Despite current perceptions of corporate boardroom diversity, numbers are increasing albeit slowly. One explanation is the use of activist pension funds to demand diverse representation at the highest level of publicly traded companies.
For those unaware, pension funds with large ownership shares will introduce shareholder proposals seeking to increase diversity on corporate boards. Depending on the company’s response, funds will either take the proposal to a vote or rescind the proposal if diversity complaints are met before hand.
Ronald Orol from The Street gives numerous examples of funds pushing proposals but the response from public corporations has been surprisingly responsive. Comcast Corp, Simon Property Group, FleetCor Technologies Inc., and Joy Global Inc have all seen their boardroom diversity grow as a result of these methods. Unfortunately, other corporations like Skechers USA Inc seem to be resistant to the change.
Still, these new methods are gaining traction. in 2013 and 2014, a combined 22 proposals were sent to corporations involving diversity increases. In 2015 alone, that number was over 30. In addition “nine companies allowed diversity proposals on their ballot to go to a vote in 2016, up from five in 2015 and three in 2014, according to ISS Corporate Solutions.” This is good news for diversity, and good news for America’s future.