Instead of waiting for harassment cases to surface on their own, two American pension funds are now actively urging asset managers to disclose their company histories of sexual harassment cases and settlements, according to a news report.
In a Financial Times article headlined "Pension funds lead charge to expose Wall St sexual offences", the paper reported that Californian public pension funds Calpers and Lacera, with USD 355 billion and USD 56 billion in assets under management respectively, were taking action.
Both funds are calling on asset managers to reveal whether they have had cases of sexual harassment or misconduct, and Calpers has in its updated investment policy explicitly stated that it is urging companies to recoup executives' pay if they are guilty of such behavior.
Andrew Borowiec, executive director of the Investment Management Due Diligence Association tells the Financial Times that the pension funds' new strategy is to avoid the business risk that may occur in connection with cases of sexual harassment, and that one portfolio manager was fired for sexual harassment.
The paper cites an example of the American Fidelity Investments, which was hit last year by the most high-profile harassment incidents in the US asset management industry. The company fired one of its star portfolio managers who allegedly sexually harassed a junior female employee. Following the incident, other portfolio managers left the company for a range of alleged inappropriate behavior, from sexual harassment to bullying.
Meanwhile, the two pension funds are the only ones setting the path, says Financial Times, referring to a survey from February this year. It found that only 11 percent of the investors specifically inquire about sexual harassment when evaluating asset managers' operations.
English Edit: Lisa Castey Hall Nielsen