ProxyPreview 2020

corporatecounsel EXCERPT

BOARD GOVERNANCE

Board Diversity Outcomes

Diversity on the Board 60 Shareholder proponents remain keenly interested in making the corporate boardroom more diverse—for reasons of both equity and performance. Almost all these resolutions get withdrawn after companies agree

to change their board nominee procedures (graph right). Last year, proponents withdrew fully 40 out of the 44 resolutions filed on the subject after agreements. More of the same will occur in 2020. To date, we have identified 49 proposals and a few more may emerge; 27 are not yet public. New this year are resolutions specifically seeking more diversity for CEOs. This is in addition to last year’s shift to seek diversity beyond simply gender, race and ethnicity—with attributes such as age, gender identity, gender expression and sexual orientation.

The 30 Percent Coalition continues to coordinate resolutions and work in other ways to diversify boards. The coalition’s members include senior business executives, civil society groups, institutional investors, corporate governance experts and board members themselves. The proposals ask companies to add more diversity to the board room and report on how they manage this process. Since most of the very largest companies have made some commitment to more diversity, companies further down the revenue ranks are coming under scrutiny. Since 2010, proponents have filed about 280 proposals, withdrawing nearly three-quarters after companies have made their policies more inclusive, at least on paper. Proponents are most likely to file proposals at companies with no women or people of color on the board, but increasingly they are not satisfied with a token few and seek expanded representation even where there one or two diverse board members.

Ori Art

The full reportpdfarrrow

...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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