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HESTA chief backpedals on IFM sexual harassment suit

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The chief of HESTA, one of the industry funds that own IFM Investors, has said her fund would not retain its prior silence on the investment manager’s 2018 sexual harassment lawsuit, should it face a similar saga again.

Liberal MP Tim Wilson has again made reference to a lawsuit involving former London-based IFM executive director Frederic Michel-Verdier, who was accused of sexually harassing infrastructure analyst Nathalie Abildgaard. 

IFM settled the suit for $493,000 and Mr Michel-Verdier departed the group in August last year. 

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HESTA chief executive Debby Blakey told the House of Representatives standing committee on economics on Friday that at the time of the lawsuit, her fund had heavily engaged with IFM’s leadership – but it had chosen to not speak publicly on the matter. 

As at June, HESTA held a 17 per cent holding in Industry Super Holdings, valued at $17 million. The fund is one of 27 industry superannuation funds that own Industry Super Holdings, which in turn owns investment manager IFM Investors. 

IFM also manages investments for its industry super fund owners, which comprises part of its total $163 billion it manages, according to recent Thinking Ahead Institute research. 

Mr Wilson, who chairs the committee, spoke on how HESTA, among other industry super funds, had been openly critical of AMP’s recent sexual harassment affair involving AMP Capital executive Boe Pahari, despite the fund declining to comment to media during the IFM saga.

“We were very active in terms of engagement with IFM, both at the board and management level, about those matters, but at the time we chose not to comment publicly,” Ms Blakey said. 

“I’m happy to say, with the benefit of hindsight, if we were faced with that situation again, we would be prepared to publicly comment.”

Mr Wilson asked what the fund would comment on IFM. 

“Well we have a very strong view that in terms of diversity and inclusion, that sexual harassment should not be tolerated in any way,” Ms Blakey said.

“We’ve been very clear on that public view. And part of that public view I think is the clarity that it brings on our position, on these issues and our purpose, on visible gender diversity, but also very much on inclusive culture and inclusive practices and organisations.”

Later in the proceedings, she noted research that showed better gender diversity in the higher ranks of companies correlated with better long-term performance – an important consideration for investors. 

“Based on that research, based on our view that appropriate culture and how gender diversity can feed an appropriate and inclusive culture, we believe this is a financial risk,” Ms Blakely said. 

“The recent AMP example was a strong one where issues materialised regarding gender diversity, regarding an inclusive culture, regarding a healthy culture. I think companies that have good gender diversity at board and management levels would navigate those better.”

At the committee’s last proceedings in early November, Mr Wilson questioned IFM CEO David Neal on the lawsuit and how the firm had allegedly paid bonuses to Mr Michel-Verdier worth $36 million (£20 million). 

Like his predecessor, former IFM chief Brett Himbury, Mr Neal remained tight-lipped on the matter of executive pay, but revealed Mr Michel-Verdier had left the firm for reasons unrelated to the sexual harassment allegations, to “pursue his own business interests”. 

IFM has faced scrutiny from other politicians around its executive remuneration, with superannuation assistant minister, senator Jane Hume, condemning the investment manager in February following reports it paid out a $12.7 million bonus to an unnamed director.

 

HESTA chief backpedals on IFM sexual harassment suit
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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