Tag Archives | diversity

The Home Depot, Inc. $HD: Proxy Score 81

The Home Depot, Inc. (HD) is one of the stocks in my portfolio. Their annual meeting is coming up on 5/23/2013. ProxyDemocracy.org had collected the votes of three funds when I checked on 5/16/2013.  I voted with management 81% of the time.  View Proxy Statement. Warning: Be sure to vote each item on the proxy. Any items left blank are voted in favor of management’s recommendations. (See Broken Windows & Proxy Vote Rigging – Both Invite More Serious Crime) Continue Reading →

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CorpGov Tidbits

PLANSPONSOR.com reports, a provision in President Obama’s Fiscal Year 2014 budget that pertains to employee stock ownership plans (ESOPs) could result in a disincentive for offering the plans.

The provision would eliminate Internal Revenue Code section 404(k), an incentive for ESOP creation and operation that permits a C corporation to deduct the value of dividends paid on ESOP stock passed through to employees in cash, deductions used to pay the ESOP acquisition loan, or when the employee reinvests in more company stock in his/her ESOP account balance. Continue Reading →

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Event Coverage: Why the Corporation is Failing Us and How to Restore Trust

Introduction by Professor Ronald J. Gilson, the Meyers Professor of Law and Business, Stanford Law School; Commentary of Lecture by Professor David F. Larcker, the James Irvin Miller Professor of Accounting, Stanford Graduate School of Business.

The corporation is one of the most important and remarkable institutions in the world. It affects all our lives continuously. It feeds, entertains, houses and, employs us. It generates vast amounts of revenue for those who own it and it invests a substantial proportion of the wealth that we possess. But the corporation is also the cause of immense problems and suffering, a source of poverty and pollution, and its failures are increasing.  While governments are subject to repeated questioning and scrutiny, the corporation receives relatively little attention.

Professor Colin Mayer discuss his book, Firm Commitment: Why the corporation is failing us and how to restore trust in it, published by Oxford University Press in February 2013.  He sets out how the corporation is failing us, why it is happening now, what are the consequences, and how we can re-establish the corporation as an institution that we value and trust. Continue Reading →

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Does the Gender of Directors Matter?

Miriam Schwartz Ziv

Miriam Schwartz Ziv

Abstract: How does gender-balance affect the working of boards of directors? I examine boards that have been required for two decades to be relatively gender-balanced: boards of business companies in which the Israeli government holds a substantial equity interest. I construct a novel database based on the detailed minutes of 402 board- and board-committee meetings of eleven such companies. I find that boards that had critical masses of at least three directors of each gender in attendance, and particularly of three women, were approximately twice as likely both to request further information and to take an initiative, compared to boards that did not have such critical masses. A 2SLS model confirms these results. Continue Reading →

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Boys' Club Still in Charge of California Businesses

Photo of Amanda Kimball

Amanda Kimball

The 400 largest companies headquartered in California, representing almost $3 trillion in shareholder value, still resemble a “boys’ club” with women filling fewer than 10 percent of top executive jobs, a University of California, Davis, study has found. Incremental gains have been pitiful, in my opinion.

The Graduate School of Management’s eighth annual UC Davis Study of California Women Business Leaders — a yearly benchmark for the Golden State’s lack of progress in promoting women business leaders — paints a dismal picture for women in leadership during fiscal year 2011-2012. Some of the best known among these top companies, or the California 400, have no women leaders. Continue Reading →

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Call for Papers: Inside the Board Room

Since the Cadbury Report was published in 1992 in the UK, there has been increasing emphasis not just by UK regulators but also by regulators from other countries, including the USA and Continental Europe, of the role of boards of directors in corporate governance. However, 20 years down the line it is still uncertain whether boards of directors are able to fulfill the important role they have been assigned by regulators. For example, the academic literature on the impact of board composition, in particular the proportion of outside, non-executive directors, is as yet inconclusive as very few studies have Continue Reading →

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New CEOs: The Diversification of the Corner Office

Sociologists Richard Zweigenhaft and G. William Domhoff began studying ascendance to the top corporate office 20 years ago and, while the population of CEOs is far from diverse, they report that they have been surprised to see as many women and minorities as they have.  Today there are 80 white women, African Americans, Latinos, and Asian Americans at the head of Fortune 500companies. Continue Reading →

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Boards, Plumbing, Broadridge & footnoted*

The Changing Profile of Board Recruitment, in the November/December issue of The Corporate Board by Bonnie W Gwin of Heidrick & Struggles, discusses a continued risk aversion among the leadership of the Fortune 500.

Companies seeking to fill directors’ chairs with only current or former CEOs will find it nearly impossible to increase diversity on the board. This may create a conundrum for corporations who want to do both.

Companies are torn between the safety and reliability of veteran leadership but also Continue Reading →

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LGIM Pushes Board Diversity

Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor managing £362 billion in assets for more than 3,000 clients, is trying to persuade headhunters to widen the pool of company directors by bringing in people without direct board experience.

“It’s not just about gender,” says Sacha Sadan, LGIM’s director of corporate Continue Reading →

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India: Independence of Boards at Risk

Boards have become larger but controlling for other things, less independent (have fewer independent directors) after the crisis. Much of this seems to be the result of a “supply shock” in which independent directors have become more aware of the risks associated with board positions. In the three weeks of January 2009 after the Satyam fraud came to light, independent director exits soared to 109 from a monthly average of about 30 before the crisis. Over a longer horizon, independent director exits per year have risen by 20% in the post-Satyam period as compared to the three years before the crisis…

Executive director appointments have more than doubled in the post-Satyam period than before. Their proportion on boards has risen by 16%.  (The drop in the number of independent directors in boardrooms bodes ill for corporate governance, FT, 8/20/2011)

Indian Boards should consider expanding their horizons, seeking directors from a much more diverse pool of creative professionals from outside their normal circles, including experts in social media, women and international candidates.

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Support Women on Boards: 20% by 2020

Three college degrees for every two earned by a man. 85% of purchasing decisions. Nearly 50% of the workforce. And yet, the tiniest of chips in the glass ceilings of boardrooms across corporate America with women holding just 18% of corporate board posts at S&P 100 companies. What’s wrong with this math?

Aditi Mohapatra, Senior Sustainability Analyst with Calvert Investments, McKinsey’s Women Matter study, which found companies with the highest share of women on executive committees outperformed those with all-male executive committees by 41% in terms of return on equity and 56% in operating results.

She goes on to note that Calvert has filed diversity proposals at 55 companies; 46 agreed to change Continue Reading →

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CalSTRS Advance Board Diversity

CalSTRS withdrew all eight of its board diversity shareholder proposals filed during the 2011 proxy season after successfully engaging companies to consider diversity in director searches.

In recent years, the issues of board of director leadership and oversight roles have taken on increased significance to long-term investors, such as CalSTRS. Today’s economic challenges highlight the importance that board diversity plays in enhancing value and providing companies with a full range of fresh talent and experience. According to Anne Sheehan, CalSTRS Director of Corporate Governance:

We’ve advanced the ball in the name of board diversity and are committed in our conviction that corporate boards and their nominating committees consider diversity in the larger context of improving shareholder value. One lesson from the financial crisis was the role corporate board group-think played in fostering management short-term priorities that proved detrimental to sustainable value creation. We think improved board diversity will address that problem.

To assist boards in the enhancement of diversity on corporate boards and of shareholder value, CalSTRS and CalPERS launched the Diverse Director DataSource, known as “3D,” by announcing the selection of corporate governance vendor Governance Metrics International to develop and operate the DataSource. 3D is expected to go live later in July and begin accepting nominations from board candidates. The database will offer shareholders, companies and other organizations a valuable resource for identifying candidates.

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Possible Stick Yields Results for Female Directors

The number of women being hired as non-executive directors to FTSE 100 companies is running at nearly double the rate it was before the Davies report, which threatened the introduction of fixed quotas.

Over the past six months, 23 per cent of all new non-executive board appointments have been filled by women, compared with just under 10 per cent for all of 2010, and the number of companies with no women on the board has fallen from 21 to 17. (Boards double number of women members, The Independent, 5/29/2011)

It looks like the possibility of legal mandates does have an impact, at least in the UK, and that quick action by boards may avoid legislation.

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How I Voted: Home Depot

Home Depot (HD) is one of the stocks in my portfolio. Their annual meeting is coming up June 2. ProxyDemocracy.org had five funds voting.

Checking the Summary Compensation Table, it appears CEO/Chair Francis S. Blake was paid about $10.5 million. Using the United States Proxy Exchange (USPX) released draft guidelines, I am voting against most pay packages over the median for large-caps of $9 million, including this one. I also voted against all members of the compensation committee: Brenneman, Codina and Hill.

I voted in favor of the proposal by Evelyn Y. Davis for cumulative voting. This right could become increasingly important is shareowners are ever given proxy access. I voted in favor of William Steiner’s proposal to allow special meetings to be called by 15% of the shares. I’ve introduced similar proposals and see this as simple good governance.

Similarly, I favor the proposal by Trillium Asset Management for a diversity report. Home Depot should take a leadership position on this important issue. I also favor the proposal from NorthStar Asset Management Funded Pension Plan to allow a shareowner vote on specified political expenses. After Citizens United, I think such votes at every company are warranted.


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3D Advisory Panel Named

CalPERS and CalSTRS are working with an Advisory Panel of leading corporate governance experts to develop a new digital resource devoted to finding untapped diverse talent to serve on corporate boards.

The Diverse Director DataSource, known as “3D,” will offer shareowners, companies and other organizations a facility from which to recruit individuals whose experience, skills and knowledge qualify them to be a candidate for a director’s seat.

“The Diverse Director DataSource is an important tool for finding untapped, experienced Continue Reading →

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Video Friday: Diversity Rocks Stanford

Diversity On Corporate Boards: When Difference Makes A Difference: The Arthur and Toni Rembe Rock Center for Corporate Governance at Stanford.

Speaker: The Honorable Luis Aguilar, Commissioner, United States Securities and Exchange Commission

Speaker: Joseph A. Grundfest, W. A. Franke Professor of Law and Business, Stanford Law School; Senior Faculty, Rock Center for Corporate Governance, Stanford University

Speaker: Mary B. Cranston, Senior Partner, Pillsbury Winthrop Shaw Pittman LLP

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Let's Get Rid of Caveman Directors

Women serving on corporate boards are far more likely than their male counterparts to favor increased boardroom diversity, new regulations for executive compensation, proxy access for shareowners and enhanced risk management, according to a new survey of corporate directors  by Heidrick & Struggles, WomenCorporateDirector (WCD), and Dr. Boris Groysberg. (Survey: Men and Women Corporate Directors Disagree Sharply on Diversity and Governance, Business Ethics, 10/7/10)

It makes me wonder, Did they really survey male directors, or did they slip in a large number of cavemen just to make women look so much more intelligent? I’m not about to get a sex change, but once again my group is making me embarrassed. These guys probably also think Pluto is still a planet.

As if this news wasn’t bad enough for guy egos, another study examined stock performance of the 26 publicly traded companies headed by females on the Power Women 100 list and found that as a group they outperformed the overall market–companies dominated by male chief executives–by 28%, on average, and topped their respective industries by 15%. (Girls Rule, Forbes, 10/7/10)

What’s the best way to predict the future? Create it. Free USPX Training – Learn How to File Shareowner Proposals.

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