Corporations should assess board gender diversity and evaluate and disclose climate change risk, results of Institutional Shareholder Services' 2019 Global Benchmark Policy Survey showed.
In the survey, conducted in July and August, 61% of investors and 55% of non-investors polled agreed that board gender diversity is an essential ingredient of effective board governance regardless of the company or market represented. The survey said among those who did not agree, 27% of investors thought a market-by-market approach would be suitable compared to 11% of non-investors, while 24% of surveyed non-investors favored an analysis on the company level compared to 8% of investors. Three percent of investors and non-investors alike said board gender diversity should not be considered at all, and 7% and 2%, respectively, of non-investors and investors, said "other."
Of investor respondents, 60% said all companies should assess and disclose climate-related risks, while only 21% of non-investors agreed with the statement. A majority of non-investors, 68%, said a variety of factors should be taken into account including the individual company's business model, where and how the company operates and its industry sectors. Among investors, 35% agreed with that statement.
There was less consensus on the question of limits on the number of boards on which a single director can serve given how more institutional investors are tightening their limits, citing an increase in the time commitment required to be a board member.
Among investors, 42% of those who responded to the question said four total board seats is an appropriate limit, while 22% said five seats is an effective limit, 18% said a general limit should not be applied, 15% said, "It depends/other," and 3% said six seats is an appropriate limit. Among non-investors, the highest response, 39%, said a general limit should not be applied.
ISS surveyed 268 non-investors from public corporations and 128 investors from asset owners and money managers from July 22 to Aug. 13.
The report on survey results are available on ISS' website.
