The Thirty Percent Coalition Commends 38 New Companies Adding Women to their Boards of Directors during the 2018 “Adopt a Company” Campaign

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Press Release– Fort Washington, PA – July 17, 2018

 189 Companies Appointed Woman to Boards since Campaign Launched in 2012

Representing $3.5 trillion in assets under management, the institutional investor members of the Thirty Percent Coalition continue to collaboratively promote diversity in the US corporate boardroom. With the addition of 38 companies adding a woman to their board during the past proxy season, 189 companies have now appointed a woman to their boards—most for the first time—since the “Adopt a Company” Campaign launched in 2012.

Additionally, for the first time, this year the Coalition outreach included companies with one woman on their board, encouraging them to appoint a second. During the Campaign, 26 companies added a second female to their board of directors.

Institutional Investors involved in the Adopt a Company Campaign have actively engaged with more than 230 companies during the recent proxy season. The focus of the discussions has been on disclosure and transparency related to their boards of directors.

This disclosure includes a public commitment to gender and racial/ethnic diversity and to including women and minority candidates in the board selection process, a form of the “Rooney Rule”1. Investors believe they can make better investment decisions with increased disclosure. The company’s commitment to embracing diversity and incorporating the “Rooney Rule” 1 most often leads to the appointment of a female board director. This pledge is critical to investors advocating for increased gender diversity in the corporate boardroom. Following the investors’ engagements, 34 companies publicly disclosed that they are using the “Rooney Rule”1 in their director searches.

Contributing to these overall increases, Coalition members  California State Teachers' Retirement System (CalSTRS)Office of the New York City Comptroller, and UAW Retiree Medical Benefits Trust (Michigan) helped to change the boardroom conversation on board diversity through their engagement initiatives with publicly listed companies.

Institutional Investors work to collaboratively achieve results through engagement with their portfolio companies. Oftentimes a shareholder resolution/proposal is filed to facilitate this engagement. This past proxy season, 35 proposals were filed urging action and disclosure on board diversity. Due to investors’ engagement and negotiating mutually agreeable outcomes with companies prior to their annual meetings, 31 of the proposals were withdrawn. When resolutions did go to a vote, there was significant response by investors with some of the proposals passing with a majority vote.

Research has shown a high correlation between a diverse board and superior company performance. In response, the Thirty Percent Coalition has issued a “Call to Action” for companies, regulators, and investors across the US:

To Companies:

  • Be proactive and strengthen Nominating and Corporate Governance policies by embedding a commitment to diversity inclusive of gender and race/ethnicity within the Nominating and Governance Charter and/or Corporate Governance Principles
  • Include women and minorities in candidate pools for selecting board nominees and senior corporate leaders—also described as the “Rooney Rule”1.
  • Disclose board skills and attributes including gender and race/ethnicity in proxy statements along the lines requested by the New York City Comptroller in the Boardroom Accountability Project 2.0 initiative

To Regulators:

  • Reinforce disclosure requirements on board diversity and composition for publicly listed companies.
  • Clarify definition of diversity to include gender and race/ethnicity
  • To Investors
    Examine voting policies to ensure they are supporting board diversity If the company engagement is unsuccessful, consider voting against the total Board or Nominating Committee members if there is inadequate movement on improving board diversity composition

The Thirty Percent Coalition’s investor members combined influence continues to have a positive impact on increasing corporate board diversity. said Mary Hartman Morris, Investment Officer at CalSTRS and co-chair of the Thirty Percent Coalition’s Institutional Investor Committee.We’re buoyed by the recognition of both the 38 new companies adding a woman to their board and the addition of a second woman to 26 corporate boards. These 64 companies clearly understand that board diversity is not a social issue, but is about improving their companies’ performance and enhancing their long-term sustainable value. Morris continued.

We commend the companies who changed their board diversity policies and composition in response to investors and other stakeholders. Making these changes is a wise business decision as well as being the right thing to do. Increasingly, investors are privately urging boards to diversify, while others are publicly voting against board members of companies with inadequate diversity. said Tim Smith, Senior Vice President at the Boston-based investment firm Walden Asset Management and co-chair of the Thirty Percent Coalition’s Institutional Investor Committee.


1 Rooney Rule named after Dan Rooney, the former owner of the Pittsburgh Steelers and former chairman of the league’s diversity committee. The rule is based on a National Football League policy that requires league teams to interview ethnic-minority candidates. Request is for each company to commit to include women and underrepresented minority candidates in every pool from which Board nominees are chosen and to state this in their Board Refreshment Policies and/or Nominating and Corporate Governance Charter.

 

...we find that banks with more gender diversity on their board perform better once the composition of these boards reaches a critical level of gender diversity, corresponding to a board female share of around 13-17 percent.

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