The New York State Common Retirement Fund, Albany, will expand its insistence on corporate board diversity for all companies in the S&P 500 in which it invests, Thomas DiNapoli, the state comptroller and sole trustee of the $247.7 billion fund, said Thursday.
"Companies succeed when their workforces reflect the diversity of America and when they develop a corporate culture that embraces equity and inclusion," Mr. DiNapoli said in a news release. "Many companies are taking meaningful steps towards achieving diversity, equity and inclusion, but it's clear more is needed."
Last year, the pension fund withheld support from 227 incumbent directors at 55 companies that did not include "underrepresented racial minorities," the news release said. This year, it will increase the scope of its shareholder proposals "seeking increased board diversity and disclosure of workforce diversity," the news release said.
Also, it will "expand its votes against board members at companies whose boards do not include underrepresented racial minorities, companies that fail to disclose their workforces' racial or ethnic diversity, and companies that refuse to embed diversity in their search for new board directors," the news release said.
Last year, the pension fund issued a revised proxy voting guide "to formalize the fund's opposition to boards that are not sufficiently diverse, including diverse attributes based on age, race, gender, ethnicity, sexual orientation and gender identity, geography and disability," the news release said.
Among the terms of the guidelines, the pension fund said it will vote against:
- All incumbent directors at companies with no directors identifying as "an underrepresented minority" on their boards as defined by federal Equal Employment Opportunity Commission.
- All incumbent nominating committee directors at companies with just one director identifying as an underrepresented minority.
- Board chairs and incumbent audit committee members at S&P 500 companies that do not disclose the individual racial/ethnic diversity of their board directors.
- All incumbent nominating committee members at companies that have not made both gender and racial/ethnic diversity explicit considerations in their searches for directors.
Last year, the pension fund withheld support for 879 incumbent directors at 193 public companies with no women on their boards, the news release said. It also withheld support for 1,574 incumbent nominating committee members at 673 public companies with only one woman on their boards.