How do investors use their proxy votes to promote greater board diversity?
Boston Common Asset Management conducted a survey in the Spring of 2019 examining proxy voting and engagement policies as they relate to diversity among institutional investors. The survey was designed to reveal the extent to which institutional investors considered gender, racial and ethnic diversity when voting their proxies. Here‘s what we found.
At a Glance:
- Of 47 respondents, with 42 identifying as investors, almost half (43%) would vote against boards which lacked at least 30% diversity, consistent with the Thirty Percent Coalition’s goal.
- The majority (60%) consider gender, race and ethnicity (among other aspects) in evaluating the diversity on the board.
- Gender Diversity is the most common single issue included among demographic considerations; 23% relied only on a gender screen.
- When investors find diversity insufficient, the most common response is to vote against the nominating and governance committee (43%).
- More than 80% would vote in favor of shareholder proposals requesting greater board diversity on corporate boards.
- Only 2% looked specifically at race and/or ethnicity only, voting strictly against racially homogenous boards.