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April 10, 2013
Financial Firms Agree to Disclose Diversity Information
    by Robert Kropp

The New York City Pension Funds have reached agreement with three financial companies that will make public their EEO-1 data on diversity.

New York City Comptroller John Liu and the New York City Pension Funds announced this week that they have withdrawn shareowner resolutions at three companies after the firms agreed to make public their workforce demographics across major job categories, including senior management.

Federal law requires companies with 100 or more employees to submit an Employer Information EEO-1 survey on an annual basis. The survey provides federal agencies with demographic information on race, gender, and job categories. In response to the shareowner engagement of Liu and the Pension Funds, the three companies have agree to publicize the information disclosed in the survey.

That the three companies—AIG, BNY Mellon, and US Bancorp—are financial institutions makes the news all the more compelling, as the financial industry is notorious for its lack of diversity, especially in senior management positions.

A Credit Suisse report from last year found that since the financial crisis, companies with women on their boards of directors have outperformed their peers on share price performance, return on equity, leverage, and valuation.

"Diversity is good for the bottom line, but without meaningful disclosure there is no way for shareowners to evaluate the effectiveness of a company's efforts to recruit and promote women and minorities," Comptroller Liu said.

Institutional investors such as the Pension Funds have collaborated with the Thirty Percent Coalition to introduce resolutions addressing diversity with more than 20 companies with no women on their boards. In response to Liu's announcement, Charlotte Laurent-Ottomane of the Coalition said, "Even though the statistics remain dismal, we are encouraged by the progress and the willingness of corporate leadership to address the important issues of workforce and board diversity."

The Pension Funds have also filed shareowner resolutions requesting publication of EEO-1 data with Omnicom and Interpublic. The companies are in advertising industry, which, like the financial industry, "is characterized by wide and pervasive employment disparities," according to the Pension Funds. The resolutions will be voted on at the companies' annual general meetings later this spring.

Shareowner resolutions have also been filed by the Pension Funds with CF Industries and Freeport-McMoRan Copper & Gold, requesting that the companies widen the pool of potential candidates for positions on their boards.


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