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March 08, 2013
Calvert Updates Report on Corporate Gender Diversity
    by Robert Kropp

The updated Examining the Cracks in the Ceiling report finds modest gains in gender diversity among S&P 100 companies but persistent underrepresentation of women in senior management positions.

March 8th is International Women's Day. It was on this date in 2009 that agencies of the United Nations published the Women's Empowerment Principles, "a set of considerations to help the private sector focus on key elements integral to promoting gender equality in the workplace, marketplace and community."

Gender diversity in corporate boardrooms leads to improved financial performance. "Studies all echo the same principle," states a 2010 report by Corporate Women Directors International (CWDI). "The greater the percentage of women on boards and in senior management, the better the company's financial performance."

Calvert Investments has published Examining the Cracks in the Ceiling: A Survey of Corporate Diversity Practices of the S&P 100, an update of its 2010 report assessing the performance of the nation's largest companies through ten diversity criteria. "Some progress has been achieved," the report announces. "However, these large-capitalization companies are failing to translate these progressive practices into increased promotion rates for their women and minority employees."

Women are now hired at S&P 100 companies as often as are men, the report found, and since 2010 30 companies have added at least one woman to their boards. The overall percentage of women serving on the boards of S&P 100 companies has increased slightly since 2010, to 19%. Furthermore, the number of companies engaged in outreach to increase hiring of women and minorities increased significantly since the 2010 report, from 74 to 90.

However, the representation of women in management positions "decreases with each step up the corporate ladder," according to Calvert. "Well over half (56%) of S&P 100 companies have no women or minorities in their highest-paid senior executive positions." Overall, women represent only eight percent of the highest paid management positions at S&P 100 companies.

The S&P 100 companies ranked highest by Calvert for their gender diversity efforts are Citigroup, Merck, Coca–Cola, and JPMorgan Chase. The worst performers are Berkshire Hathaway; Simon Property Group, National Oilwell Varco, Ebay, and Apache Corp.

"Leading companies… establish best-practice standards for inclusion strategies through robust programs and policies that support and develop employees from various backgrounds and lifestyles," the report states. "Furthermore, these companies have not limited diversity initiatives to a particular segment of operations; rather, they view these efforts as integral to overall corporate success."

To further best practices in gender diversity policies and to encourage robust disclosure, Calvert has included model language in the report to provide guidance to companies as to what issues are of greatest concern to investors.

"Absent a real push to put more women on boards and into executive suites, the progress on diversity will end up falling far short of what needs to be done to achieve meaningful and lasting changes in corporate America," Barbara Krumsiek of Calvert said. "The bottom line here is very simple: Not only is this the right thing to do in terms of women and minorities, but it can also mean better returns for investors."

In 2012, institutional investors representing over $1.2 trillion in assets under management sent letters to S&P 500 and Russell 1000 companies that do not have women on their boards. The investors have followed up on the letters by submitting shareowner resolutions with 20 companies this year, calling on them "to adopt charter language supporting board diversity and institute a practice of including women and minority candidates on their boards."

Calvert's shareowner resolutions on the issue state, "In an increasingly complex global marketplace, the ability to draw on a wide range of viewpoints, backgrounds, skills, and experience is critical to a company's success."


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