A coalition of 14 state and city financial officials who are trustees of public retirement funds representing more than $1 trillion in assets, is calling on corporations to embrace more racial and gender diversity, including lesbian, gay, bisexual and transgender diversity, on their boards of directors, said a joint statement from the group released Wednesday by CtW Investment Group, which is helping in the effort.
Coalition members include John Chiang, California state treasurer and trustee of the $292.6 billion California Public Employees’ Retirement System and $186.8 billion California State Teachers’ Retirement System; Thomas P. DiNapoli, New York state comptroller and sole trustee of the $178.3 billion New York State Common Retirement Fund; and Scott M. Stringer, New York City comptroller, who oversees the five New York City pension funds with combined assets of $154 billion.
“As fiduciaries to pension funds … we want the boards of directors at our funds’ portfolio companies to be comprised of the best and brightest individuals who collectively possess the skills and perspectives necessary to oversee the companies on their shareholders’ behalf,” the statement said, noting “research demonstrates that board diversity improves financial performance, leverages talent, enhances firm reputation, and increases innovation and group performance.”
But trends show “progress remains unacceptably slow,” the statement added, noting, “White directors hold 85% of the board seats at the largest 200 S&P 500 companies. … Men occupy 80% of all S&P 500 board seats. … Straight directors predominate in corporate boardrooms.”
Matthew Sweeney, spokesman for Mr. DiNapoli’s office, said in an e-mail, “We put out the joint statement to draw attention to the issue and hopefully bring more investors on board with board diversity as a corporate governance priority. In the coming months, the coalition will be communicating with other fiduciaries about the need for greater board diversity. As you know, a lot of the funds already cooperatively engage with their portfolio companies and jointly submit shareholder proposals on the issue. New York Common and others expect to continue to engage companies on board diversity.”
Service Employees International Union is organizing the initiative, said David Barrett, communications director for Denise L. Nappier, Connecticut state treasurer, a member of the coalition and sole trustee of the $29 billion Connecticut Retirement Plans & Trust Funds, Hartford.
Brady Gordon, SEIU spokesman, couldn’t be reached for comment.
CtW Investment Group is helping with the coalition’s outreach to draw attention to the statement as well as broaden the coalition’s membership among other public funds, said Matthew Painter, CtW spokesman.