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Governance

NYC comptroller engages with more than half of companies in board diversity campaign

New York City Comptroller Scott M. Stringer and the New York City Retirement Systems have so far engaged with more than half of the 151 U.S. companies targeted in the comptroller's boardroom quality and diversity campaign, which was launched in September, Mr. Stringer's office announced Wednesday.

Mr. Stringer is the fiduciary for the five public pension funds within the $194 billion New York City Retirement Systems.

Last fall, Mr. Stringer and the New York City pension funds wrote to the 151 corporations requesting they disclose the race, gender and skills of their directors and provide information about their policies for insuring board diversity and independence.

Since that time, more than 85 companies have "adopted improved processes and increased transparency regarding board quality, diversity and refreshment, and (more) than 35 companies are now disclosing not only the qualifications of their board members, but also details on boardroom gender and racial/ethnic diversity — information which up-to-now was rarely made public," Mr. Stringer's office said in a news release. Those companies include Duke Energy Corp., Honeywell International Inc., Occidental Petroleum Corp. and PepsiCo Inc.

Other achievements include:

  • 49 of the targeted companies elected 59 new female or minority directors. Those companies include eBay Inc., NRG Energy Inc. and Wells Fargo & Co.
  • 24 companies committed to include women and minority director candidates in every board search moving forward. Examples include Intel Corp. and Union Pacific Corp.
  • More than 25 companies provided meaningful information about their board evaluation processes to ensure they have the highest quality directors and their boards are refreshed regularly. Those companies include Exelon Corp., Occidental Petroleum Corp., and International Business Machines Corp.
  • Five of six shareholder proposals Mr. Stringer filed seeking information on companies' board composition were withdrawn after the companies agreed to provide meaningful disclosure. ExxonMobil was the only company that refused to provide this information. The proposal was rejected by 83.5% of shareholders at Exxon's annual meeting May 30. In its proxy statement, Exxon recommended shareholders vote against the proposal, arguing that its current disclosures on board composition meaningfully addressed the comptroller's proposal and that diversity in terms of skills, gender and ethnicity have been important considerations in director searches and assessments. An Exxon spokesman declined to comment beyond the proxy statement.
"This is not just about changing the who's who on corporate boards; this is about setting the best foundation for future generations and enshrining the highest standards for our investments," Mr. Stringer said in the news release. "Diverse, climate-competent and independent boards are best positioned to protect our retirees' pensions for the long term and that's why we'll keep the pressure on for real change in corporate boardrooms."

Mr. Stringer added that his office "will continue to demand these changes, because they create sustainable long-term value for our pension funds and for all investors."

The comptroller's boardroom diversity campaign is an expansion of his boardroom accountability project, which was launched in 2014 and designed to improve proxy access by allowing large, long-term investors to nominate candidates for company board positions.