Gender Linked Loans, What is Next?
Who will be the first member of the leadership team to step aside?
Norton Rose Fulbright took to the airwaves the other week to announce their participation in the recent $200M loan to Navigator Gas, linked to ‘sustainability’ and ‘gender’ diversity. We only had to wonder, did the deal-team get to bill more hours for such a noble cause…?
Let us start with the obvious factors. Here is the management team of Navigator Gas.
Here is the deal team from NRF. Although they did announce that a female was in a trainee position for the transaction.
If gender diversity is the aim, should the loan documents require one of these gentleman to step down from their post and promote a female into the position? You could say, well there are limited candidates available with the experience and know how. In reviewing the management team of the gas companies, this may be an accurate statement. Golar - No, Seapeak - No, Excelerate Energy - Yes (CFO), CoolCo - No (GC - Yes), Flex LNG - No, Awilco LNG - No, Dynagas - No, GasLog - No, Dorian LPG - No, and so on…
Nevertheless, New Fortress Energy - No is empowering woman as well as powering the Caribbean!
Vice President of Permitting, an investment associate, and a human resources manager. Not exactly senior management. But hey, it is on the website!
Ironically, the maritime industry stacks up pretty well verse other industries at CEO. Lois Zabrocky has done a nice job steering INSW and there is the industry titan, or should we say shark, from Navios - Angeliki Frangou. It has been rumored that Angeliki adorns her office with the scalps of the many male industry competitors and investors she has surpassed. Needless to say, these ladies didn’t need an interest rate gender equality bump to get where they are today.
There are also industry females who are stretched thin helping Boards meet their gender and equality quotas. Randee Day, the perpetual Board member whos most significant industry accolades were decades ago has been on the Board of TBS International, Tidewater, DHT Maritime, Ocean Rig, Excel Maritime, Eagle Bulk, and INSW!
Joining her on Eagle Bulk’s Board this year is Kate Blankenship. Ms. Blankenship has been on the Board of most of Fredriksen’s Companies and others including Golden Ocean, Frontline, Avance Gas, Golar, Seadrill and is currently also on the INSW Board with Ms. Day, as well as 2020 Bulkers and Borr Drilling.
If you can be a professional female Board member, why would you stress yourself out working day in day out in management?!
By adding diversity of gender these Companies give up diversity of thought given the significant overlap between Companies
So there is a goal to increase the percentage of women in executive leadership positions which will be addressed by potential interest savings by Navigator Gas. But is there a better way to meet this goal or target? Since we have also identified a potential lack of qualified or interested candidates, it seems this should be the area to address.
Should those interest savings be used to create scholarships or training programs for female executives from other fields? One could train females from other industries to join the maritime / energy field.
Maryse Malicet, the CFO of Moet Hennessy under the LVMH brand may be a potential target.
Caller: Maryse, hi, I am the gender promotion czar at Norton Rose.
Maryse: Bonjour, how can I help you.
Caller: We are creating a female executive training program for the maritime industry. For this program, you will spend one month at sea on a merchant vessel, one month at the facility outside Houston, Texas working in the ethylene plant with the construction and engineering teams. It is on the Houston ship channel, very lovely. Then a month in our satellite office in Manila before heading to London and Scandinavia for winter.
Maryse: That sounds interesting but I currently live in Paris and am headed to the vineyard for a champagne event this weekend. Andre Bocelli is performing and we are launching a new Tiffany line.
Caller: That does sound quite lovely, do you have extra tickets? Are you hiring?
Our proposal is the following. Companies pursue the most competitive bank financing available that they can negotiate.
Banks underwrite these loans based on risk and performance metrics to protect and augment the security and risk adjusted returns on that capital.
Companies in return hire the most qualified and interested candidates to their Companies which will drive returns and productivity.
Another part of the Navigator Gas loan is to improve sustainability metrics, the environmental performance of the fleet. Does Navigator save on interest if their off-hire days go up!? For each day the fleet sits at anchor, you get a rebate!
We joke, but some of this does feel a bit like green washing or projecting. It does not address the fact, for example, that because of an inability or lack of desire to end the conflict in Ukraine, Navigator is shipping ammonia across the world for fertilizer. It does not address the fact that petrochemicals are shipped from Houston, Texas to China, used in manufacturing and other processes to create goods which are then shipped back to America and Europe.
Should the loan savings be used to set up supply chains that are more sustainable?
What if the women are from a country identified as ‘developing’? Surely this would be better. What about race or sexual orientation?
With such a large focus on gender equality in leadership, we do not see or hear of much focus on diversifying across nationality or race. Filipinos make up a large percentage of international seafarers, yet they are significantly under represented in management compared to women. Indian nationals also have a strong legacy in the maritime industry, with many firms creating back-office and operation offices in India.
However, we do not see much effort or push to include these individuals in corporate management or Board positions. It is not lost on us that the extreme majority of sea-farers, dock works, ship agents, etc. are men.
As a whole, the industry should reject agendas to transition companies into social change agents. Incentives against core business aims should be rejected. Increasing the number of females in executive positions may improve the Company, but it also may not, it would depend on the candidate and their skillset.