According to the new policy, which was approved by the investment committees of the companies at Psagot Investment House, when examining the composition of the board of directors in 2021, Psagot Investment House will oppose any appointment of a director, on a board of directors with less than 20% women. In 2022 this rate will increase to a threshold requirement of at least 30%. At the end of 3 years of this announcement, the aspiration that female representation on boards of directors will be egalitarian.
According to public figures presented by the Knesset Committee for the Advancement of Women, the rate of public companies in the Tel Aviv 125 index, which has less than 20% women, is 48% – a worrying figure, which indicates that a significant change in gender representation is required in most companies in the index.
Psagot intends to lead the new policy gradually and responsibly, in a manner that will not harm the performance and profitability of the companies, in light of the necessary changes in the composition of the Board of Directors. The knowledge accumulated on the board of directors in any public company is critical for the shareholders and the replacement of its members should be carried out responsibly. Psagot will lead the policy change, while maintaining a dialogue with the companies and creating a long-term commitment on their part.
In addition, already in 2021, in companies whose composition of the board of directors will have a female representation of 40% or more, this will be given positive weight when examining approval and votes on the remuneration in the company. This is in order to encourage companies to reach a higher proportion of women on the board.
The Investment Committees at the Investment House have emphasized that they will examine in their own case special cases in which it will not be possible to implement this policy in the short term, and it will be found that the continued tenure of existing directors is important. In these cases, Psagot will continue a dialogue with the companies, and will approve the composition of the board of directors as the company declares its readiness and written commitment to act to increase female representation on the board in the coming years.
Gat Megiddo Chief Investment Officer at Psagot said: As a leading and influential investment body in the Israeli market, Psagot will begin to lead a necessary change in the capital market, in order to increase the proportion of women on board companies in public companies – based on research based on diversity on the board. The company and due to the importance of gender equality in points of influence in the Israeli economy.
This is a step that has come to correct a long-standing distortion, and we are proud to be the first public asset manager to implement this policy. We believe that within a few years, this move will be considered a benchmark of capital market boards. We call on companies and investment bodies to join and mobilize to raise the proportion of women on boards of directors. “
This move is part of the investment house’s overall policy, to integrate the principles of the ESG (responsible investments in the areas of environment, society and corporate governance) within the framework of its investment policy. About a year and a half ago, Psagot announced a new agreement, under which the investment house undertakes to increase its responsible investments and to integrate ESG issues into its investment policies and analyzes.
As part of this policy, Psagot joined the PRI International Initiative, alongside leading international investment bodies. This is based on the understanding that responsible investments yield better returns over time. The new policy regarding the proportion of women on boards of directors is another step in the implementation of the Convention.