue chip … will vote against the re-election of the company’s nomination committee chairmen if they fail to meet this target.

    I have attended shareholder meetings of huge companies. As long as the threat is only from 2 or 3 percent of the shares, any company board with a grain of sense will know how effortlessly on the day, let alone before, they can get at least an equivalent 2 or 3 percent of normal investors annoyed enough by this to outvote L&G. If, like many a university administrator, a company wants to be ‘obliged’ to do this then L&G will serve as well as anything else. If not, BLM will need more pressure – which I’m sure the perpetrators of this are seeking to arrange.

  • djc

    I have a small pension with L&G, so small I just this month decided to kick my planned retirement date a few years down the road. Well, you never know it may have recovered a bit of value by then. On this news, time for a rethink, time to take the money and run.

  • Stonyground

    “…who the hell would want that job?”

    Maybe someone who isn’t remotely qualified for the job at all but the correct colour? That person can then pull down a salary that is beyond their wildest dreams and just not worry about being the token ethnic.

  • Stonyground

    I retired just six months ago. Most of my pension plans were with L&G and they seem to have done an excellent job. I moved most of my funds into a drawdown plan once the plans matured. The only one that is still with L&G is a really old one which has a guaranteed annuity. I just hope that my current investor doesn’t decide to jump on this stupid diversity bandwagon.

  • Rob

    Why would an all white board, comprised of whites from all over the world and from different classes, be more prone to ‘groupthink’ than, say, a racially diverse board who all went to Harvard or Yale?

  • Fraser Orr

    Maybe someone who isn’t remotely qualified for the job at all but the correct colour?

    Actually more likely someone with a PhD in “Ethnic Awareness Studies” or “Transphobia and cis-normative bias”, who happens to be the right color. I guess that is worse. Better a token minority that every can pat on the head and ignore, rather than an aggressive activist who pisses all over the profit focus of the company, and tries to use his/her outsized influence to use the company to achieve his political goals. (And of course, in case the speech police are watching, by no means am I saying that all minority board members are like that, we are talking specifically about ones nominated soley to satisfy these sorts of mandates.)

    As I was typing this I realized that I know what “cis-normative” means. I really wish I didn’t, but I guess it is hard to ignore the constant drum beat.

  • Albion's Blue Front Door

    if, as some maintain there are cities in the UK where white people are in the minority, would then merely having whites on the board satisfy the demand?

  • Nicholas (Unlicensed Joker) Gray

    ABFD, I think you mean, ‘having people who self-identify as whites’, don’t you? If you know what is good for you.

  • Okay, boys, we have to finally make this move. Everyone draw a straw, and the short straw has to begin identifying as black.

  • mikee

    Would someone be kind enough to explain to me why the color of one’s skin matters at all for board members of a business? Perhaps demanding at least one member of a specified political party be a board member, as I’ve read the Chinese Communist Party requires, would keep businesses aligned with state interests better than demanding at least one PoC board member per business. And at least being so overtly nepotistic and corrupt would demonstrate that totalitarianism is the goal, rather than faux skin-color-based “diversity.”

  • James Hargrave

    Cis-normative? A cissy called Norman?