April 11, 2017 / 10:23 AM / 3 years ago

Hermes EOS says investors should oppose re-election of Rio executive

LONDON (Reuters) - Governance advisor Hermes EOS said on Tuesday it recommended investors oppose the re-election of a Rio Tinto (RIO.L)(RIO.AX) executive at this week’s shareholder meeting because it said the firm had not done enough to appoint women to the board.

Hermes, which advises on more than 260 billion pounds in client assets, said investors should vote against the re-appointment of Jan du Plessis as chair of the nominations committee at its London annual general meeting on Wednesday.

The nominations committee evaluates the make up of the board and the skills needed for board candidates.

Hermes is one of several investors demanding boards better reflect diversity in society. It has said it would vote against firms falling short of a government-backed goal to ensure a quarter of directors were women by 2015 and a third by 2020.

“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 percent target” it said.

Du Plessis will retire as Rio chairman no later than the 2018 annual general meeting in Australia.

Hermes, which said it would focus on diversity throughout the AGM season, last year led a shareholder push for further disclosure of what companies are doing to manage exposure to climate-related risk.

Rio published a report in March detailing its greenhouse gas targets until 2020 and the low carbon technologies in which it was investing. Hermes said this did not go far enough.

“Investors are seeking more tangible disclosure of financial risk,” it said, adding they needed estimates of value at risk under various scenarios and Rio’s strategic response.

A Rio spokesman said the company had no comment on the Hermes recommendation.

Reporting by Simon Jessop and Barbara Lewis

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