Global asset manager abrdn will require that U.S. public companies it owns to increase the racial and gender diversity of their boards.
In an updated proxy guideline issued on Monday, abrdn said that boards of companies that it owns in the S&P 1500 and Russell 3000 indexes will be required to have "at least one racially or ethnically diverse member," otherwise the asset manager will "vote against or withhold from the re-election of the nomination committee chair."
Fionna Ross, a Philadelphia-based senior ESG analyst at abrdn, said that "racially or ethnically diverse" means "individuals from typically underrepresented racial or ethnic groups."
The commitment builds on abrdn's history of supporting diverse companies and boards, the firm noted in the updated guideline, as it will continue to require boards of large-cap companies it owns to have at least 25% female representation, with an expectation to raise that threshold to 30% by 2030.
"This is not a divestment approach," Ms. Ross said. "Our approach has long been to remain active shareholders so that we can use our voice and influence as shareholders to push for positive change, through engagement and/or voting."
Divestment would only occur, Ms. Ross noted, "if we felt that after repeated efforts, our engagement and/or voting activities were unsuccessful and we had serious concerns about the company's ability to manage its most material risks."
Based in Edinburgh, abrdn had about £542 billion ($731 billion) in assets under management as of Dec. 31.