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February 21, 2015
Twenty-Five Resolutions on Board Diversity Filed in 2015
    by Robert Kropp

Institutional investors affiliated with the Thirty Percent Coalition step up their shareowner efforts to pressure corporations to elect women to their boards of directors

Leave the money out of it for a moment, and the movement by the Thirty Percent Coalition to increase diversity on corporate boards of directors can be viewed simply as a basic tenet of social justice. When an overwhelming percentage of corporate overseers are of one race, one gender, and one general age group, is it surprising that environmental degradation and wealth inequality follow?

Short-term accumulation of wealth by individuals fitting the above description may be as profound a crisis as climate change, a crisis amplified by what studies emphasize is a proven sustainable path to shared financial security: gender diversity in corporate boardrooms leads to improved financial performance. "Studies all echo the same principle," stated 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."

The goal of the Coalition is to increase female representation in public company boards to 30% by the end of 2015. “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,” Anne Sheehan of the California State Teachers’ Retirement System (CalSTRS), an active member of the Coalition, said last year.

Yet, 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.

In the face of such lagging improvement, institutional investors aligned with the Coalition have increased their use of the proxy ballot to pressure corporations to evolve. A letter-writing campaign that began with contacting 160 companies in the S&P 500 and Russell 1000 with no women on their boards expanded late last year to representation “by representatives of investors representing $3 trillion in assets under management,” according to the Coalition.

“Approximately 25 Board Diversity Resolutions have been filed for votes at 2015 stockholder meetings,” the Coalition stated recently. “Shareholder proposals this season are asking for a report on the Board's plans to increase diverse representation, as well as an assessment of the effectiveness of these efforts, or adoption of a policy that the board will seek to enhance board diversity beyond current levels to ensure that a wide range of female and minority candidates are included in the pool of candidates nominated.”

Investment management firms involved in the effort include PAX World, Walden Asset Management, Trillium Asset Management, Boston Common Asset Management, and Calvert Asset Management. Institutional investors include Mercy Investment Services, United Methodist Church Foundation, Portico Benefits, and Episcopal Church Pension Fund.

Twenty-five shareowner resolutions have been filed thus far with companies where women on their boards are underrepresented. “Research confirms a strong business case for diversity on corporate boards,” a sample resolution states. “Recognizing the benefits of diversity in corporate leadership and growing interest from institutional investors, investment firms are responding with new products and services.”

“Twenty-one responses have been received from companies contacted and in several cases a positive dialogue has occurred regarding increased gender diversity in the company’s boardroom,” Timothy Smith of Walden Asset Management stated. “Success of the Thirty Percent Coalition’s campaigns has been realized as 17 of the companies contacted have now added women to their boards.”


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