State treasurers and institutional investors from the Northeast have formed a coalition to increase the diversity of corporate boards for companies based in the region.
The Northeast Investors' Diversity Initiative is made up of the state treasurers of Connecticut, Massachusetts, Maine and Vermont; the New York City Comptroller and New York-based Miller/Howard Investments; Massachusetts-based Boston Trust Walden, Trillium Asset Management, and Zevin Asset Management; and New Hampshire-based Pax World Funds.
The coalition, which has more than $283 billion in combined assets, seeks to leverage their corporate relationships and shareholder rights to encourage diversity and inclusion among the boards of the companies with which they do business.
"An increasing body of research shows that companies with stronger diversity at the senior level tend to outperform those companies that lack diverse leadership teams," Rhode Island General Treasurer Seth Magaziner said in a news release issued by his office. "As long-term investors we believe that board diversity, inclusive of skills, gender and ethnicity is an important consideration as we work to protect shareholder value and maximize returns for our members."
Mr. Magaziner oversees the Rhode Island State Investment Commission, including the $8.1 billion Rhode Island Employees' Retirement System, Providence.
In a separate release announcing the coalition issued by Connecticut state Treasurer Shawn Wooden's office, Mr. Wooden added: "As investors, we want companies — especially those in our backyard — to understand the critical role that diversity and inclusion play in good governance, and how good governance maximizes returns. Through the Northeast Investors' Diversity Initiative, we'll be able to focus engagement on companies in our region and support them with important tools to create more inclusive, effective boards that protect shareholder value."
Mr. Wooden is principal fiduciary of the $36 billion Connecticut Retirement Plans & Trust Funds, Hartford.
The NIDI recommends that companies adopt the National Football League's "Rooney Rule," a policy requiring minority and female candidates to be included in the initial pool of candidates considered for an open corporate board seat.