Amazon sets policy to have diverse candidates for all director openings

Amazon.com Inc. adopted a policy to include diverse candidates, including women and minorities, for all director openings, the company announced in a filing with the Securities and Exchange Commission.

Amazon added in the Monday filing that the policy will "formalize a practice already in place."

The company's announcement comes nearly a month after it opposed a shareholder proposal calling for the company to adopt a policy that includes women and minorities in director searches and a few days after members of the Congressional Hispanic Caucus and members of the Congressional Black Caucus sent letters to Amazon about the company's resistance to the shareholder proposal.

In its proxy statement released last month, Amazon said it already "seeks out candidates with a diversity of experience and perspectives, including diversity with respect to race, gender, geography and areas of expertise," and that its "processes for nominating directors involve complex considerations that are designed to advance the long-term interests of shareholders."

Amazon added that given its "commitment to equality and the nature of our business ... the policy requested by the proposal would not be an effective and prudent use of the company's time and resources."

The shareholder proposal, filed by CtW Investment Group and the $2 billion Service Employees International Union Pension Plans Master Trust, Washington, noted that there are no minority directors on Amazon's board and three of the 10 directors are women. CtW advises union-sponsored pension funds on corporate governance issues. The plans with which CtW works have a total of more than $250 billion in assets.

In a letter Monday responding to members of the Congressional Hispanic Caucus and members of the Congressional Black Caucus, Brian Huseman, vice president for public policy at Amazon, said the company reached its decision to adopt the director search policy after listening to legislators' "feedback as well as that from Amazon employees, shareholders, and other stakeholders about the board diversity proposal."

In an April report, proxy-voting advisory firm Institutional Shareholder Services recommended that shareholders support the proposal.

ISS noted in the report that while Amazon aligned with its peers on director gender diversity, it appeared to be lagging its peers on ethnic diversity.

In a written statement, SEIU's Secretary-Treasurer Gerry Hudson, called on Amazon to "publicly address this policy change and their plans for improving the racial and gender diversity of its leadership." Along with increased diversity on its corporate board, the SEIU Pension Plans Master Trust and CtW have called for increased diversity among Amazon's executive ranks.