The Coalition’s institutional investors engaged companies to request that diversity, inclusive of gender, race, and ethnicity be considered as a priority in board composition. 517 companies have appointed at least one woman to their boards since the “Adopt a Company” campaign launched in 2012.
BOCA RATON, Fla. (PRWEB) July 15, 2021
Representing more than $7 trillion in assets under management, the Thirty Percent Coalition (“Coalition”) contacted more than 250 companies as part of its 2020/21 “Adopt a Company” campaign. The Coalition’s institutional investors engaged companies to request that diversity, inclusive of gender, race, and ethnicity be considered as a priority in board composition. Investors asked companies to commit to include both women and people of color in applicant pools (known as the Rooney Rule) and to reflect this commitment in the company’s governance documents. The Coalition’s 2020/21 “Adopt a Company” campaign achieved strong results: 127 companies appointed women to their boards, of which:
- 65 companies with all-male boards appointed a woman, most for the first time
- 62 companies appointed a second woman
- In 2021, 28 shareholder proposals on board diversity were filed, with 22 withdrawn based on positive agreements Source: Sustainable Investments Institute (Si2)
- Investor groups in California, Midwest, and Northeast successfully engaged more than 100 regional companies; these achievements are included in overall 2021 Coalition results
- Overall, 517 companies have appointed at least one woman to their boards since the “Adopt a Company” campaign launched in 2012. Results are derived from the Coalition’s database and data provided by FactSet.
2021 was a historic year for shareholder action as reported in the media:
- “Shareholders approved a record number of resolutions in 2021 on issues related to climate and social topics such as diversity — signaling they increasingly view inaction on these fronts as a major financial risk.” Source: CNN
- “To date, there have been 34 majority votes for ESG proposals, shattering last year’s record of 21. More are likely by year’s end.” Source: Sustainable Investments Institute (Si2)
“We continue to be encouraged by the effectiveness of our collaborative efforts through the Thirty Percent Coalition. Key to board refreshment is the commitment by Nominating and Governance Committees to adopt and apply the Rooney Rule  as well as have this commitment reflected in the company’s governance documents. For the most part, investors’ requests during this proxy season have received very positive responses,” stated Mary Hartman Morris, co-chair of the Coalition’s Institutional Investor Committee and Investment Officer at CalSTRS.
“2021 has been an extraordinary year with a notable increase of shareholder support, highlighted by significant growth in engagements and resolutions on environmental, social, and governance (ESG) issues. A growing number of investors voted “No” on Nominating Committee members or against entire boards that were inadequately diverse. These votes signal to management and boards of directors the value investors place on board diversity as a strong indicator of sound governance and an essential element to long-term success,” said Tim Smith, co-chair of the Coalition’s Institutional Investor Committee and Senior ESG Advisor at Boston Trust Walden.
While company efforts towards more diverse boards and workforces have grown over the past year, investors still need expanded disclosure as they make their investment decisions. Disclosure of board composition, inclusive of gender, race, and ethnicity is considered essential. EEO-1 statistics and other human capital data points also are becoming a focus as they reflect if and how effectively diversity is managed, from the workforce to the boardroom.
Call to Action:
- Undertake regular board assessments to determine competencies needed to move the company forward on diversity, and to determine how the board composition ties to a company’s long-term strategy and performance;
- Implement and improve skill-set matrix disclosure in the company’s Proxy (DEF14A) on board gender, race, and ethnicity;
- Commitment to include women and people of color in the board candidate pool (Rooney Rule) with documentation on this commitment within the company’s governance documents;
- Disclosure of future plans to make progress on board diversity.
About the Thirty Percent Coalition
Founded in 2011, the Thirty Percent Coalition—also known as the “Coalition for U.S. board diversity®”—is a pioneer in promoting diversity in the corporate boardroom. Its mission is to advocate for diversity on corporate boards, promoting women and people of color. The Coalition provides a national forum where its members develop strategies to influence companies to increase diversity in senior leadership and boardrooms. Membership includes public companies, private equity, institutional investors, state treasurers, professional services firms, and advocacy groups working together for the first time. In 2021, Coalition members represent over $7 trillion in assets under management. There is no other organization of this kind in the U.S.
 Commitment to include both women and people of color in the candidate pool.