where checking accounts rebuild communities
Back to homepageInstitutional ReportsSRI Financial Professionals DirectoryToolsNewsSRI Performance and TrendsAbout Us   

October 23, 2014
Investor Campaign for Board Diversity Heats Up
    by Robert Kropp

Institutional investors representing more than $3 trillion in assets under management join with women's organizations to call for gender diversity on the boards of Russell 1000 companies.

The goal of the Thirty Percent Coalition, launched in 2011, is straightforward: to ensure that women hold 30% of seats on corporate boards by the end of 2015.

Results thus far are discouraging, however, despite the fact that numerous studies indicate improved corporate governance when the boards of public companies are more diverse. In 2013, women held 16.9% of board seats of Fortune 500 companies, virtually unchanged since the previous year. And in the broader Russell 1000, women hold only 13% of board seats.

“Corporate boards should reflect the diversity of the communities in which they operate and from which they profit,” said California State Treasurer Bill Lockyer. “If boards become more inclusive and increase the proportion of women directors, they will better serve the interests of their customers and shareholders.”

The membership of the Thirty Percent Coalition includes sustainable institutional investors representing more than $3 trillion in assets under management, and an initiative led by the California State Teachers’ Retirement System (CalSTRS) has written to 100 companies listed in the Russell 1000 that do not have women on their boards.

“Companies that embrace gender diversity are better-governed, better-managed and have better long-term growth prospects,” the letter states. “This is a win-win proposition for both companies and their shareholders.”

Referencing a recent analysis of 2,800 companies by the InterOrganization Network (ION) that found nearly 1,000 had no women at all on their boards, the letter continues, “We must do better. We are asking companies to work with us to bring these numbers from where they are today - with women holding somewhere from 12 to 16 percent of corporate board seats - to a national average of 30 percent by the end of 2015.”

“This latest initiative more than doubled the assets under management represented in our last letter-writing campaign and added an additional 27 new investors as signatories to the letter,” Charlotte Laurent-Ottomane, executive director of The Thirty Percent Coalition, observed.

According to CalSTRS, institutional investors aligned with the Coalition have engaged with a number of public companies on the issue of board diversity, and 17 of the companies responded by appointing women to their boards. Earlier this year, Trillium Asset Management withdrew 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.”

“We believe that diversity of age, ethnicity, culture, experience and education enrich the effectiveness and efficiency of boards, CalSTRS Corporate Governance Director Anne Sheehan said. “Nevertheless, in a world where women are growing drivers of the financial and consumer sectors, and are among the best educated in society, it seems only right to increase their presence in the boardroom.”

“The lack of meaningful diversity in corporate boardrooms is a real concern for shareowners,” said New York City Comptroller Scott Stringer. “We are committed to accelerating the glacial pace of change at our portfolio companies which lack diversity.”

The letter points out that a number of nations have passed laws mandating corporate board diversity; also, in 2009, the Securities and Exchange Commission (SEC) enacted a disclosure rule that “specifically asks that nominating committees disclose how diversity is considered when the board is identifying nominees for directors.”


| Reports | SRI Financial Professionals Directory | Tools | News | SRI Performance and Trends | About Us | Contact
© SRI World Group, Inc. - All rights reserved
Terms of use - Privacy Policy - OneReportTM Network