The New York State Common Retirement Fund, Albany, reached agreements with Monster Beverage Corp. and Standard Pacific Corp. on revisions of policies to expand diversity in choosing members of the corporate boards, Thomas DiNapoli, the state comptroller and sole trustee of the $181.7 billion pension fund, said Monday.
As a result, the pension fund has withdrawn shareholder proposals to both companies, Mr. DiNapoli said in a news release. The pension fund owns $72.9 million of Monster Beverage stock and $2.7 million in Standard Pacific shares, Matthew Sweeney, a spokesman for Mr. DiNapoli, said in an interview.
“Corporations with homogeneous boards are vulnerable to ‘groupthink,’ which can discourage innovation and put their reputations and financial performance at risk,” Mr. DiNapoli said in the release.
Monster Beverage agreed to amend its charter to specify that board nominations include “diversity of race, ethnicity, gender, sexual orientation and gender identity” as factors in “evaluating suitable candidates for board membership,” according to the amended charter, a copy of which was provided by the New York pension fund to Pensions & Investments.
“By recognizing the importance of a truly diverse pool of candidates for its board, Monster is one of a growing number of forward-looking companies that will be better positioned to achieve a sustainable business model and enhance the bottom line,” Connecticut Treasurer Denise Nappier said in the release issued by New York State Common.
Ms. Nappier is principal fiduciary of the $29.4 billion Connecticut Retirement Plans and Trust Funds, Hartford, which joined the New York pension fund, Calvert Investments and the $5 billion Philadelphia Public Employees Retirement System in seeking a change in Monster Beverage’s policy.
The New York pension fund news release said Standard Pacific Corp. has added language to its charter to broaden consideration of selecting board candidates. The charter now includes “diversity of background and experience, (which includes gender, race, ethnicity, sexual orientation, gender identity, culture and geography)” as criteria, the charter says.