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March 19, 2014
Trillium Withdraws Diversity Proposal at Wabtec
    by Robert Kropp

The resolution, which called for a policy emphasizing board diversity at the locomotive and train car components manufacturer, is one of a number withdrawn by Trillium this proxy season.


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

Yet according to the Thirty Percent Coalition, women hold only about 15% of the seats on corporate boards. For financial, social, and governance reasons, the issue has been an important one for sustainable investors; institutional investors representing over $1.2 trillion in assets under management have written letters to 168 companies, urging them to prioritize gender diversity on their boards.

While the goal of the Coalition—that 30% of board seats be held by women by the end of 2015—has yet to be realized, there has been progress since investors prioritized the issue. One more step forward was recorded by Trillium Asset Management this month, when the firm announced it has withdrawn a resolution at Wabtec requesting that the locomotive and train car components manufacturer “publicly commit itself to a policy of Board inclusiveness to ensure that women and minority candidates are routinely sought as part of every Board search the company undertakes.”

When Trillium filed the resolution, “Wabtec had no woman on its board of directors and did not disclose that diversity, inclusive of gender or race, was part of its board nominee search process,” the firm stated. As a result of Trillium's engagement, Wabtec committed to “ensuring that the Board of Directors consists of individuals from diverse backgrounds (including diversity of gender, race and ethnicity) and experience who, collectively, provide meaningful counsel to management. In order to achieve this goal the Committee will actively seek and consider diverse candidates, inclusive of gender, race and ethnicity.”

“We commend the company for engaging in productive dialogues with shareholders, including Trillium and the Pennsylvania State Treasurer’s Office, along with The Thirty Percent Coalition, which resulted in meaningful revisions to its corporate governance documents,” said Susan Baker of Trillium. “Like many companies in the industrial sector, Wabtec has sought skilled board members through traditional talent circles which often do not include women. In addition to revising its corporate charter documents we are gratified that the board is closely examining its governance practices and taking important steps to broaden its board nominee search process.”

The withdrawal of the resolution at Wabtec is not the only example of successful engagement recorded by Trillium this proxy season. Proposals relating to reducing greenhouse gas (GHG) emissions were withdrawn at Valmont Industries and Church & Dwight.

Also, a resolution filed at Verizon by a coalition of investors including Trillium was withdrawn after the telecommunications firm agreed to report on government and law enforcement requests for confidential customer data.

The investors stated “that while they would have preferred that Verizon’s initial report provide information regarding the company’s rate of compliance with government requests, they are pleased that the company agreed to do so in the future and has subscribed to the need for this information.”

The resolution at Verizon was filed in the aftermath of increasing public concern over government surveillance porgrams.

 

 
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