Push for Increased Gender Diversity in the Boardroom

thirty percent coalitionThe Thirty Percent Coalition’s Institutional Investors continued their active “Adopt a Company” campaign following a series of letters sent to approximately 160 companies in the S&P 500 and Russell 1000 with no women on their boards. The third letter writing campaign to increase gender diversity in the boardroom in the fall of 2014 was supported by representatives of investors representing $3 trillion in assets under management, signed by pensions, state officials, mutual funds, investment managers, foundations, religious institutions, and women’s organizations across the US. 

To date, 21 responses have been received from companies that received the third letter and include:

  • Alliance Data
  • Brandywine Realty Trust
  • CF Industries
  • City National
  • Fortinet
  • Gentex
  • Garmin
  • The HollyFrontier Corporation
  • Intrepid Potash
  • IPG Photonics
  • Monster Beverages
  • Navistar
  • NVR
  • Patterson-UTI Energy, Inc
  • Roper Industries
  • SBA Communications
  • SL Green Realty Corp
  • Stericycle
  • Superior Energy Services
  • Unit Corporation
  • Whiting Petroleum

Investor influence has been expressed through letters, dialogue with companies, and shareholder resolutions by institutional shareholders. In past years, many companies agreed to amend their nominating committee charters and process for seeking new directors. Success of the Thirty Percent Coalition’s campaigns has been realized as 17 of the companies contacted have now added women to their boards.

Approximately 25 Board Diversity Resolutions have been filed for votes at 2015 stockholder meetings. 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.

Investors argue that inclusive language in governance documents signals a commitment to board diversity and many companies have institutionalized such a commitment in response to shareholder engagement. However, investors want to understand how Boards are changing their board composition after making revisions in governance guidelines. Many resolutions have been withdrawn in the last two years as a result of agreements.

In addition, New York City pension funds have led and filed groundbreaking shareholder resolutions seeking “Access to the Proxy” or the ability for an investor to nominate Board members for election. NYC filed this specific resolution with 24 companies that had little or no diversity on their boards. Specifically, focus companies had either no women on their board or one woman and little apparent additional racial or ethnic diversity. A sample board diversity resolution is included below.

The Sponsors of the Resolutions include:

I -State and City Pension Funds – New York State Common Retirement Fund, State of Connecticut, CalSTRS, City of New York and City of Philadelphia.
II -Investment Management Firms – PAX World, Walden Asset Management, Trillium Asset Management, Boston Common Asset Management, and Calvert Asset Management, among others.
III -Investors – Mercy Investment Services, United Methodist Church Foundation, Portico Benefits, Episcopal Church Pension Fund.

A full list of companies receiving the board diversity proxy proposals and filers of the resolutions follows:

2015 Board Diversity Resolutions



Lead Filer



Agree Reality



AVX Corporation



Chipotle Mexican Grill



Citrix Systems



Cohen & Steers



Discovery Communications Inc.

Mercy Investments, Trillium, Calvert

Mercy Health, Portico Benefits, Connecticut




New York State, Pax World, United Methodist Foundation


Garmin Ltd.


New York State


Kosmos Energy Ltd



Las Vegas Sands Corp.

Mercy Investments, Connecticut



New York State


Monster Beverage Corp

New York State

Connecticut, Calvert, North Carolina and City of Philadelphia Pension Funds


Ramco-Gershenson Properties



SBA Communications Corporation



Silgan Holdings


Filing withdrawn due to technical reasons



New York State



Standard Pacific

New York State


Urban Outfitters

New York State

Connecticut and CalSTRS as co-filers

Not all investors have made their engagements public to date. We expect additional company names to be added to the list as the proxy season moves forward.

For further information, please contact:  
Charlotte Laurent-Ottomane
Executive Director, Thirty Percent Coalition
(561) 789 6022

Anne Sheehan
Co-chair of Thirty Percent Coalition Institutional Investor Committee
California State Teachers’ Retirement System
(916) 414-7410

Tim Smith
Co-chair of Thirty Percent Coalition Institutional Investor Committee
Walden Asset Management
(617) 726 7155

Sample Proxy Proposal 

WHEREAS: “Company” does not have any women on its Board of Directors.

We believe that diversity, inclusive of gender and race, is a critical attribute of a well-functioning board and a measure of sound corporate governance.

Research confirms a strong business case for diversity on corporate boards. For example, the August 2012 Credit-Suisse Research Report Gender Diversity and Corporate Performance links board diversity to better stock market and financial performance (higher return on equity, lower leverage, higher price/book ratios and improved growth prospects). The report suggests several explanations for this better performance including a stronger mix of leadership skills, improved understanding of consumer preferences (women control more than two-thirds of U.S. consumer spending), a larger candidate pool from which to pick top talent, and more attention to risk.

Numerous studies suggest a critical mass of at least three women directors strengthens corporate governance (research from Hebrew University, Wellesley Centers for Women, University of Western Ontario).

According to an October 2014 PwC survey of institutional investors representing more than $11 trillion in managed assets, “Nine out of 10 investors believe boards should be revisiting their director diversity policies, and 85% believe doing so will require addressing underlying impediments…”

Recognizing the benefits of diversity in corporate leadership and growing interest from institutional investors, investment firms are responding with new products and services. In 2014, U.K.-based Barclays launched an exchange-traded note based on an index of companies with female CEOs or directors (the latter with a threshold of 25 percent). In the U.S., Bank of America, Morgan Stanley, and Pax World Investments have also expanded their product offerings.

“Company” lags its peers with respect to the representation of women on its Board. Ninety-two percent of S&P 500 boards include at least one woman; the average is two women directors (2014 ISS Board Practices Study). Additionally, approximately 80 percent of Mid Cap companies and 63 percent of Small Cap companies have at least one woman director.

Resolved: Shareholders request that the Board of Directors report to shareholders by September 2015, at reasonable expense and omitting proprietary information, on plans to increase diverse representation on the Board as well as an assessment of the effectiveness of these efforts. The report should include a description of how the Nominating and Corporate Governance Committee, consistent with its fiduciary duties, takes every reasonable step to:

  1. include women and minority candidates in the pool from which Board nominees are chosen; and
  2. expand director searches to include nominees from both non-executive corporate positions and experience in non-traditional environments such as government, academia, and non-profit organizations.

Supporting Statement:

We propose that the requested report should also address the following: Changes to the Nominating and Governance Committee Charter to embed a commitment to diversity inclusive of gender, race and ethnicity in Board searches. The number of women and minorities in the candidate pool in the most recent 3 year period. A summary of challenges and plans to address them.

Take Action: Are you a shareholder with any of the companies listed above?  If so, please contact the Investor Relations office and ask them to support the Board Diversity Resolutions. Of course, I would hope that you would also vote your proxy in favor of any such resolutions.

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